Nathan Resnick:
Hey, welcome back it’s Nathan Resnick with Product Sourcing School, brought to you by Sourcify. Today, we have one of my favorite e-commerce entrepreneurs on, Jason. Jason, thanks so much for joining us. Can you tell me more, just 30 second introduction, about you and your company?
Jason:
Yeah, Nate. It’s great to be here. Appreciate you having me on. So I don’t have a background in e-com, but a couple of years ago, a buddy acquired this brand, Arcturus, our company. And so I started working with him shortly thereafter. We’re known for sort of two different segments. We’ve got a big hunting line, but then we also have sort of an outdoor gear line, wool blankets, stuff like that.
Nathan Resnick:
That’s awesome. So I want to know what was the first product you ever manufactured? What was that experience like?
Jason:
So when we bought the company, we inherited the existing suppliers. And I’m not sure how the previous owners sourced them, but at that time, we were producing primarily ghillie suits, which are those big, bush-like hunting suits. A lot of people use those for hunting. A lot of people also use them for Halloween. And so that was the first product that I really experienced that was sort of new, you don’t see every day, that we were bringing in from overseas.
Nathan Resnick:
Got it. And so a lot of people are probably asking, because people that are listening, they’ve looked at acquiring a business versus starting one. What kind of made you and your partner decide to acquire versus start? Was that a big decision or?
Jason:
Yeah, he did most of the due diligence on that. But as I look back at that, I am really glad that we did acquire versus start, at least in our space. The previous owner had been on Amazon in some capacity since about 2010. And so he had had our first mover advantage for a lot of these products. Amazon right now, there’s still niches you can get into, but at least for us and for the products we sell, it’s been really beneficial to have sort of a seasoned listing that has been around for a long time.
Nathan Resnick:
Got it. That makes a lot of sense. And so as you decided to expand your product line, how did you find those factories?
Jason:
Yeah, so we realized about a year ago that we were probably, I don’t want to say getting ripped off, but we didn’t have a great idea of what other costs might be. Were we getting a competitive price or not? Like I said, we’d used really these two brokers to source all of our stuff, and we didn’t know what sort of commission they were tacking on. We just kind of paid the price they asked and assumed that was good enough. And so about a year ago, well, I started talking with you, and we got on board Sourcify, just to see, “Hey, we’ve got this existing product line. Are we getting a good price or not? Are there better ways we can make this?” And so that’s evolved to be something that, actually, we did save a lot of money. We’ve saved 30, 40% on [crosstalk 00:03:14].
Nathan Resnick:
Wow. You say it’s 30, 40% through us?
Jason:
Yeah. On some stuff, we were getting taken to the cleaners.
Nathan Resnick:
I didn’t even know that. I’m going to have to use that line. That’s incredible.
Jason:
Yeah. I mean, even when the tariffs kicked in last year, we were still making product for less when we landed than we were before. So we were able to absorb all those additional costs.
Nathan Resnick:
Right. And I remember, too, before, weren’t you solely in China? Was that right?
Jason:
Yeah. So, our product sourcing mix has sort of stayed the same. We were in China and India. Well, everything but wool blankets really made in China. Wool blankets always made in India, but we were having a lot of issues with quality control with our wool factory in India.
Nathan Resnick:
Got it. And I know a lot of people are going to be wondering, what’s been your main difference in experience manufacturing in China versus manufacturing in India?
Jason:
The lead times in India are much longer. And I think part of it is the product we’re producing. It’s just potentially more labor intensive. A lot of it, too, is just the shipping routes. Something that would take three weeks to get from China to here, it’s going to take six weeks to get from India. So we’ve had to think much farther ahead when we’re dealing with sourcing out of India.
Nathan Resnick:
Got it. That makes sense. And so when you now go through the process of expanding your product line, can you walk us through that process of how do you take an idea that you have and turn it into a sample and then a product that you’re selling?
Jason:
That’s a great question because ever since we bought it, we’ve kicked around how do we grow this brand? Who are we? And so far, we’ve had a lot of success just expanding on things were already successful. So, if we sell a line of wool blankets, introducing new colors, new patterns has been really successful. We’ve had a lot of growth just in terms of growing colors within skews or size options. I should say product pack options. So if we’re going to sell a two pack and a four pack, just little things like that, we haven’t really ventured too far out of what we’ve currently been doing. We have done some partnerships, most notably with Realtree. They’re a big licensed camouflage supplier. And so we’ve been fortunate enough to work with them and a couple of new leaf suits, but we’ve sort of just been growing off of what’s already worked for us. We haven’t taken a plunge of a new product that’s completely of sort of out of our wheelhouse.
Nathan Resnick:
Makes sense. Makes sense. So I’m curious when you’re managing production, I mean, a lot of people are curious about that experience. I mean, how often are you talking to your factories or your supply chain team? I mean, is that happening every night? Is it happening every week? Is it just depending on what is going on in production?
Jason:
Yeah, it really depends, though it’s probably more frequent than people would think, especially we’ve been going through sort of a rebranding process and between rebranding and all that goes into that. And then also launching new products and new product packs. There’s a lot of back and forth.
Nathan Resnick:
Got it.
Jason:
To where I’m talking to India and China sort of at least two or three times a week.
Nathan Resnick:
Yeah, it makes sense. And then what are your main communication modes? Is it WeChat, WhatsApp, Skype, email? I mean, how do you kind of balance out communication?
Jason:
Yeah. I’ll give you a shameless plug here. So we use Sourcify primarily to communicate. We’ve used WhatsApp here and there, especially when I need to loop someone else that I’m working with in, but Sourcify primarily has been our main method. It’s proved a lot easier for us to try to sort through emails.
Nathan Resnick:
Nice. That’s great to hear. What about quality control? I mean, when you’re managing quality control outside of Sourcify, I mean, are you having to rely on factory inspection themselves? Are you booking third party inspections? What does that look like?
Jason:
Yeah, so far we’ve just done factory inspections. Usually we’ll get a production sample if it’s a new product or product that’s only been produced once or twice. Get a production sample before they do a full run. And we’ll look that over and see if there’s any glaring issues. But then post-production, we rely on the third party inspectors to come in and sort of give us a report.
Nathan Resnick:
Got it. That makes sense. What about shipping and freight? I mean, how do you handle freight and shipping? Is that through a freight forwarder? I mean, do you work with local forwarders? How does that tend to work out?
Jason:
Yeah, it’s crazy. I was talking with my business partner, Kevin, the other day about what we were doing back in 2018. We were still shipping in LCL, so less than a container, less than [crosstalk 00:08:15] container, and just how much has grown since then. Now we only ship in containers, primarily 40 foot containers, and we’ve had a lot of success Freightos. For me, it’s been the easiest to work with because we can book, [inaudible 00:08:31] order, warehouse, get one price. We’ve got our own customs broker, which was really helpful because she handles everything from all locations. That’s really streamlined things for us.
Nathan Resnick:
That’s great. That’s great. You mentioned warehousing there real quick. Are you guys warehousing yourself? Are you’re working with a third party? Is it all through FBA? What does that look like?
Jason:
Yeah. So when inventory lands, at least up until this point, we’ve had it just trucked to our warehouse. We unload it. We’ll palletize it and send it into FBA. FBA does 90% of our fulfillment, and we’re also with Deliver. They do a few things through Walmart. We’re trying to grow that channel to sort of reduce the in-house shipping that we do. But yeah, as we kind of go into this coming fall and winter season, we’re looking to ship now, for the first time, full containers directly into Amazon to sort of remove one other piece from that puzzle.
Nathan Resnick:
Yeah, it makes sense. I mean, one of the questions I was going to ask is if you’ve done a cost analysis on palletizing and shipping directly into Amazon from your factory, or if it makes more sense to palletize because you’re saving a little on freight costs in America? It sounds like you’re in progress with that analysis right now.
Jason:
Yeah. I couldn’t give you the numbers because I don’t know them, but-
Nathan Resnick:
It’s hard to analyze.
Jason:
Yeah, it’s one of those things where it’s sometimes, from what I’ve read, you can get sort of lucky with how quickly Amazon will unload a full container shipment. Other times it’s sitting there, and you’ve got to pay for that chassis rental for three, four, five days.
Nathan Resnick:
Got it, makes sense. What’s one supply chain tool that you couldn’t live without? I mean, what’s something you really rely on?
Jason:
Rely heavily on Sourcify. It’s been very helpful to have kind of one point of contact. The guys, the Sourcify guys in country that are fluent in English and help us interface with the factory and help us work through any issues we’re having or any tweaks we want to make, that’s been something that’s made my job a lot easier. We’re doing a [inaudible 00:10:51] previously. That was a pretty difficult process, but because of language barrier, but also just because there wasn’t a whole lot of transparency.
Nathan Resnick:
Right, right. Makes sense. So everyone’s got a manufacturing disaster or a big story where the manufacturer came in and helped them a lot, I guess, a manufacturing success story. I’ve got to ask, do you have a story, either a disaster or success, you can share about a previous manufacturing partner?
Jason:
Yeah. So I’ll tell the disaster one first, and it’s not a huge disaster, but… So our ghillie suits, we had a big order come in hand. We discovered later, after shipping them all on Amazon, that they had put the wrong garment tag inside. So it was actually a medium suit, but they put a large tag inside. It said medium on the outside. Well, we were getting a bunch of returns just because the tags said the wrong thing, so we had to pull all of those back out and repackage them and send them all back in.
Jason:
On the success side, I think that’s far more interesting. We had these wool blankets we’re were making with another factory in India. And the overall build quality was good but, for whatever reason, the processes that they used and dye and creating those kind of created this odor or smell like almost if you walk into a mechanic shop, if you go back where your car is getting fixed, that sort of oily smell. And we tried to figure out what this thing was for forever. We were getting a lot of negative feedback, a lot of customers complaining. And it was not a great smell. We worked with a Sourcify’s guy in India, Anked [phonetic 00:12:35], who was an awesome dude. And he actually went around probably four, five, six different factories and finally landed on one that could make these blankets that didn’t smell.
Nathan Resnick:
Without the smell.
Jason:
It’s been a huge game changer for us. I mean, I can’t tell you how many positive reviews we get on those compared to all the negative ones [crosstalk 00:12:58].
Nathan Resnick:
Did anyone ever figure out what the smell was, though? I mean…
Jason:
No, I just don’t think they were washing the blankets a certain number of times. That’s my best guess. We still don’t know what exactly that was.
Nathan Resnick:
Yeah, the supply chain mystery.
Jason:
Yeah, seriously.
Nathan Resnick:
That’s funny. Cool. Well, I got to ask, what’s next? You guys are growing a ton. What’s next? What’s on the radar? Is it just continuing to expand the product line and diversify across channels? I mean, what’s really top of mind?
Jason:
Yeah. I think for us, it’s continuing to expand the product lines sort of in the key competencies that we have in hunting and outdoors. We’ve looked a lot at sort of tangential products within each of those spaces that we’re well suited to go into. And I think the other thing that we’re always continually working on is getting ourselves out there in other marketplaces. Walmart is one that we’ve worked hard on and is, at least for us, a difficult marketplace just sort of to get traction in, mostly because of technical reasons. But we would love to get out there on Walmart and sort of have… I couldn’t say [inaudible 00:14:13] because we don’t have a retail presence, but that is stuff that we’ve kicked around. At what point do we want to start selling wholesale? Do we want to actually be in brick and mortar stores so that customers have multiple touch points.
Nathan Resnick:
Makes a lot of sense. That’s awesome. If people listening want to reach out, ask questions, or get in touch, where’s the best way for them to find you? LinkedIn or Twitter or Facebook or whatever?
Jason:
Yeah, yeah. We’re Arcturus Camo on Facebook. You can drop us an email at sales@arcturusgear.com go to www.arcturusgear.com. I’m trying to think what other ways. You could send me an email at Jason@arcturuscamo.com. Be happy to answer any questions. And I really appreciate the chance to be on your show.
Nathan Resnick:
Awesome, Jason. This was fantastic. Thanks for your time.
