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Welcome to another episode of Product Sourcing Stories!

 

 

Nathan:

What’s going on? Welcome to Product Sourcing Stories. Today we have Dylan Whitman. He is one of my favorite, favorite people in the e-commerce industry. Dylan, give me a quick, 30-second introduction about yourself.

Dylan:

Sure, yeah. I’m Dylan. I’m actually not homeless. Want to clarify, this is corona attire. But my name’s Dylan. I’m a entrepreneur here in San Diego, live over in Mission Bay, married to someone also in the e-commerce industry, and I have been in both the agency world, founder of what’s now BBA Commerce. I have a SAS platform that does text message marketing called Retention Rocket, and then I’ve opened a few of my own e-commerce stores, a supplement brand, a CBD brand, and a beef jerky company.

Nathan:

That’s amazing. For those tuning in, Dylan is like the OG e-commerce. I mean, he’s given himself a lowkey intro, but, I mean, you see this guy at e-commerce events, and there’s hundreds of people lined up just to …

Dylan:

Oh, I don’t know about that, dude.

Nathan:

Dylan, I want to talk about the early days. I know now, you’re running quite a few brands, but I want to know, what was the first product you ever manufactured?

Dylan:

So that was the jerky. It was the first one we did, and we started working on that from concepts before I even sold BDA. We were working on it, and so yep. That was the one.

Nathan:

Got it. How did that go? Walk us through the process.

Dylan:

So it was interesting, because how that started was there’s a place in San Diego called Cowboy Star Restaurant, which is a favorite of a lot of …

Nathan:

[crosstalk 00:01:43].

Dylan:

Yeah. A lot of entrepreneurs go there, and I as well as a regular. They had started making this beef jerky, and they put it at the bar menu. I was eating it, and I kept ordering it. I got to know the owners over eight years of being there, and I said, “Let’s turn this into a product. This should be something out in the world, for sale.” So we struck out kind of a 50-50 joint venture, where we would market and take this out there.

Dylan:

So we had a product to work with. That was both great, but also a challenge, because what you can do in a restaurant is not necessarily what you can do at scale in a factory. So what we did was we went out and started looking for beef jerky manufacturers, and the first place we started was Google, because it’s not really that easy to do. Now, we did have our meat supply figured out, because we used the same meat supplier that supplies the restaurant, and we knew that was really great. It was top quality. They had already sourced that to Snake River Farms. It’s over in Idaho. They were well-known, but then we had to figure out how to turn this into the jerky at scale.

Dylan:

We used Google, and we found a place. We found a bunch of places and called them, everywhere from East Coast, West Coast, wherever. Then we found a place that was up near Reno, and we thought, “Okay, this is ideal. Quick flight from San Diego. Everything should be good.” Andy, who is a partner in the jerky company as well, and Angie and John, the owners of Cowboy Star, they flew up there and went and met with it.

Dylan:

Andy told me that he started getting concerned. They were driving way out into the middle of nowhere, nowhere, nowhere, and they pulled up to what looked like a house. They like walked through the house, and then there’s this giant jerky manufacturer in the back. He said it actually ended up looking okay, and they were FDA inspected daily, so they were a legit facility. So we started the product development process with them. Am I getting ahead of myself, or can I …

Nathan:

No, this is a great story.

Dylan:

Okay.

Nathan:

I mean, there’s a lot of [inaudible 00:03:58] produce food and supplements. So this is [crosstalk 00:04:01].

Dylan:

Yeah, yeah.

Nathan:

I mean, people think there’s some magic wand you wave, and you find your factory. You and your team literally had to go out to the middle of nowhere to find this facility. This is a fantastic story.

Dylan:

Yeah, 100%. Yeah, 100%. So they go out there, and I think they got comfortable. They got to a point where they got comfortable and said, “Okay. Kind of in the middle of nowhere, not what we expected, but looks reasonable,” and they had legit customers, major jerky brands that you’ve heard of in the grocery store.

Dylan:

So we started the process with them, and the goal was to replicate the jerky that we had in the restaurant. We went through a few different batches, and we kind of got close. Everything seemed fine, and then, all of a sudden, the communication just completely fell apart from their end.

Nathan:

Oh no.

Dylan:

They were just all over the place, and then we’re going a lot closer to when we were trying to launch. We thought we were pretty far down this process. Communication falls off, and, especially on a food product, we just didn’t … Even though they had major brands, we felt like they thought we would be a fun project and were taking us on, but we were never going to be a priority for them, because we were small.

Nathan:

Right.

Dylan:

I get that, from a business owner standpoint, but I also can’t stake my business on that. Right? I want somebody that’s committed and wants to treat me like any other customer. So we had to pull out of that manufacturer and were back to square one, and I think we got introduced from … We were digging around with meat suppliers, just comparing the one we already had and the prices, and somebody said …

Nathan:

How do you compare meat suppliers, by the way? Is it just you’re looking at their online presence? Are you tasting the [crosstalk 00:05:47]?

Dylan:

So you’re calling. You’re calling, and you kind of get into that … There’s a whole industry and distributors and stuff. We work through a distributor.

Nathan:

Got it.

Dylan:

Then we’re calling our own meat suppliers. Snake River Farms, they butcher and send it out from there. They own the cows. They butcher them. They send it out. So you’re talking to ranchers that are actually doing that, because it’s really …

Nathan:

Wow.

Dylan:

In supplements and in food, it’s so important to know your supply chain. Well, I’ll get into that in a minute after we talk about the next guys. So from a supplier, we got introduced to this other company, and it worked out even better. They were actually right outside of LA.

Nathan:

Got it.

Dylan:

The team went up there. Andy and Angie and our team went up there and were totally blown away. They were like, “Wow, this is more what we expected.” Now, they did say when they arrived there was kind of the matriarch. It’s a family business, and the matriarch was sitting at the front desk with a shotgun.

Nathan:

That’s their security, right?

Dylan:

That’s right. They’re not messing around over there. This is serious jerky security. So they went in there, though, and it was the real deal. It was a great manufacturing operation, and we got started again. It still took multiple rounds, going back and forth, to get the jerky right, even with something right out of the gate.

Nathan:

Right.

Dylan:

Another challenge for us is that we’re trying to be a better for you product and trying to have really clean ingredients in our jerky and things of that nature. That’s not most of the product on the market. So you’re kind of innovating and doing it on the fly and getting something back and being like, “Oh, maybe we need a little more this or that in there.”

Nathan:

Right.

Dylan:

Since then, we’ve developed a great partnership. I think partnership’s a key thing to talk about. A lot of people, with their vendors, are just constantly shopping for the next nickel down or whatever.

Nathan:

Right.

Dylan:

There’s been pains in the relationship, like the is in any vendor relationship. It hasn’t been perfect. We’ve had things that didn’t go how we wanted. We’ve had challenges. We’ve had a meat delivery there that they forgot to go outside and pick up until all the meat went … Things go wrong, no matter how good somebody is. But we’ve developed a real partnership over time, developed trust, and now, through working together more and more, we’ve gotten a good grasp of how our product development works, what the back and forth is, who’s responsible for what.

Nathan:

That’s a fantastic story. I mean, a lot of people think when they’re developing products, especially in different industries they’re familiar with, they think that you just kind of get a factory, and that’s how it works. But you have to go through different iterations. I’m curious. You’re doing a lot with food and supplements. How do you validate these ideas before you start a production run? I mean, walk us through that validation process.

Dylan:

So, first and foremost, I’m a really big believer, and you can see this in things that I’ve gotten myself involved in, with rising tides. I think that a lot of people try to just find a product they think is cool or viral or whatever. That doesn’t create a brand. To me, I want to build companies that are lasting, lasting longer than I’m a part of them. I love making money, but I’m not just interested in making money. Right?

Dylan:

So you can go out and you can build a cool brand or a thing or whatever, and there’s a lot of ways to go about it. But it’s a lot easier, no matter what, if you go into an industry that’s growing rapidly.

Nathan:

Right.

Dylan:

So jerky, I went through a lot of iteration on what type of products I wanted to involve myself in. But there were a few key things. Number one, and this’ll go to the validating, but number one is it needed to be a daily habit or could be a daily habit. I wanted products that people will have all the time, they’ll come back and buy again and again.

Dylan:

Number two is it needs to be products that are easily bundled. So how can we get maximum AOV from every single order? Both of those things go into maximizing lifetime value and maximizing average order value, right, and that dollars per order so that I can raise the amount I’ve got to spend on a customer. That’s so important these days. You have to be able to not only have margin on your product, but how can you bundle and get the maximum cart size and share of wallet.

Nathan:

Right.

Dylan:

Then number three is growing industries. So, as an example, beef jerky is one of the fastest. Meat snacks, is, I think, fastest or second growing fastest category of consumer-packaged goods in the world.

Nathan:

Wow.

Dylan:

That’s driven by a variety of factors. It’s driven by snacking behavior. It’s driven by a shift towards low carb diets and high protein. All these things have driven meat snacks to be a really growing category. So I looked at that and I said, “Okay, I’ve got 100 ideas of products, but here’s a product that somebody can regularly get and they’ll subscribe to. It’s something that is growing really rapidly, and it’s something that really lends itself to bundling, as you get four or five, six flavors going, right, and selling that online.” Then yeah, so that kind of was the process.

Nathan:

Yeah, that’s an amazing overview. I’m curious, too. With food production and supplement production, how do you manage quality control? I mean, is it different than producing and managing quality control when you’re producing, let’s say, a hat or a hoodie or a watch? I mean, because it’s a product that someone is putting in their body and eating, what does that quality control process look like?

Dylan:

Yeah. So for jerky, there’s a lot of things that have to happen. There’s a lot of moving parts. That was another thing I liked about it. These days, you can get into any business you want. You can find the information, if you’re willing to put it into work. But I do like things that are either differentiated or have at least a little bit of a moat, if you can do that. Jerky has a little bit of a moat. It’s not easy to find the co-packers. You have to put in some effort.

Dylan:

Then, on top of that, to the point of where you’re going there, it’s highly regulated. So you have to get your packaging approved by the FDA before you can even … We have to go back and forth with the government. When the government shutdown happened, that became an issue for us, because we couldn’t get our packaging approved, or USDA or one of the two.

Nathan:

Wow. Yeah.

Dylan:

I can’t remember. It was one of those two. But we couldn’t get our packaging approved, so it took a while, and it was an issue.

Dylan:

But I think it’s two key things. It’s, A, making sure you’re in compliance with whatever governmental regulations, because if you’re meeting those standards, you’re going to be good.

Nathan:

Got it.

Dylan:

Secondly, you better trust your partner.

Nathan:

Right.

Dylan:

Really make sure that they run a tight ship. I think that, particularly for new entrepreneurs, if you’ve been burned before, you know better. New entrepreneurs want to feel like they’re stumbling into a great circumstance at all times. They meet some manufacturer, and they ignore every red flag, because it’s like, “I found what I need.”

Nathan:

Right.

Dylan:

They just want to move. You know what I mean? You’ve seen it 100 times.

Nathan:

Yeah.

Dylan:

They just want to move, and they ignore all the questions they should be asking, because they want it to be the right thing, like a new relationship for some people, right?

Nathan:

Right. Yeah.

Dylan:

“Oh, I love this girl.”

Nathan:

The next day …

Dylan:

Yeah, exactly. Then it’s like, “Oh, maybe I should have thought about this, this, and this.”

Nathan:

Right.

Dylan:

But you really have to trust them, because, at the end of the day, yeah, they have their own business consequences, but ultimately, if the product has a problem, if somebody gets sick, if something bad happens, you’re done, and that’s on you. That’s your brand. Nobody’s heard of that co-packer. They’ll come back.

Nathan:

Right.

Dylan:

But that’s it for you.

Nathan:

Yeah, that makes a lot of sense. I’m curious, too. With the food and supplement industry, I mean, how are you handling third party logistics? Is it shipped from these co-packers, or how does that work with food and supplements?

Dylan:

Yeah, so on the supplement brand, I’m personally shipping everything every day.

Nathan:

Great. That’s awesome.

Dylan:

[crosstalk 00:14:16].

Nathan:

I want to touch on that, because Dylan is like an OG, and to see him really hand these packages out and put them in the shipping carrier’s hands, I mean, it goes to show, when you’re starting out …

Dylan:

You’ve got to do it.

Nathan:

Yeah. When you do it yourself, too, you know all the numbers behind your logistics.

Dylan:

That’s right.

Nathan:

So you probably know how much it costs to ship any one of your supplements anywhere in the country, if not in the world.

Dylan:

Yeah.

Nathan:

I mean, that’s so key to starting out, is knowing your costs, and when you do it yourself, you know everything.

Dylan:

100%, and not only that, it’s knowing that every single thing has the little card I want in it with the stickers and the stickers placed right here and all this. We didn’t create an overwhelming unboxing experience, but I want things to be consistent.

Nathan:

Totally.

Dylan:

There’s a lot, and there’s something special about shipping out your products every day, from a motivation standpoint. Now, on the jerky, I was going to say, we do have a 3PL. We work with, shout-out, Alex Canet and Shipping Tree. They’ve been actually doing a phenomenal job for us and really, really helped us a lot. They do the jerky, and that’s fine.

Dylan:

But on the supplement, that’s kind of already going, and Andy’s running that mainly now. It’s kind of got its legs. But on the supplements, I’m doing everything on that brand right now, everything.

Nathan:

That’s awesome. That’s fantastic.

Dylan:

Yeah. But it’s good, because that keeps me motivated when I wake up in the morning and it’s like, “Okay, I’ve got to go ship these out. I’ve got to stop” … It makes it a lot more tangible, and it’s really easy to forget that if it’s out of sight, out of mind. [crosstalk 00:15:51].

Nathan:

Yeah. Yeah. What’s one tool in your business or in your supply chain that you couldn’t live without?

Dylan:

I mean, it’s so lame to say, but you’ve got to say email. I mean, email. I don’t know. I’m trying to think of one.

Nathan:

[crosstalk 00:16:13] these old school co-packers, right?

Dylan:

Yeah.

Nathan:

I mean, you’ve got to call them, right?

Dylan:

Yeah. Really, it goes back to the basics, because that’s where I … I mean, okay, I will tell you one thing, actually. If I didn’t have my thermal Rollo printer and I was trying to deal with a fucking traditional and print out labels …

Nathan:

Right. Yeah.

Dylan:

That is awesome. Then, honestly, dude, Shopify. Let’s be honest. Shopify has changed the game in how you can do a small business. I mean, you could set it up [inaudible 00:16:48] where you could do these things, but it was not as easy. Taxes, all those things, all these things that used to get entrepreneurs in trouble, this technology is solving for. Things like Sourcify are mitigating the things that would get people into trouble so that people …

Dylan:

I always like to say that every business that’s surrounding e-commerce, you have a maker that makes their widget and sells it, and every dollar and every second spent on anything that’s not making that widget and delighting your customer is complexity. People come in, and they take that money for complexity arbitrage. You know what I mean?

Nathan:

Yep.

Dylan:

So the goal of technology, ultimately, then is to solve for that complexity so we can get down to the point where, 100 years from now, it’s like magic. They make something, and it’s sold. Then somebody comes and picks it up, and it’s fucking done. Right?

Nathan:

Right.

Dylan:

But in the meantime, you’ve got all these tools, and Shopify, Sourcify, all these ones are getting rid of this complexity.

Nathan:

Got it. That’s amazing. So I know you have so much going on already, but what’s next for you? I mean, are you going to launch more brands? I mean, I know you have Chillest Capital going on as well. You’re investing in a few different e-commerce companies and software companies.

Dylan:

Yeah.

Nathan:

What’s next, or what are you most excited about?

Dylan:

For the past year, I have been working on kind of this business that I’m wanting, but I can’t talk about it yet.

Nathan:

All right. Well, we’ll keep an eye out.

Dylan:

But this stuff, I’m enjoying. I’m enjoying doing the brands and stuff, and a big part of that, for me, was dogfooding …

Nathan:

Totally.

Dylan:

… getting in there in not just one, but have a few different brands where I’m trying different things out and stuff so that as I’m doing …

Nathan:

Right.

Dylan:

There’s a lot of people who run e-commerce service companies and SAS companies who have no experience ever actually running a brand.

Nathan:

Right.

Dylan:

So that’s what that’s about. But, also, it’s been kind of thinking about what is going to be the next really big thing? Because I want to make more of an impact than I did with the last business.

Nathan:

Cool. Awesome. Dylan, thanks so much.

Dylan:

Sorry I rambled there.

Nathan:

Yeah, no, that was fantastic. Thanks so much for coming on Product Sourcing Stories. If people want to reach out or get in touch or shop with any of your brands, where can they find you?

Dylan:

Best place is LinkedIn. Easiest place.

Nathan:

Awesome. Cool. Dylan Whitman.

Dylan:

Cool.

Nathan:

There you have it. Thanks again for hopping on.

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