Ep. 20: Nik Hall, Founder & CEO of Vita Five & REViVE Marketing Partners
In Episode 20, James and Sean unpack the world of supplements with Nik Hall, Founder & CEO of Vita Five & REViVE Marketing Partners, covering:
-Which supplements are here to stay and what's cyclical
-Product category selection and outflanking big incumbents
-Appealing to the 5 senses of prospective consumers
-The economics of customer acquisition on Amazon
-How to navigate (and survive) the process of being acquired
Having been on both the brand and agency side, Nik brings a POV you won't want to miss.
Welcome to Brandbusters with your hosts, James Schwyn and Sean Lee. Together, we bust open the latest in CPG, retail media, and life, or whatever the we want. And for today's episode, we got something special cooked up for you. Extra spicy. Take it away, Sean.
Awesome. Welcome back, everybody, to episode 20 of the Brandbusters, and we have a great guest for you guys today. We've got Nik Hall, who's the CEO and founder of Revive Marketing Partners, and he's the former cofounder and CEO of the vitamin brand, Vitafive, which was acquired. So we're gonna talk a lot about that. Nik built Vita the Vita 5 brand from a d to c and Amazon brand into 20,000 retail doors.
I've known Nik for a while. We even looked at potentially acquiring Vita 5 a few years ago. And Nik's very pragmatic, down to earth CPG founder, and we're excited to chat with him and and learn from everything he learned, kind of growing a brand on Amazon and then ultimately getting it acquired. So super excited to have you here today, Nik. Thanks for joining.
Yeah. And thanks for having us. So I think one of the questions that we like to ask everybody is just from your background, it looks like you jumped into building a consumer goods brand that ended up being by the 5 pretty soon out of undergrad. What made you wanna get into the consumer goods space and and become a founder, and why did you choose the vitamin space? Gosh.
More than anything, man, I just didn't wanna work for someone. I end up working for a big four. I I I was far enough ahead in school. I was an average student, and so I was the only one willing to take a semester off, so I ended up getting to work for 1 of the big four. I don't think I would have been able to otherwise.
And I was like, damn. I would do anything to not do this again. So I was like, I'm a start any business. Before that, I had started a window cleaning business, which was great. People like to talk crap on home services or whatever, and I'm like, they're great businesses.
They bring in good cash. It's awesome. Then I started something very similar, like a favor, Instacart, whatever. Yep. And it was as basic as it got.
I made a $154 in revenue, maybe 2 or $3 in gross margin. It was the worst business ever that stopped really, really quick. And then, a buddy of mine and I, our parents always send us care packages, and every so often, he'd get vitamins. I get vitamins. You put them back in the, like, classic, you know, into this.
And you take them for 2, 2 and a half weeks, then you stop. Right? Just the classic. Yeah. Not seeing anything.
Don't really care. It doesn't whatever. And we're like, there's gotta be an easier, better way. My business partner, Garrett, actually had met an older guy who was a doctor and sold, like, these little pill packs. And these pill packs had, like, all your daily vitamins with your name on the back and all this stuff.
We're like, that's so cool. So he went to him and actually was looking for an internship and was like, hey. Would you look at doing this, this, this? Just kinda throwing out ideas. And the guy's like, nope.
I'm making good money. I'm good. And so he brought it back to me, and he's like, yo. We should try to change it. And so, anyways, we started with gummy vitamins and some of that stuff.
The business evolved over years. But, yeah, started our junior year and then really started the sales. It takes about a year to get funding and, you know, all of our ducks in the line and all of that. So That's awesome. What was the what was the funding being being kind of that young getting into it, what was the funding process like trying to raise or something like that?
Yeah. We raised we raised 6 figures. We raised, like, I think, 6 or $800,000 over the total time of the business, which in the CPG world is not a ton, from really just family friends. So we didn't have the typical you know, we got told by one guy that was, like, a family friend. He's like, that's the easiest money you'll ever raise.
So from the raising money, we, we were we were fortunate there. But it was still it was it was a big process, and it's a big like, the early days is the biggest risk. You have no sales. You don't have an inventory, you know, any of that. So That's great.
Going off of that, I I would say, Sean and I are both fairly active, have been long time consumers of a variety of supplements. I it seems that a lot of that category is is cyclical. Like, gummies are very in right now. There's certain I mean, creatine seems to have a lot of staying power, but then you see others where they kinda come and go. Yeah.
What trend or kind of primary nutrient solve are you guys trying to introduce, with Vita 5? And then kind of where are some of the ones, like, looking at the market now, what do you think is here to stay? What do you think will will be gone or irrelevant in a a couple of years? Yeah. I think I think anything and and I'll just share this from straight data in the company.
Right? So when we started, we had these custom packs that you could pick your multi mega DC. I think that stuff will come back at some point. Because at the end of the day, like, that's the classics that everyone has always used. But people get so fixated on, like, let's be real, sex sells, which means weight loss sells, making people more money.
Right? Like, go through the things that, like, are something that makes someone more attractive or whatever. Yep. And so weight loss is always going to be, whether it's apple cider vinegar or GLP 1 or Ozempic or and, gosh, I mean, if some of that stuff actually works without any repercussions, like, that's just gonna be insane. Right?
So I think there's always going to be those, but those are going to be trendy. Right? Like, apple cider vinegar is not what it was because people realized I can't have 2 double doubles, eat 2 gummies, and somehow lose weight. It's like, no. And eat a gummy that probably has, like, 5 grams of sugar in it.
Right. 3 of them in trying to lose weight. Well, the the correlation causation. Right? Like, hey.
This will correlate to a healthy life style, but this will not, you know, guarantee. Yeah. Yep. So I think I think the classics there, I think your stuff like we always found really, really good success in, like, because it's immediate acting, and people want the immediate gratification. The slower, like, a vitamin d, like, good luck.
Go get your blood work. See if it worked. Yeah. You know, you you're not gonna feel anything different on a daily basis. I think where people should be really, really cautious is going and hitting, like, super like, so we hit Ashwagandha really early.
This is, like, right as goalie's getting into it. And really hot boom dropped off. Yeah. And so I think people have to be really, really careful on, like, super trendy. Creatine gummies, I think, is here to stay.
I actually so, obviously, I've got Revive Marketing Partners, and then I've got, you know, VitaFi. I launched a creatine gummy and made it it was the it was the number one selling creatine gummy. They went out of stock for 4 months. Their cost per click went from a dollar 50 to $6. Wow.
I mean, that is that's it's not worth the business anymore, truthfully. Yeah. And so be really cautious. I honestly tell people to stay a little bit away from, like, the super trendy and go, like, tier 2 or tier 3, and that's where you'll make your most money. You're not gonna make $4,000,000 a month, but, like, you can build a really good business off of a number of products that are a $100 a month.
I think I think that's a really good point because looking at, you're getting a war of attrition there with Nestle Health Sciences, the Garden of Lives, the Vegas, the peep orgains of the world that can just, you know, drive up CPCs. It's more of like a those channels like Amazon are more of a defense mechanism versus customer acquisition channel. So it'd be really good points there. I'm focusing on kinda staying on the the less sexy of the tier 2, tier 3 to kind of make a dent. And Yeah.
And I think I think from from my time at P&G, right, like, big companies chase trends. So if they see that goal is having success with Ashwagandha, like, whatever vitamin brand the big company owns is going to launch an Ashwagandha gummy and they're going to spend a ton of marketing behind it and then it'll fall off and they'll move on to the next thing. So I agree. Chasing trends just never, never works. And it kind of goes back to the conversation we were having before the podcast began.
It's like, what are some of the boring niches or the boring, more boring businesses that you can get into that, you know, will always be reliable but aren't going to have huge highs and lows like some of these trends. So when you when you launched 5 to 5, I think the original kind of idea, if I recall from our conversations when we were looking at acquiring VITA5, it seems like it was basically like minimal ingredients. I think the original idea was like 5 ingredients and then low sugar gummies. That which seemed like the right trend at the the right time, which probably why you guys were able to to grow on Amazon and start to get some retail distribution. But what was the the logic behind your initial, formulation or where you ultimately ended?
Yeah. Like, so first and and this is just truthful. Right? We bought stock product from our supplier. And and back in 2016 versus 2024, massive, massive difference and just everything.
I mean, we were requiring people d to c. Amazon was as easy as it gets. You change your title and you end up ranking higher. Retail, it was like there's only so many supplier. Now you go just Google search and you go find 40 suppliers that do gummies.
Yeah. 80% of them are total garbage. You know, Sean Yep. You and I both know some that are very, very good suppliers, but, like, takes a long time on the lead time. We we definitely transitioned our product throughout the years, though.
You know, from, like, the stock product I mean, we were one of the only products on Target shelves that was a straight stock product. That's awesome. But what we learned over time was if you have a stock product and someone else has a stock product, people are smart enough to understand that, like, there is no difference, so I'll pay for the cheaper one. There was at one time 4 of the exact same products in Target shelves and the Elderberry products. Exact same.
All different price points. Yeah. All from the same customer manufacturer. Totally. And so, like, what we kinda learned over time is, like, just kind of figure out what do people actually want.
And, I mean, I think I think Jeff Bezos said it really, really well, really simple, but he's like, we're always trying to go after things that people want. People are always gonna want faster shipping and cheaper prices. And I'm like, boom. I mean, it's not hard. It's like, that's Walmart's way, and that's, you know, whatever.
And it's like I think that's why we see struggles with some of these other retailers like the Foxtrot of the world. And we'll see how Erewhon continues to do, but I I think bragging about expensive prices only last so long. Yeah. So I I wanna dive into that a little bit more. I think, whether you're talking about in a raise or, funny and brand, you everyone talks about total addressable market.
I think if you go layer deeper, you have your serviceable addressable market, and then you have your ideal customer profile. So I think in the role of supplements, we're talking about, like, price, but this is where maybe brand comes into play and also maybe product efficacy, especially for, like, your core users or that, like, ICP. I think, maybe consumers are more willing to pay that premium. So how do you what is the role that you think brand plays or even, like, thinking about the efficacy, element and positioning that with customer acquisition? So the I asked the question a little bit different.
So Well, I I I think did you see it probably depends on the type of consumer, but did you see price being the number one motive motivating factor? Was it the brand? Was it the kind of claim or efficacy of the product itself? I see. I see.
So we I I believe value is the most important thing. And so, like, where price was not the number 1 again, 2016 to, you know, whatever. We've had a fairly strong economy since. Yeah. And, you know, you're seeing like, right now is a little bit of a funky time, but it's also election season.
Right? Like, everyone gets a little bit funky during this time. But, like, well, we price was a factor for sure. Quality was absolutely. We always said, like, you gotta hit the 5 senses.
So first, sight. How how does the packaging look from an outside? How does it look as, like, a product itself? Does it look super sticky? Does it look nasty?
Does it have a ugly color? Then, you know, smell whenever you open it up. Does it smell like like does the fish oil smell like fish? Because that's awful. And, And, like, you just go through all the senses.
Right? Like, obviously, taste is, like, one of the number one things. And so what we learned before getting into retail was lifetime value. And so for us, we were like, we have got to figure out, like, the we're okay with losing a little bit of margin if we can gain customers at a cheaper cost per acquisition with a longer lifetime value. And so, I mean, I I genuinely believe that, like, everything has to like, you've got to be at a bare minimum a little bit better than the competition.
And I would just say, like, why not try to hit it a little bit better with everything? From your taste, from how it looks, from how it feels to you know, if you can beat on price, price is a factor I just don't like. I don't like price being my value. Yeah. Yeah.
I think that makes some sense. And it seems like from you guys your standpoint too, like, hitting on some of the the mega trends to, like, limited ingredients and low sugar are also, you know Yeah. People people people are willing to pay more for that. If you pick up a gummy that has, like, 20 unknown ingredients in it or, like, really, really cheap, like, inputs for the vitamins, like, people are willing to pay for something that's a little bit maybe a little bit more limited, less fillers and higher quality actually sourced sourced vitamins. I know, at least as a cons myself as a consumer, I do that.
I'm not the typical. I probably am more the PillPack guy where I take, like, you know, 6 or 7 different things in the morning, but I, like, source each one very methodically based on, you know, the type of ingredient where it's coming from and and how it works together in in combination. And I think I think where, like, some go wrong and this is for me now, like, seeing a number of brands from behind the scenes. Right? Like, you get from a 3PL perspective and an Amazon.
Like, both like, we all have gotten to see so many different brands at this point and kind of uncover a little bit. I think everyone's trying to be, like, hitting the trend that's hitting. And it's like Lay's potato chips still sells a shit ton of product. Yeah. And, yeah, they've got margin at this point, but I'm like I mean, just typical business.
Right? Like, we were talking about it before this before this even. And it's like, you know, it doesn't have to be overly sexy. Like, people love the taste of Lay's. And whenever someone looks at wild chips, some people are like, oh, well, it doesn't taste as good as Lay's.
And it's like, well, what the hell were you expecting? It's a protein chip. It's still really good for what it is. I think one thing I'm gonna just say something super controversial just to irritate people. But, I think following the trends of, like, seed oil is the opposite thing to do.
It's a short lasted like, I mean, we all saw this trend. Right? If you go to expo west, we saw this 2, 3 years ago. And I remember calling out to all my friends that were like in this, like, super, like, oh, I'm so healthy, whatever. And I'm like, no.
Like, they're all doing the avocado oil because that was a big trend. And this oil. And now that's like the devil. And it's like, oh, you do that? Good luck.
Just freaking go buy your casket now because you're dead soon. And I'm like, okay. Shit. Come on. Like, just be reasonable with it.
It'll be gone in a couple of years, and we'll have another thing. That's the devil. Yep. And so I mean, it's it's been like it's it's been like that way forever. Right?
It's like it seems like it's usually a marketing ploy that plays on some sort of consumer psychology. But I mean, you know, they just happen the cycles just happen much faster because of, you know, Twitter, the Internet, TikTok, everything else. They can kind of explode, but, like, it's the exact same thing. Right? Like, for how long was, you know, red meat and butter and beef tallow and all this stuff demonized in favor of, like, margarine?
When when you look back at it, you're like, wait a minute. Like, why is this thing that has, like, 50 fake ingredients, like, more healthy than, you know, butter that comes from a cow? But, like, for years, like, that was the the common belief. Now people are coming around to the different ways of thinking. But now it seems like every couple of years because things spread like wildfire on on Twitter and TikTok, You know, it's whatever the next the next trend is, and then that thing gets demonized in favor of the next thing that goes that goes viral.
It's so true. I think Will Knits from IQ Bar, James, when we had him on, had a really good point about this called trend hopping, where he was like, I don't wanna tie myself to any one trend, but I wanna build a chassis for my product that could pop multiple trends. So for him, he was able to ride keto. He uses a lot of, like, vegetarian protein. So he's like, when keto kind of fades, I can I can be, like, more, you know, plant based protein and, like, low sugar, like, things like that?
He's like, so I've got, like, 6 or 7 different ways in. I don't really care what the trend of the moment is, but I can dial up or dial down one based on wherever those trend cycles are are going because I've got a good chassis that kinda plays on where everything's heading. He's a smart guy. Like, I've talked to so many CPG people, and there's a lot of them that are like, they're pretty good, whatever. But I'm like, Will is Will is, like, a top dog.
Smart. Yeah. He I'm like, dude, you think through things just different. I'm like, that's smart. He loves to learn.
He'll just call me up randomly and just ask me questions about, like, warehousing or, like, stuff that, like and I'm like, why are you even thinking about this? But it's it's how he learns, and he he just expands. A smart guy. It's impressive what he's built. Yeah.
Yeah. So I I wanna revisit, we we talked about Lay's. And as, we're based in Cincinnati here, Kroger's kind of our big grocer, of choice in town. And, to your point on jumping on trends, I'm noticing, a messy chip, like Lionel Messi, and then also Mike's Hot Honey, and chips. So which I I love Mike's Hot Honey.
Shout out to them. I put it on my eggs, pizza, everything. Nice. But how do you think about this notion of nuisance revenue? So you probably had your core products with Vita 5, but you also wanted to maybe test other products to see, like, hey.
Can we drive some revenue and growth there? Like, what examples do you have with your, from your time at Vita 5? Yeah. Like, I okay. The first 6 months of Vita 5 was awful.
I could not figure out how to acquire customers at all. After that, we started to figure it out, figured out conversion on our website and, you know, all this other stuff. When when I figured out Amazon, we scaled Amazon. Gosh. We had 450% growth in 3 months after working for 2 years with all these different agencies that were garbage.
And so I started getting a bigger head, and I'm like, oh, like, because there was a time and place, and I was a little bit passive with some of it, but that you could literally change your keyword and your title, and you become top 10. Right? Like, it was so easy. It literally was just marketing hacking. It was not about good products.
Now I actually believe it's more about good products than it is marketing, but you gotta have both together. And I would argue it's about good prod products and then just pay pay per click. Like, Amazon has monetized more, and they're they've deprioritized the For sure. Organic hacks that you used to be able to do. Yeah.
Well, so, like, during that time, I went out there and I just found all these trends. Or not not sorry. I shouldn't say trends. They were more like what I believe to be the next product would be. And so we launched a new thing, not even with it wasn't even called Vita 5.
It was called, like, PACE with 2 p's. I don't know. We're I think we're going a little bit crazy. And we're seeing all this growth of these current products. Like, I launched my collagen, and I end up I think that one, I end up growing 20 x within, like, 45 days.
And I'm like, okay. So I figured out the formula of doing it. Well, what I forgot when I was launching these new products, I'll give a perfect example, was an L Tyrosine. This is L Tyrosine when there was 4 L Tyrosines on the market. Mine had 500 milligrams, 120 capsules, $18.
K? Competition had a 1,000 milligrams to double the dose, a 180 capsules, so 50% more, and $12. I mean, they were better in every sense. Right? But I thought I could marketing hack it.
And what it ended up doing was it ended up just costing me a ton of money. So I'm sitting there. I'm like, oh, I've got good margin. I've got and it's like, yeah, but you don't have a good product. And so that's one of the things that I kinda found through it.
I mean, I think some of those are very smart. I don't I don't know much about, like, Messi's brand or whatever. You see all these influencers nowadays. I just don't think an influencer is what, like, builds a brand unless it's, like, really good. I mean, Max Clemons has been a friend of mine for a number of years who is Alani Nu, Prime Hydration, you know, the founder behind all that.
He's had a lot of brands that he's done that had not done well. Now the ones that he's had do well is insane. But, I mean, it's it's I was talking to my buddy the other day, and it's like, some of these creators, it's like I mean, they just end up in lawsuits at the end of the mix. They're like, well, I thought you were gonna post more about this. I'm like, no.
I just had one post. I got all the equity. It's like, well Be like, thanks, guys. Yeah. Exactly.
Yeah. I mean, I've seen I've seen that just from our time, like, looking at acquiring stuff. I've seen brands that have some big name attached to them that you wouldn't even realize the big name was attached to them because early on they did some deal, gave them, like, 15 or 20% equity. They posted about it a few times, and then they've been absentee for 2 to 3 years. But you're like, now they they still get 20% of all the.
Yeah, they're still a big cap table. Yeah. Pretty wild. Pretty wild. It's crazy.
Yeah, I agree with that. I mean, speaking of Amazon and obviously you're you're running a marketing Amazon agency now. But, yeah, tell us tell us some some more about, like, how you think about finding the right niche on Amazon or the right keywords to grow your brand and maybe how that has evolved from when you're able to grow 5 to 5, you know, 450% over 3 months to what you see now in the Amazon market? I'm gonna I'm gonna actually take it a little bit of a different step because I think everyone is looking to, like, get their they're trying to get the right keywords. And I think what people have to do is they have to look at their portfolio and see, like, what's gonna win.
So let's just take, like, 5 to 5, for example. You got a multi, omega, a c, a melatonin, whatever. Like, all these different products. And it's like people are like, oh, we'll just figure out keywords, which is like, it's a 100% true. You gotta figure out the keywords, and you gotta figure out, like, the bidding strategies and how do you actually scale it and all this stuff.
But, like, I genuinely believe if you if you're in the wrong category or the wrong product, it's gonna be incredibly difficult. And so, like, my first thing is, like, try to find something that's, like, not overly competitive. Again, like we talked about, not too too trendy. Because when it gets too too trendy, you get too many people that go out there and do it. And so, like, for me, I'm like, look at your catalog.
And I I had a buddy of mine. He does, like, 40,000,000 on Amazon right now a year. And his is so simple. He goes in, and he does cacao powder and almonds and all these things. And his is more of a commodity.
And he goes in, and he's like, hey. This one has 3 competitors. I'll take up 2 spots because I'll launch a 1 pack and a 2 pack. I'll be at a really good price. I'll get it out there or whatever.
And so, like, for me, that's one of the things and I'll I'll I'll release a video here at some point, kinda going through a couple of companies, like, what product would I choose? But I would actually go out there. And, of course, most people know Helium 10. It's just a simple one. There's a number of other really good ones.
But I would just go out there and see, like go in your cat like, your product catalog and see, like, which ones are tough. Because for me, if I go try to relaunch our Absaider Vinegar, good luck. I mean, it's apple cider vinegar has now become a commodity, and you don't wanna fight against commodities that are the exact same products that have 30000, 4.7 star reviews. Like, I like going after I always say, is there enough market size to be competitive? What does the competition look like?
And when you look at the competition, what are their ratings and reviews? The worse they are, the better. Now make yours better than that. If all the competition is a 4.8 star, that probably means there's not a whole lot of improvement to be made. And then, you know, make a couple slight improvements that are genuine and real.
Go look at the reviews of these and figure out what do they not do well. Is the taste of it? Is the packaging? Is it, you know, too much sugar? Is it you know, figure out all those things.
Kinda like you were saying with, Will with IQ Bar. Like, sure. Hit some micro trends where, like, you can get a couple different customer profiles together. And then and then the last thing that you have to look at is what are the cost per clicks. And I just I have a simple ACOS formula that I look at and just a profitability.
And it's so simple, but what it is for people is your price of your product is $10. Your cost per click is $2. You will never make money. Yep. Right?
Because, yeah, the 20% conversion rate, you still get a 100% ACOS or a one x for OS. Like, you gotta be better than that. Now that exact same scenario, you get a 20% conversion rate, and it's a 30¢ cost per click. Let's go. Like Yep.
That's how you grow. So I think that's a that's a new factor that I've kinda continually taken in that is super, super important. I think that's huge. I mean, I've learned that lesson the hard way. We acquired we acquired a brand called Sapodilla.
That was a small brand, and it was a pretty reasonable deal that we acquired it for. But our our hypothesis was, hey. We can massively grow this on Amazon. It's kind of in this niche and, you know, hand soap, laundry, whatever. It was more like scent based organic.
But the CPCs are just what inhibited our growth. Right? Because in those categories, you're competing with, you know, a Tide or any of those brands that are just indiscriminately bidding, like they're bidding on keywords that don't even make sense for their brand is driving up because they've gotten, you know, $20,000,000 to spend on their Amazon CPCs. So just even being competitive on on terms that you should, in theory, have a right to win on if you're in the wrong category can make it damn near impossible, especially if for, like, something like that where it's lower margin than Beauty Care and it's higher FDA fees because it's heavier to ship. I mean, it's they can it can sink you pretty quickly.
I think if people would just look at the profit loss right away, get with, like, someone that understands it really well, and just be like, hey. Just would you do this? Because every agency is gonna tell you, like, oh, it's amazing. It's amazing. We can build you to a $100,000,000 a month, whatever.
BS. And it's like, they gotta be real with it. And I think I don't know. I don't think it's as complex as people make it. But No.
Yeah. Yeah. When Sean and I were, an agency together, we remember I remember doing, like, the kinda unit economics analysis and kinda breaking down. And I think, like, 2020, 2021, 10 to $15 ASP worked out, on on being FBA or a 3 piece seller now. Probably wanna be north of 20 knowing, that Amazon's fees have gone up.
Your ACOS just to keep the lights on if you're in a semi competitive category is probably 20% plus. If you wanna grow, probably needs to be 30, if not more. Again, broad brush strokes here. But, again, netting all that out, looking at what the landed cost is, and what's what meat is left on the bone. It's like, do you wanna pad your p and l, or do you wanna, you know, invest that back back in?
And I think seeing a lot more SKU rationalization now also. So, like, which products are you gonna bet on? And are you gonna just throw your whole catalog and assortment up there and let your long deal erode your your budget and spend? So, yeah. Glad you brought that up because I think that's something that, you know, while 4 years isn't a long time, a big shift in terms of what it takes to win on Amazon, from an investment standpoint, a merchandising standpoint, if you wanna be around and continue to grow.
Yeah. And Go ahead, Nick. No. I I was gonna go a little bit off topic, so I'll let you go. Yeah.
No, I was just going to tie that back to you. Like, is you're thinking about like what you spend money on and all that and how you grow it? Is a comment you made earlier, James, around like, you know, a portion of your catalog probably driving the bulk of your sales and then having the fringe, like having the past few years looked at a ton of brands that we were looking at acquiring and and Nick's obviously being one of them. If I were to look at everyone's sales and I would always have them send me like their sales by by UPC or by product Without fail, the 80 20 rule always holds Always holds true. It's like 20% of the products or 20% of the mix will drive 80% of the revenue, and the rest is just a distraction.
And usually, like, long tail ties up cash and inventory and is expensive to sell and market and doesn't really move. So I think too, like, if you're gonna be an Amazon and d two c brand, it's so easy to get in the SKU prolifer if I can even talk, proliferation. That doesn't really make a ton of sense because then you have minimum order quantities with your contract manufacturer, and all of a sudden, all this inventory is sitting on your books that could be more productively used just growing your core core offering. Well, it's it's I'm I'm glad you said that because it literally is exactly where I was kinda going with this. It's like, people have gotta be careful when they're listening to a podcast or, you know, whatever, YouTube video or whatever and, like, bring it to, like, the basics of it.
Like, in CPG, you have d to c, you have Amazon, and you have retail. And those 3 are completely different businesses. I mean, like, you guys know it very well, but I'm like, I don't think I understood it. Like, my issue early on in the business was I was like direct to consumer. Okay?
So direct to consumer, you don't have to have a 2, 3, 4 x ROAS because you have a lifetime value. They'll come back. You make money later. You can put them on the Internet, watch all this stuff. Yeah.
Amazon, you gotta make money. And then you got retail. And, like, retail, you cannot have one product. You have you wanna brand block 5, 6, 7, 10 products if you can. So, like, people will go out there and they're like, well, I'm doing what Ollie vitamins did.
And it's like, Ollie was run by Eric Ryan who ran Method and Welly and had 50,000,000 that he put into whatever. And it's like, I'm a big person on, like, keep profitability at the top thing, which is exactly what you're saying is, like, SKU rationalization. And I always use the example of people of, like, let's just say you have a 100 grand. Typical product launches that I look at cost about $15,000 in product, packaging, all that stuff. That's that's a typical number.
So if you launch one product at $15, you got $85,000 worth of marketing that you can go put. Let's change this and go a different way where someone's like, here's the oh, you have to have more SKUs, whatever. So they go 5 products. So I've got 5 products, $15,000 each, $75,000 in product. They have $5,000 per product.
This isn't including, like Yeah. You know, buy more inventory for later, anything like that. I mean, it's the quickest way to go out of business. It's like go launch a bunch of SKUs. To me, I'm like, launch 1 or 2.
Do really well. I I you I've used this example for a number of years and will continue to. I actually just met him. But Sean with dude wipes is the most focused guy ever. And look.
He's built like I'm probably disrespectful saying it's a $200,000,000, but it's probably bigger than that now. But it's like that was And they're incredibly they're laser focused on who they are and what they do and how they serve consumers. He's such a nice guy. He's sitting there. I'm talking with a guy and this guy.
I might have to get a I might have to get an intro. We'd love to have him on the podcast if you can ever Yeah. Hook us up with that. Yeah. I'm not super close to him.
I just was, like, chatting with him. And this other guy was talking, and he was like, hey, what's your thoughts on? And it was, like, a different product or whatever. And he was so nice about it. He's like, yeah.
No. That's super nice. Yeah. I know. We're just staying focused, though, man.
And I'm like, dude, you are the most focused guy. Like, you're so respectful and so focused. But I'm like, if people keep his focus like, look, the dude doesn't raise that much money. Yeah. And he's like he sees all these distractions all the time, and he's just like, no.
I'm good. I'm good. I'm good. Keep going. And it's like There's a there's a story.
When I first started my career, I was, like, 22. I worked in the I'm pet food business, which P and G owned at the time, and we probably had a 180 SKUs. And it was the same rule. Like, I remember we we had a big supply disruption. We weren't shipping, like, 80% of them.
And when we came back in stock, we were I was like, why is our marketing spend on, like, really niche products? I think we're spending, like, a ton of TV ads against, like, food for dogs that are over 12 years old. I was like, how many dogs are over 12 years old and how many people want to admit their dog is that old and needs a special food? Point. But I'm like, every end cap, everything should be our, like, top four products that are, like, 85% of our volume.
Like, why are we doing that? We switched that the next year, and we went from, like, a couple years of declining sales to we grew, I think, 10 or 15% that year just by, like, hey. Let's put all of our advertising and all of our in store promotion, everything we can against the, like, 5 or 6 products out of our one g that drive, you know, 80% of all of our revenue. And, like, let's get back to the basics. And I think for anybody that's starting out in consumer goods, like, getting distracted by that catalog mix is is a huge can be a huge problem.
And you hear stories like dude wipes, like, staying focused to win is probably one of the most important concepts you can have early on. It's yeah. It's so hard because it's like, when you're not doing well, you get distracted, and you're like, oh, well, maybe this will work. And it's like, nope. Just stay the stay the path.
I love that example. I run a p and l on most most companies I work with, and I just see, like, what is the because you'll look at ACOS and Amazon or ROAS or whatever. And if people would just break down the p and l by each product and share that to their CMO or their CEO or whoever it is, you'd see really quickly is the quickest way to start cutting costs is exactly what you did for rhymes. It's like, look at the bottom 80%, see how much money is going towards that byproduct, and you'll you'll see, like, oh, shoot. My tacos or my MER or whatever for this one product is, like, a 110%.
Yeah. Whereas, like, my top ones are, like, 20%. Whatever whatever the number is. So On the topic of operational effectiveness, you're the 2nd or third Brandbusters alum that's been, acquired. So not to say that every listener here that's running a brand, that is their aspiration, but I'm sure a lot of them are marching towards pursuing some type of liquidity event or, transaction.
I mean, talk to us about that process from being courted by various suitors, understanding, like, who is the right fit, going through due diligence, the o I LOI process. Like, what does that look like? Yeah. Does that feel like? I think you had some some comments that was the most fun you never wanna have again to that too.
But but let's let's hear more. Gosh. It's, from all the people that I know that have sold their brands, all different levels of how much money they've made, almost every one of them when they sell, if they're being honest, are like, money's fine, whatever, but, like, I'm just ready for I'm just glad it's done. We have an investor that's worth 2 point something 1,000,000,000 and another one that individually is worth, like, 3 point something 1,000,000,000. And they always give us advice.
They were not in the CPG space, and they were like, quit trying to build a business to sell. Build a business to be a business. And this is, like, you know, 2016, 17, 18. Like, these are where everyone was getting $50,000,000 valuations and $10,000,000 checks every other week. It's like that it was we were living in La La Land for a while.
Now we're back to reality, and it's like money's tight, interest rate's high. Like, it's tough. I think the most important thing is just build a really, really good business because, I mean, the stress that it comes with. So you go out and you either choose, do you use an investment bank or do you not? Do you go on depending on size of the company, do you use something like a Flippa or a, you know, some online business broker or whatever?
Yep. And then you get all your documents straight. So people are always like, oh, it's a total pain in the ass selling the company. And I was like, I don't understand what it is. I've got my book super straight.
I've got all these documents, whatever. Like, keep all this stuff super organized. Because I did not spend much time on that once I got it done. Everyone asked for the same stuff. They want an inventory report.
They want this. They want this. They want this. They want the 50 different reports. And so, I mean, even with, like, Sean, boom.
I'll send it to you in 10 minutes. And Like, 3 years of your P and L, your balance sheet, like, all that stuff. It's Everyone wants plus or minus the same. Put it in a big folder. Ship it off really good.
Then you go through the conversations, and then it's, yeah, super interested. Let's look through it. Okay. Cool. Let's go through.
Half the people are just looking to see numbers. And, I mean, like, Sean's a smart guy. Sean's looking for the best deal. And and in this market today, people are looking to get wins, like straight up wins. They're like, who's willing to undervalue their business that is in an urgent place to sell?
When when we were at the time, we were like, we we had decent profit and, you know, we we were in a we were in a good spot or whatever. Anyways, we had, like, 4 people on the table at the end of the day, and we had some stuff where, like, some people didn't like an investor and other people didn't like, you know, one small thing. And so it was just this, like, high stress, super excited. High stress, super excited. And then literally, like, we got the deal, and our lawyer came in.
Our lawyer who we're paying supposed to be on our side. Right? And at the end of it, we're working with this current company, and they come in. I actually just shared this. I didn't wanna share it at the time with with the company that was buying us, but they were like, well, since they did that, you wanna add a $100,000 back in?
And I lost it. I'm like, shut the like, we're not doing that. We're not acting like children with this stuff. Yeah. And I'm like, you doing that is gonna make me lose this deal.
I wanna lose a whole lot more than whatever. So, like, man, it is, like, highly stressful. It's it keeps your eye off of, like, what's actually important. And so, like, for anyone that's doing and and then to be completely honest, like, once you get acquired, there's a whole another side of it on the back end. Yeah.
Like, I've I've worked for a company and gotten fired, laid off, whatever you wanna call it, doesn't really matter. And I'm like, that day was, like, the craziest day to me because when I sold Vita 5, I still to this day have random shit I'm doing. I mean, my email is still like, everything's still there. And so it was like this I mean, this has been a year and a half at this point, and I still get the occasional, like, hey. Can you help with this?
Whatever. When I got laid off or fired or whatever you wanna call it from the job, I think they technically call it laid off, but I'm like They never hear from you again. But they shut my computer off. And I'm like, shit, are you kidding? This is the best thing ever.
Like, or someone to shut my other computer off. I think there's a really good point because on the acquiring side too. And for us, like, the reason I haven't acquired as much as, like, the value prop. It's like we're trying to play below private equity and a lot of companies are kind of tight whether they're profitable or not. And then, like, they're investors and exit expectations versus what we're willing to pay to try to see if we can make money on it.
Like, those weren't always aligned. So especially when you had, like, the Thrasios and everybody else of years ago just making the market insane and and out of touch with reality. But I think even, like, even on the acquiring side, like, having done some deals, you go through it, You're kind of adversarial and you're nitpicking and everyone's trying to get the best price and the best deal. And you're kind of at each other's throats with legal and and everything else. And then it's like, great.
The deal is closed. Now everybody needs to work together. So it's like you've just spent the past, like, 3, 4 months, like, nitpicking everything and, you know, kind of being being cold and trying to, like, get a better deal or get money off, like like you said. Yeah. And then it's like the deal is closed.
Okay. Great. Now let's go work on the transition together. Like, for me, I've I always find that to be just very awkward because you have a lot of 10, tense and awkward conversations on both sides during during the acquisition process. Yeah.
Then it closes and it's like, great. Now let's all work together. Like, we need you to, like, onboard us and help us transition everything. And and be best friends. We've been fighting for a while.
Now let's It's it's it's a it's just a very strange dynamic. Just the way that It is. The whole process runs. It's good hearing it from your side on that too because it's like no. I'm sure from your side, from the acquiring side, it's stressful too.
Yeah. Jeez. I just went through all this work that is could be worth nothing. And I've done this 10 times over. Like, gosh.
This is And you're getting legal you're getting legal bills and everything else. So you're like, you want the deal to get done because you don't wanna be stuck with, like, 25, $30,000 legal bill with nothing to show for it. Oh, yeah. But and then it's and then from what I understand, it's like the sprint after the marathon where okay. Maybe now there's a there's an earn out period.
And so you've been spending all this time. Now you gotta lease up for another 12 to 24, 36 months. Yeah. And then depending on, cash first stock deal, there might be capital gains implications. So it's like there's all these complexities where, like, shit.
This feels so great. I'm at the finish line, but you're actually having to hold on for dear life and, like, keep the engine moving. Both sides are trying to win. It's like Yeah. So it's hard it's hard to make it a full win win.
Yeah. Yeah. Yeah. It's winning to get through. When and endure.
Oh, yeah. I think 11 or go ahead, James. No, no, you got a chance. Go ahead. I was gonna say, like, one of the things I know about, like, because we we obviously looked at 5 to 5 is, is you guys went into retail and like you talked about direct to consumer, Amazon and retail, they're, like, 3 completely different business models.
Like, you you really have to manage all of them differently. I know you went pretty hard into retail with Target, some drugs, some some other things. For founders out there that think that, like, great, the buyers accepted me and put me on shelf. Like, let's celebrate and pop the champagne. What advice would you give them?
Because I think that's when the the risk and the work actually starts. Like, what would you do differently, like, with your expansion into retail, and what lessons did you learn kind of going into different retailers with 5 to 5 and some, things you learned might have learned the hard way? Someone someone said it to us. Like, me and my business partner, my business partner bought a nice watch whenever he got Target. And, later, he he had these are his words, but I agree with them.
He's like, man, I bought the watch before the cash came, man. And they're like, no deal is done until cash is in the bank. And you know how a lot of those retail deals are. Yeah. I mean, I think in one of the years that we had, we wrote off half a $1,000,000 at the end of the year.
I'm not saying I I don't even know if it was in total. It was, like, half a1000000 at the end of the year just cleaning the books because they just didn't pay. And it's like I mean, the fees and stuff, like, you gotta be really, really cautious on retail. Like, I will say this. I learned d to c really, really well.
I was in the 2016, 17, 18, 19 era of that stuff. It was a lot different than than it is now. I mean, I I I still think there's potential, but you gotta be really, really cautious. Amazon, I still think has a lot of opportunity. I think there's other channels that have really good opportunity.
Retail, you gotta know how to do retail. Like, whatever one you get into, I would get into 1 and get into it really deep. I would talk to people that are, like, experts and understand all of it. I will say this. I was really good at selling into retail.
I was not good at getting it off shelves. Now we still sold pretty well off of shelves, but nobody can tell you how to get it off shelves better. Because if someone could, then they'd be the best in the world. Right? Like, I mean, it is that is the hardest thing.
How do you go get 4,000 doors and get marking in each one of them to get someone to okay. Cool. We've all heard the IRCs and the coupons and the shelf placement and the like, it's all simple stuff, but, like, yeah, that's I I just think it's really tough. I'd be really, really strategic. Drug, stay away from that.
Yep. Drug is awful. I don't like drug. Yeah. Drugs drug can be challenging, and a lot of people get hung up.
I think there's always 2 concepts I tell people having having probably touched the stove and burned myself multiple times is, 1, I'm on the board of a company right now, and they're gonna get some distribution at Walmart. And this is something we're talking about, which is get really clear with the buyer on what their expectations are. Like, how many units per store per week is success? What stores are they putting you in? Are they in the right ZIP codes?
Like, can you, like, work with them and make sure, you know, the product is kind of where it should be for the consumer who's gonna buy it and get super clear on, like, what is he act he or she actually expecting the units per store per week to be so that you can Yeah. Try exceed those. And if you can sandbag it, try to sandbag it as much as you can so that you can exceed it. I think that's number 1. The second piece is read the fine print too.
Like, a lot of people don't realize you you have to give a bunch of free cases, a bunch of free products, pay slotting fees. If you don't hit certain, velocity rates, you might have to buy back product. And that's where it's for drug, especially. A lot of channels like that, I see it with, like, UNFI, the distributor. They're very unfavorable terms that if the product isn't moving, you may have, like, recognized that revenue, but then you're writing off a ton of you're either buying back or writing off a ton of product that's getting destroyed.
That is realistic. 6 or 7 months later later. Oh, it's so bad. I mean, I remember I still remember, gosh, this, like, PTSD for me. My gosh.
Freaking investors coming in. Hey. You made all this money. Where is it? Show me it.
Township State, well, they're they're 2 days late. They're what the hell? They're a 103 days late. I'm sitting there. I'm like, I don't know.
And he's like, sue them. Oh, yeah. Yeah. Go ahead. Sue a big retailer.
Yeah. That's not gonna be a war. Sue Walmart. That's that's gonna be a miracle. Yeah.
They're yeah. Your buyer's kicking me out, and they're pretty much flipping me off and telling me get out the door. You know, it's like, but yeah. No. It's it's as real as it gets.
It's I mean, it's retail is really, really tough. If you can figure it out, it's amazing. But it is it is a challenge. I think there's a really interesting approach, that I've always been an advocate of. I've even from my time at PG, I launched a brand called Xibo out of the Ventures Group, which was different than most of big CPG.
But it's like, I'm I'm a you I think you said it best. It's like pick 1 retailer and go really deep. Like, do that for exclusive for a year so that you're only focused on 1 retailer and that you can figure out how to move the product off the shelf at that retailer. I think Harry's razors did a nice job of that where they went to Target for a year. Then I think they went to to Walmart for, like, a year or 2.
So they only have those 2 retailers. Then after that, it was like maybe a Kroger or something. But they didn't go every store right away because then you're not you're just not gonna have the focus or attention to win in any of them. And then you can kind of grow your national awareness of the brand in line with your distribution. Otherwise, people just it's the same thing.
If you launch 5 products and have no money to spend on marketing, if you go into 5 retailers and have no way to move the product off the shelf or create a focused market plan for those retailers, you're you're kinda dead in the water. I don't know how you, like, say that enough because I got told that about a dozen times before doing this, and I just kinda ignored ignored nerds. Like, those that are out there that are like, hey. I'm going into retail or whatever. Like, it's as real as it gets.
We were in every single HEB store. Let's just call it 250 stores. I went down to one that was in a low income area. Again, ours was a semi premium product, and I think it was 12.99 is what we're selling it for. They were $2.99 and could not sell.
That's insane. And I went down there, and I'm like, that's cheaper than my cost of goods. Like, I need to go down there and just go buy them all back. Now I had to pay the cost on all of them. Yeah.
Anyway, so we went down to a 150 stores strategically because at first, we're like, no. No. No. We want all stores. That's the only way we're going in.
We were, like, super in our head, whatever. We sold the exact same amount. I mean, literally, like, there was 0 sold at those other stores. And so our numbers actually looked substantially better because we'd sell, you know, x number of units per store per week versus before it was, like, substantially lower because we had a 100 stores that were selling nothing. And so I actually think, like, the less stores, the better even though people think more better.
Agree. Now you're either, very motivated to transition, topics or going for punishment because post acquisition of IDA5, you've actually started not one, but I believe 2 new ventures, since those days with Leaf Home and then, your your agency Revive. Sean and I, ex agency, I work for an ad tech provider that works with a lot of agencies. Wanna kinda give you, you know, the floor for a minute to kind of like, hey. You work with a bunch of agencies during your time at Vita 5.
I think I watched a recent video of you kind of promoting, like, the launch of Revive. You worked with, like, 5, 6, 7 of them. Couldn't get it figured out. You roll up your sleeves. You were able to kind of growth hack it.
Now you're kind of doing this. So how do you feel like Revive is kinda differentiated? What do you guys bring to the table and kind of what type of clients, you know, are your sweet spot? Yeah. You know, I started it truly out of, like, I'm so sick of all these people, but don't get me wrong.
Like, everyone's gotta look at a business and make sure that it makes sense, and and it fits all the things. A lot of people wanna get into entrepreneurship because they wanna, they they wanna take unlimited vacation. They wanna go hang out. And that's just the reality. Right?
And, like, I have to I have to keep myself, like, very grounded. Like, I sit in this office, like, as much as I can. But I was having conversations earlier. It's like, I there's always more discipline that needs to be done. I started it and, like, it was just crazy to me because whenever I first started it, it was like, let me just see if I can actually do this.
Because by the end of Vita 5 in the early days of Vita 5, I was like, oh, we can do anything. To the end, it was like, every time we launch a campaign, I'm like, yeah, we'll see how that does. I mean, I was just, like, negative about everything because I'm like, it never was as good as we thought. And then Amazon was one of the first things that I was like, woah. I just saw success, like, right away.
But you also have to understand I was in that game for 8 years understanding anything and everything. And what I found is and and go look at this. Like, for those that are looking for an agency, I'm I'm the softest sell with a lot of this stuff. Like, I limit the amount of brands that I work with because I talked to a number of agencies. I talked to Sean.
I talked with I think it was 17 other agency owners and tried to figure out. And what a lot of them told me is once you hit a certain size, quality goes down, don't worry like, literally, this is like words. Quality goes down, don't worry about it. That's how you start making your profit. And that's and I'm like, holy shit.
Well, then go look at their background. Some of these, like, either the the there's some that, like, the owners are, like, pretty good and, like, have some really good experience and stuff like that, but there's a lot of them where look at their background. They were like you know, they worked at, nothing against it, a discount tire or some, you know, role, and they found a YouTube video, figured out how to sell. And they're like, yeah. I know how to do all this stuff, and so they've got all this marketing language.
So for me, I'm in a space where I'm gonna sell it the exact same way that someone else will. Right? I'm gonna my goal is to grow your sales, drop your ACOS, increase your ROAS. Like, that is how it is. I mean, truthfully for me, I have not had a single brand that I've worked with that I have not grown substantially.
Not 10%, 20%. Like, we're talking substantial growth numbers. But I'm super selective because I can't have somebody go mess up my like, you know, the pride of my numbers because of it. And like we talked about, if someone comes to me today so for example, I've got a I've got an electrolyte brand that I work with. Brought them from $10 to $350.
We're just continuing to grow with a month. And someone else came to me in a electrolyte space, and they're like, well, could you do that with me? And I'm like, not really. We hit the right time, the right place. They've got the right product.
It's the right, like, kind of switch on it. Nothing against the other one. But at $6 a click, it's incredibly difficult to win on. Yeah. And so that's kinda my take is, like, I don't really care to grow this.
I don't I don't want this to be a 10, 20, $30,000,000 business. I mean, would I like the money on the back end? Maybe, I guess. I don't know. But, like, I just wanna build this to, like, a really good size.
It's a good business that, like, I can be involved enough or as little as I want, and I can just grow really good brands. And I don't have to worry about the stress. Because I know with VITA 5, like, you hit a certain point, and this is just typical. When we hit about, like, whatever, when you hit, like, the 2 to $3,000,000 mark on DTC, you have to go raise a ton more money. So go look at all of them.
Casper, Purple, Ritual, Careof, and then the and then the math stops working and it just becomes really stressful. So for me, I'm like, I just like a really low stress. I I worked for Leaf Home, but started businesses within. So I started a garage flooring business, built that $12,000,000 run rate within about 8 months. And that was super fun.
It was within within corporate or whatever. Totally different style. Home improvement's really interesting too, though. Totally different sector, though. No.
Well, that's great. I I I love how you kind of pivoted your again, starting something, recognizing kind of a need and opportunity, starting that, finding another kind of interesting I think we think of innovation has to be as, like, blue flame, like, bleeding edge thing. Sometimes it's the not so sexy stuff. I mean, I think that's the one that, like, undercurrents of this whole conversation is innovation can happen in plain sight to stuff that's getting neglected and where players aren't allocating the funds and the resources and making the kind of ignorable, un ignorable, and attractive in some way. So I think you've done that in your, you know, multiple ventures now.
So congrats, and I really enjoyed the conversation. I know, Sean, I don't know if there's anything else you wanna poke or prod on, but, this is great. This is incredibly helpful. Thanks for the combo, Nick. I think I think the audience will learn a ton.
I'll end it like I always do, which is, go give Nick a follow or or connect request on LinkedIn. Follow him on on Twitter. Go check out his company. Do the same for us. We don't James and I don't monetize this right now.
So the best thing that you can do to help us out is share this podcast. If you found it helpful with a friend, a family member, a colleague, and then go to Spotify, go to YouTube, and click follow. It just helps us with, with our data as as we're getting this thing up and going. But we try to have meaningful conversations that are with founders that we we personally learn from, which is why we do this. And hopefully everybody that's listening can also learn from too.
So thanks for your time, Nick, and I appreciate you being here. Thanks, guys. Awesome. Awesome being here.