From Zero to Hero: OWYN's Success Story on Amazon

In this episode, Adam Shaffer talks with Rob Rich, Chief Business Officer EVP/GM of E-Commerce for OWYN, about the amazing success story of OWYN. OWYN is now the most popular plant-based protein shake seller on Amazon, but their journey to get there was not an easy one.

Adam and Rob discuss the challenges OWYN faced when starting from scratch, including getting the Buy Box, getting products to Amazon, freight costs and storage caps for FBA. Despite these obstacles, they were able to develop a winning strategy that allowed them to succeed on Amazon, and today, OWYN is one of the top-selling plant-based protein shakes on the market.

So, tune in to learn more about OWYN's success story and how selling on Amazon was key to its success. For more information on OWYN, visit their website at https://liveowyn.com/.

The Planet Amazon podcast, brought to you by Phelps United, addresses all things Amazon and other eCommerce marketplaces. In each episode, we talk with Brands, Agencies, and Sellers about Amazon news, new features, policies, brand policies, logistics, marketing, issues, and challenges, among other topics.

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Transcript

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Welcome to the Planet Amazon Podcast with Adam Schaffer, where we explore the world of Amazon and other e-commerce marketplaces. Join us as we delve into the latest strategies and tactics for successful selling on the world's largest online marketplace. Hello, I'm Adam Schaffer, and welcome to the Planet Amazon Podcast, where we talk about all things Amazon. And I'm very excited today for this episode, beque. We have a person I know for a very long time, an absolute genius, you, you're gonna love him, and he runs one of the most successful brands on Amazon and, and actually at retail also. And he'll tell you about it. Um, we worked together in the tech industry, uh, many years ago, and we didn't stay too in touch. And during the pandemic, we seemed to catch up, and I was shocked when we started talking and comparing notes about our lives that he was actually in the internet business, in the e-commerce business, but in the Amazon business. And we had so many things to talk about from that, uh, one connection. And so I wanted to bring him on the show and introduce you to Rob Rich from Owen. Rob, welcome to the show. Thanks for joining me today. Thanks for having me. Great to see you. Great to see you again. And you know, we, we, um, have a long history together, but then we had a real kind of big breakup in between, and I I was really surprised that, um, we were both somehow from the old industry back in a new industry together. And, um, I, I was fascinated by your story. So would love you to share it with the audience. And, and I'm hoping, you know, what comes out of it is, hey, we get to hang out and talk a little bit, but people could pick up some tips and tricks on your success because Amazon is no easy, um, marketplace to navigate. So, you know, why don't you give us the elevator pitch. Tell us a little about yourself and, and Owen. Well, I started, um, doing this 30 years now, uh, Ann, which is pretty hard to imagine because as early as 1993 I'm doing, I'm doing electronic commerce, and it just seems like if I was to make any kind of a, uh, explanation for my career, it would be, it really is around e-commerce. It wasn't about anyone industry. I, maybe I was in tech computers for 10 years, you know, that was the 15 years. Those were the things that, you know, were selling back then. My early days I started, uh, my own company where you could, uh, reach out to find your long lost friend or family member. This is like 10 years before you know, Facebook. This is 1994. It became u us search.com. And, uh, you know, here your, your trading information as early as 1994. And then when we got to, uh, later years, I'm a Dell, uh, and, uh, ran dell.com. And so suddenly you're in a, in a much bigger scale. Uh, and, uh, and then eventually kind of where you and I, uh, ended up in this, uh, world of electronics, an apple computer with, uh, Mac Mall and PC Mall, the old cataloger and, uh, making its change from big millions of catalogs going out to, uh, to electronic commerce and selling online. And, uh, and so, you know, after I, we did that, uh, I entered into a new industry altogether, which hadn't really done any kind of e-commerce, which was furniture and home furnishings. And I was doing that for a few years and, you know, built a, you know, huge Amazon business, um, uh, 40 million, 50 million business in one year with the largest importer and wholesaler of furniture and home furnishings in the country. Had been around for 40 years. Very successful private equity owned company, but all wholesale selling products to retailers and never doing anything online. So I, you know, I created an entire online business. And so in 2017, I'm on the board of directors of a national nonprofit regarding food allergy, uh, food allergy research and education. I have a peanut allergy. I'm literally the oldest, uh, surviving peanut allergy sufferer in the country, you know, and, um, and I'm on this board and I'm speaking with this other board member whose son has a severe allergy, and he's asking me what I did, and I said, I do e-commerce. And he says, Hey, I need that <laugh>. And this guy, you would never really know his name, but he's like, he's like the, the king of, of snacks and, uh, and drinks, food and beverage. Um, you wouldn't believe it. He's probably in the last 10 years, done, uh, eight 10 companies that he created from nothing and sold, and no less than two, 300 million, some of 'em over a billion dollars. So billions of dollars in food, snacks and beverages that you've all heard of, skinny pop, popcorn, you know, for example, veggie straws, these kinds of things. In any event, he's got this kid with, uh, food allergy, and he's involved in the charitable cause I'm the only board member with a food allergy, and he's starting this beverage, uh, Owen only what you need, uh, O W Y N for your listeners. And, uh, uh, it's, it's intended to provide, uh, a protein, uh, product, a good healthy product in particular for people who have, uh, intolerances and allergies. It's free of the top nine major allergens. It's tested to be free of that. And so there are tons of people who don't want to be on dairy. It's non-dairy, it's vegan, it's, you know, plant-based, as they say, very hot. And so we started this in, uh, at the end of 2017, and I kind of left the furniture business and jumped on this guy's bandwagon because he was trying to, uh, get into, uh, a new brand, uh, but but also didn't know anything about e-commerce and online. And, uh, and, you know, this is my bread and butter, but, you know, these guys know retail and they know how to get their product into Walmart, into Kroger and the groceries, but they don't know anything about standing up in So, so, Rob, you actually, I, I didn't realize, so you, you actually launched it from zero on, from. Zero Amazon. Yep. Yeah. Which is really hard to do. Really hard to do. Yeah. Yeah. Right. I mean, that's, that's some of the craziest, uh, parts of the whole endeavor, you know, because obviously it took a year or more, uh, to get actual retail, you know, get your product into the, the store. So we had the opportunity here to, uh, get product in, start selling right away. We have a website, uh, live owen.com and, uh, and Amazon. And then, you know, at the very end of 2017, we were off to the races. I'm selling this product now. You know, I would say just speaking of, you know, the, uh, getting into the Amazon business, you know, there were a lot of, uh, a lot of considerations, um, that I needed to kind of, some of needed to lay down the law, so to speak, with my own company about if you're gonna do this, you know, you need to understand how this thing works. Because I had just come from a situation in the furniture business where, you know, we, we were, uh, you know, to step back and just think about these guys and the learnings from them. They were a one P, uh, that also had direct fulfillment. uh, they would, Amazon would issue a PO and they would send, you know, truckloads and truckloads of product in, but also they would have the ability to do online, but they hadn't done online. And, um, uh, so when I got in there and I started this business, I'm looking at, I'm starting this Amazon, uh, you know, business with their products, and, you know, they've got 40,000 SKUs all housed in 1 million square foot warehouse in Chino, California, and, uh, you know, 40,000 SKUs. And so I sat there manually. Oh, Owen has 40,000. SKUs? No, no, the furniture business. The furniture guys, yeah, yeah. Okay. 40,000 SKUs. So I start this thing up, and as I'm doing it, I realize, wait a minute, this, this, whatever piece of home decor is being sold by this other guy, Woodland Imports, who are they? Oh, well, that's our customer, you know, that's our best customer. I'm like, what do you mean? I'm like, he's like, yeah, well, we sell to him, and then he puts it online. I'm like, well, you know, we're trying to set up our own, I, you know, Amazon business, why would you do that? And now you're one P so you're giving this guy a 50% discount, and he's taking it and he's, you know, making pennies, and he's, and he's starting this whole business of his own, and now we're competing against our own guy. Yeah. And then Amazon, because it's one P, they price their own goods, and they see the same product, which is us selling it to this guy at 50% less. So what do they do? They, they go out their price lower, lower the price, they match the price, then they say, Hey, you know, your stuff is too expensive, you know, we're not making enough margin, you know, and the freight's expensive and all that stuff, so, you know, you better give us a better cost. And so, you know, it's a, it's a huge problem. N not to mention the fact, you know, people didn't quite understand the concept. They're like, well, what does it matter? You're selling it to the guy who's selling it to Amazon, you could do it yourself. I'm like, well, it matters because when you're doing it yourself and you're, you know, vendor central, you're one p, you know, you're gonna have a higher conversion rate. You're gonna get all of the benefits of Amazon's marketing machine. So, you know, you're, it's not apples to apples just because it happens to be the same ASIN that you're selling, you're gonna lose conversion. Because if you're, if you're one P and you're the seller and you're the manufacturer, and you control, then you're gonna be able to maximize that. But, you know, otherwise you're gonna have a lower conversion with these guys, and you're gonna, you're gonna lose money. So right away, I'm like, you gotta get out of this and, uh, and not sell to these guys and choke 'em off. So when I go to the, uh, beverage business, I have to explain to them that you can't just, you know, if you get into trouble with your product and you, and you overproduce and you undersell and you wanna liquidate it, it's gonna screw your e-commerce business up because you're gonna, you're gonna, you know, dump it in Miami somewhere, and it's gonna end up online, and, uh, it's gonna come back and haunt you. So these kinds of, uh. So, so what did you wind up doing, Rob? Like, so, so from your experience in the furniture business, you come to now this startup on Amazon, and you gotta launch it, or is it one, one p or three p? What, what did you do? Oh, three p all the way. So there, you know, is insistent that you go three p even if you wanted to go. One P and, and tell me why, tell everybody why you thought that was the best way to go. Because, you know, first of all, may, maybe at a startup, maybe Amazon might not have been that interested in buying direct, but assuming they were, you know, that's always the big question. Am I one P three P hybrid or do I load all these other sellers to sell the hell out of my product and destroy my channel? Yeah, <laugh>, I mean, I think that there is always gonna be benefits of going one P, which are, which are clearly that you get mar you get the marketing muscle of Amazon. If they want it, they buy it, the economics can be better. It really depends on the weight of the product and the cost of freight. You know, it could be different for different industries. you know, it's tough because this is a heavy product and, um, that involves, you know, a lot of costs, which you bear when you go three P and you wouldn't necessarily bear, although it is a major consideration, you know, going one P. So you'd say, Hey, you know, that advantage one P, um, you know, uh, the big negative could be that if you don't have price discipline in your channel, or if you're worried that you, that you may not have price discipline in your channel, uh, and you're trying to make a name for yourself in retail, and you're going out to Walmart and Target and Kroger, and these guys, well, they're going out with really low price goods, and they're forcing you with even lower margins. Mm-hmm. Right? And they're expecting to be able to go out at, at prices that are much lower than what you would want when you, you were, when you're, when, if you're gonna be three p, you're gonna, or, or one p regardless, there's a margin that you're trying to hit. And so you could be, uh, you could be in a lot of trouble, you know, if you don't, if you don't make the right choice there, and if it turns out that you give up, uh, with one P, you're giving up pricing control. So with three P, you can actually set your own price, but with one P you're selling to Amazon at a contracted price, and they set the price. And so if the. Anything goes. Right, if you know, well, if you have channel discipline, and you have per, you know, ways to sort of, you know, um, uh, support your pricing through like a map policy, for example, which we can talk about, it's an interesting, you know, approach and how you use it or don't use it, and the benefits, but it, you know, there are ways that you can try and control your channel, um, to ensure that you don't get yourself in a situation where if you are one P that Amazon is able to, or will in fact lower the price to the, to the point where, you know, it no longer becomes economic for you. And then, you know, then where are you, you know, they've set the price low, it's too low for, you don't wanna do business. Yes, you can get volume out of Amazon, but what good is that, do you, if you're not making the profit that you require? So if you're, if you're pissing off the rest of the channel, you know, uh, your other, your other retailers, but so, so you, you, you went through p that's cool. I mean, I'm, I'm, obviously, I, I love three P. Yeah, I definitely think sometimes hybrid, depending on the weight, like you said, is important. Yeah. But so now you're three P, but you're still at zero. So what's, before we even get into the, how the hell did you get velocity? Yeah. Because your, your products are best sellers. I, you know, I see a lot of the, the, the tags, uh, the badges. But, um, how, how, how are you fulfilling it? Are you guys doing FBM yourself, or are you shipping an fba? No, we've predominantly done fba. And, um, and you know, again, that's what that, what that is what constrains the profitability to an extent, because it is expensive and complicated. You have to sticker in a certain way and get the product in there. It's a, it's a real pain in the butt. Um, but it's the most efficient way to go. Um, because if you're FBM then you know, you don't get the benefit of, of the prime badge, which is critical for having a high conversion rate. So, you know, you may feel like you can, you know, and again, it depends on freight and where you are. We're a heavy product. So if I, if we're located in New Jersey and I gotta sell, send, send the product over to California, it's gonna be very expensive. Perhaps not so bad if I'm, you know, New Jersey to New Jersey, the benefit of, of Prime and FBA is that you get your product into Amazon's network. And there's, they're clearly, you know, the most efficient at distributing product as close to where it needs to be at the best PR price possible. But they do have you over the. Barrel. I, I found their, their freight rate still like better than no matter what we would get U p s FedEx like you, you know, so, so, uh, you know, we, we have seller fulfilled prime, but you, you're talking about big bucks when you're starting to ship heavier stuff. And, but. I'll skip, I wanna add one thing, Adam, that, that this allowed us to build a very big website business. So from the beginning, we had this website business, but we didn't, we were having to ship it outta the office, right? We have the secretary sending, sending a case of product, or like, we gotta do something here. And I discovered mcf, which is multichannel fulfillment. And this is a, a program that Amazon has where they're basically, um, you, you, you, um, you, you, you take the inventory that you already have in f b, which is your own consigned inventory, and they fulfill it for you and the pick patent chip cost with the box and everything. So. Then your three pl. Oh, and it's, and it's by far the most economic way to get to, to send product heavy light. Um, well, I will say that when you get to about, like three cases, you know, then if you are in New York and you have a place in New York, you're sending to New York, it could be cheaper. Or if you're in California, you're sending, in California, it could be cheaper. But for a 12 pack case of, of drink, you know, 24 pack case of drink or light stuff like a, like a protein powder, like a pound or two pounds, you know, there's just no better deal than Amazon M mcf. The, the, the, the flip side is covid. So when covid happened, everything flipped, and F B A was toxic, you know? Yeah. Because they couldn't get anything out the door. You couldn't get anything in the door. And so if you had f BM and you had the ability to fulfill by merchant and get your product out the door yourself, you could actually win the buy box and the listings and everything. It was a cockamamie time, you know, crazy. But it forced us to think that, oh, wow, you know, Amazon's got us here. There are, there are, it is where we sell. It's our, it's also our fulfillment for our website. It's like, we put a hundred percent of our eggs in this company and they fell short. You know, we can't rely on Amazon, they'll kill us. You know? So you can't. So, so were you able to now ship hybrid? So now we're hybrid, we've got, you know, three pls, we've got a variety of them, and, you know, the, the, the, and I'm glad we did because the complexity and challenge, uh, that has befallen us, I would say over the last five years, due to our growth in, in actually turning product as, as quickly as we have to, in order to get product into FBA, is a monumental challenge. And it's very expensive. And we're at the point now where this is where you have to consider the benefits of one P over three P. And we're actually now, um, at that point, we're actively in, let's say, negotiations with Amazon on the very subject. So we can talk about That's an interesting moment. So, so you're actually, um, thinking about going back. Yeah. Cause you know, look, we're, we are, um, by far the largest beverage company on Amazon, on three p, by a, by a long way. We're one of the fastest, we are the fastest growing, uh, uh, beverage and protein drink in the country. And, um, and on Amazon, you know, our growth has been spectacular. We're still short of the biggest guys who represent, you know, big brands that are owned by, um, Nestle and mm-hmm. <affirmative>, uh, you know, major, major CPG companies, the people that hope, you know, we hope to sell our company to one day. Um, uh, but so, but we're, we're at that point where we could be in a situation where they may force us, um, uh, to do one p. Uh, and we don't wanna be. Clear. How could they do that? How can they force you? Like, what would they do? Well. Cause, you know, they do it, like, we're starting to see it on three P, something we hadn't seen in, you know, ever. But in the last couple years we saw it where you could lose a listing or the buy box if they're doing a price compare, um, you know, as if it was one P. So with one P, if they do a price compare, they just drop the price and you're, you know, that's it. But in three p, we'll, how do they do that? How can they do that? Because we can control our price. Well, they got one up on us, which is that they can just make it so that the listing isn't available. That. That's shocking. So, so you've had some listings, you've had some buy boxes to press. What's that? Yeah, we've had, we've had some, we've had, yeah. And so part of it is like, okay, there's a deal going on at, at Walmart, you know, with my retail guys of running a deal and, and, and Amazon's doing a price match and boom, boom. So thank God my, you know, my, my entire portfolio isn't in an, in these other, uh, you know, uh, stores, because Amazon will be very aggressive now on three Ps as well. And so they could, if that was on your main product, they could just shut you down across the way and say, you know, come to one P and then yeah. A problem solved. So, you know, look, I don't think that, I mean, we're not there yet. When, if anything, from a resource perspective, you know, they're not touching people that aren't lower than, you know, 30 million, you know? Uh, so, you know, it's, it's not like the old days where, and it's different in different industries, you know, uh, when I was in furniture, we weren't, even, when I was doing five, 10 million, we were doing one p we had vendor relationships and but there. But there's, but there's no humans on the, on, on below 30 is what you're saying. I mean, it star Yeah. Pretty much. Exactly. And so, and. Ballpark you, I mean, I don't know, I didn't talk to you before, but I mean, can, can you we're, yeah. So you're, you're at the 30 ish. Yeah. I mean, we're, we're there and, and growing so fast that, you know, if you just wait a minute, we're, you know, we're well beyond. So that's why I'm saying we're being told by number of sources that we're, we're at the, we're the biggest three p there is, and you can, we can feel it because we're kind of groaning under the operational weight of, of turning, uh, you know, uh, stickers on, on f b boxes, which is a monumental task. I mean, we're talking a hundred thousand cases a month of stickers, you know, and, and you're dealing with three pls and who does that? And it's just been a really challenging moment, uh, with labor. And who are the three pls out there who do this? Not many. Right. You know, and, uh, and so, cuz you know, when we did it in furniture and other businesses, you do it yourself. When the Mac Mall and all the stuff that we did, we did it ourselves. We had our own warehouses and everything like that. As a startup, clearly that's where we need to be. I told my guys on the first month in 2017 when I did the math and you saw the p and l from a three p, the whole bit fba, you're like, yeah, no, this isn't gonna work. Eventually you're gonna have to have your own, you know, your own warehouse and a forklift, and it's a muscle, right? It's not fun, but Sure. Makes sense. So, uh, but so, so you're the, so the challenge of having to, you know, even with one P, you're gonna have to do stickering, but there are programs that they have, you know, where you pay a a. You pay them. Yeah. So. It makes, you know, but, you know, but they, to do like a full pallet, you know, you could wrap a whole pallet. You don't have to sticker every box in the pallet. I mean, the, the, the cost savings there alone. In any event, the, the economics of moving to one p, um, are tremendous. Like we, we can see a huge potential upside in, in unit velocity. Um, we think that we can make a lot more money than we ever did, you know, before. Um, uh, but. But aren't, but aren't they gonna want a, a wholesale price and then other charges and fees from you? That's not gonna. Great. Great point. And those are the major, uh, gotchas that would, would want us to sort of stick around with three P is long as we possibly can, because for two reasons. One, um, as you say operationally, uh, and this is a critical point, um, in one p, if you don't, if, if you're not turning around your product, particularly with wholesale one P, you're se sending your product after they give you appeal, you got 48 hours to turn that around. And if you're late, or if they're damages, you get a whole bunch of chargebacks, it messes up your p and l, you don't think you're getting the money. And then after a year, they're gonna come back to you and hit you up with higher allowance requirements for returns and freight and all these other things. And then you're still at their mercy and issuing a purchase order. And so if you've got issues with your own supply chain and getting product in and keeping certain s skews in stock, and, you know, and you're not flushing working capitals, you don't have an unlimited amount of working capital to deploy to make sure that you're not out of stock. Right? And if you don't have that product and it messes with their algorithm, and then they don't send you the right po and it's just like, you know, you don't have any of that with three p, it's like you manage your own forecasting supply chain, you send it in, but it also is a major drain on working capital because it's taking, you know, a hundred days from, to get from the point of manufacturing to get it available for sale. It's a huge cash. Sale. I mean, I, I mean we, well, it doesn't matter whether they buy it or you ship it up there, just getting the product to Amazon eats lots of weeks. Yes. And that to me, you know, and so, so we're, that's the, um, that's the, the challenge that we're up against where you sort of, you look at the efficiency, the inherent efficiency of Amazon's logistics network and getting your product into the right place at the right time, ready for sale to the consumer. Uh, and don't forget, subscribe and save and the benefits of, of. Yeah, no. So talk, talk about that. Because when we talked about it, like, you know, most people when they, I shouldn't say most people, it depends on the type of product, but when you sell on Amazon, you don't really own the customer, but your brand, um, on Amazon, it, it, it's a great promotion for your brand. So it really doesn't matter if they buy it from Amazon, as long as they're buying your brand, they could buy it anywhere. I mean, so Amazon has a huge halo effect for you, doesn't it? It does. It's also vice versa. So, um, you know, we really are truly omnichannel, and so we've seen the growth in our business piggyback each other. Um, so, you know, prior to Covid, um, we, we started to, we started with e-comm cuz we didn't have retail. And suddenly you're in retail, and then the retail starts to lead into sales online, and then Covid happens, and then retail falls apart and online goes crazy. Yeah. And then, and then online still is going crazy while retail is now, you know, going crazy and retail going crazy is now buffeting, uh, e-com and it's sort of this virtuous cycle. Uh, but yes, I mean, being on Amazon, you know, is, is extremely important for the brand. It is. And the beauty, beauty of having a product that people continue to use over and over again where, you know, you sell a computer and you gotta wait the next couple of years, maybe they'll buy one or they'll buy an accessory, but it's different. People are buying your stuff every day, every week, every month, whatever their schedule is. So, so how does that work with the, the subscriptions? Uh, I mean, that, that's pretty interesting. Is that, is that economic? Does that work for you guys? Oh, yeah, I mean, subscribe and save is, uh, is hugely beneficial both on Amazon and on our website. You know, we're very robust and the reality is that the lifetime value of a customer, um, who subscribes is significantly higher and that's with a big discount. That's even if you say 50% off your first subscription, you know, you get 'em in and then there's a habit, and then they just, it just keeps on coming. Now you still have, uh, to contend with, uh, uh, do you have a good product? Is it is, does it taste good? You know, is it something that repeats? So part of our initial success on Amazon was really related to having a quick understanding as to what the repeat rate of our products were. And you know, as you say, these aren't our customers. And, uh, so how do you do that? Well, there's a trick. Uh, you know, the, uh, what you do get from Amazon is a, is a hash email address. Mm-hmm.<affirmative>, okay, well, that hash email address, uh, if, if, if a, if you're Adam Schaffer and you've got your login to Amazon Prime, uh, and, and they give me your hash email address when you buy Owen, when you come back a month later or two months later and use your login, I'm getting the same hash email. So, so, so you're able to match, so you. Yeah, I can do identity. So. You can't talk to me, but you can actually see how many people are coming back that's can. Do an, I can do an RFM analysis here, recency, frequency, monetary, I can understand what's the repeat rate of people who buy this flavor as their first flavor. So when we started to see that, we, we, we could see, oh, first of all, we have a very high repeat rate. I mean, well over 50% of our customers repeat, which is, you know, crazy, crazy high. Then the next. Have a good. Product. Yeah, it's a great product. And that's the key, right? So you got, if you don't have a good product, you know, go, go away. In fact, we would identify through reviews and through this analysis that, hey, we got a flavor here and tropical and matcha powder that nobody cared for. The repeat rate was poor, and it was a kind of a canary in the coal mine for the entire business to say, Hey, let's, let's kill this thing. Because, you know, it's not good for the brand. It doesn't have, it's not gonna have the same profitability over the long haul. You guys stick with your winners. So, you know, even though things are sort of hidden in the Amazon world, you can glean good information now with one P you lose that string altogether. So that's, you know, I mean, I think at this point, we understand the, your. Business, if. You're the customer, and the number of repeats per repeater and all the good stuff that tells you that you've got a winner. Uh, uh, so, you know, again, there's a, a huge number of positives associated that can be associated with going to one P. But what gives us that, you know, trepidation, number one is operational. Can you deliver without flooding up so that you're gonna get all these chargebacks and it's not worth your while. Um, revenue as you say, um, will be, uh, reduced relative to what your investors expect because, uh, you know, it's gonna be wholesale price now. So my top line is gonna be reduced per unit, presumably the question's gonna be the elasticity. And will I have a big, you know, uptick in unit velocity and that we believe we will. Uh, and it's gonna be a huge, huge win for us. And so that's kind of where, you know, where our head's at. And now it's gonna be a question of this negotiation, which <laugh>, you know, here I'm, you know, I don't expect Amazon. Maybe they're listening, but, uh, it doesn't matter. It's like, it's, uh, it's a long negotiation. Yeah, no, that's what it, and we see that every, what, what we're seeing is that the brands we talk to and we work with, they, you know, they're selling one P, but they're getting You talked about this annual review, and they, they want more here, lower here, and it's hard because, you know, the margin's gotta come somewhere and then, then there's still the promotion. So, so let's, let's take a step back for a second. You started at zero. So what was your strategy? How did you go about getting the sales and reviews? Did you spend a lot of money on promotion and advertising or, or not? What, you know, what was your thought process? Yeah, I mean, for sure, um, you know, advertising was a key component of it, but before you even get to advertising, like I said, you gotta have a good product. Know that the products that you have are good. The listings have to be right. All, all of your presentation, the imagery, all of those components have to be, you know, in line and correct. And then, um, you know, not promotions, like lightning deals and stuff like that. We didn't do, you know, in the beginning anything like that. It was more about steady a m s, um, not even getting to any of the display advertising in the early days at all. Um, and just, you know, focusing on bread and butter. And then with regard to reviews, a very critical component. And, you know, interesting little story too. Um, it's not the first time I've seen it, but like in the very early days, of course, you know, your goal is you gotta get reviews. They have to be positive because you're gonna get a negative review. So if you only have 10 reviews and, and then suddenly, you know, two of 'em are negative, you gotta really, you know, bad score. You're gonna, you really need to have a four and a half stars, you know, uh, to succeed in this game in any game. And so you, you know, what you really need is a big, uh, uh, denominator. Uh, so you want to get as many reviews as possible. And so there's always this tendency, um, for people to cheat. And, um, and I had, uh, within a week, uh, of starting the business, um, a, uh, we had a shutdown, you know, Amazon shut us down completely is said for violating the reviews, you know, uh, you know, policy, blah, blah, blah. Well, it must have been that somebody within the network of live own.com, some, you know, idiot, um, who, you know, decided to like leave a positive review for ourself. Oh, so one of your own guys maybe did, yeah. One of our own guys in the network. And it's like, and they. Shut and they, they, they, they tracked it back to the IP or something. Instantly, right? And they shut the thing down. And I'm like, oh, and I've actually seen this before, so this isn't the first time I've, I've seen it. And of course, you know, you can get it turned around, and we did. But I had to emphasize to the whole company, you know, don't be idiots that, you know, so you can't, you can't cheat, you can't, you know, they take this stuff seriously, they're gonna shut you down completely. And he's like, what's the point? But, you know, so I guess if you're gonna cheat, great experience, you better have, uh, a friend of a friend of a friend and stay as far away from your network as possible. But don't. We, we, we've seen some of the biggest players on Amazon get kicked off of that. I mean, I'm still, you know, there, there's still great scammers out there that not how to play the game, but it's not worth it at all. I mean, they shut down billion dollar businesses. See, I was always worried about that. And, and, um, I have a, one of my best friends, uh, had been at Amazon for 20 years, and he was a top guy, like a vice president, you know, top, top guy. And whenever I go into Seattle, I'd see him and I'd complain you how things going. I'd complain about this or that all for, you know, Amazon, you know, they, they, I, I got a, I got three trucks. I can't get out. I can't get, you know, he is just sitting there in the, in the yard three weeks. They won't release the po. I don't know what to do. He goes, why don't you ever, why don't you ever call me? I could help, I could help out. And I'm like, uh, Uhuh. No, no, no, no. It's like, I'm not, I'm not gonna call you for that. I mean, that may cost us a lot of money, right? But it's, it's for the moment when I've got a real business and then they shut me down. Mm-hmm. <affirmative>, that's, you know, in case of emergency break glass, you know, that's when I'm gonna come to you. I'm not gonna come to you. For anything. Yeah, no. So, I mean, it's interesting that he has that much power because it seems at Amazon, they're so compartmentalized. Uh, nobody can get into anybody else's silo, but, uh, so keep that friend that's a good friend to have. Well. He's gone now, so it's like, you know, oh, no. You know, but, uh, but he's the, he, he is the CMO of Chewy, so if you have a problem with them, I can point the other right direction so. That you're not selling Owen on Chewy. Right. That would be. Interesting. No, good idea though. It's great for the, the dogs. I'm sure they'd love it. So <laugh>. So, so now, so now, um, go, go. Let's, let's stay with the advertising. So you were just buying basically keywords, you know, um, and investing. But like what percent of sales at the beginning, were you spending a hundred percent of sales to try and boost your, uh, velocity or were, you know, what's your formula? Yeah, no, I mean, it wasn't, it was high at, at first, I don't think it was that high. Um, but in the early days, you know, you're gonna have to, you're gonna have to do that, obviously, to get some, to get some traction. But, you know, those percentages come down quickly when, when you have a product where the, where the people repeat, coming back to, as we say, subscribing, save, but you don't get right off the bat. Mm-hmm.<affirmative> takes time. And then eventually, you know, you get that subscribing save, you just get a lot more, you know, all those sales hit you first thing in the morning, one in the morning, you know, you already got half your business done, you know, for the rest. Of. The day. You don't need, you don't, so the advertising, and then with the repeat rate, even without subscribing, you know, because it's just a heavy repeat kind of a business. Um, it's a consumable business. It's a lifestyle. It really, um, it sort of feeds itself. And so naturally the, um, the advertising spend is gonna, is gonna come down. And, uh, and then of course, you know, it's sort of, it keeps on, there's just goodness that comes from there because your, your ranking then goes up and, you know, all the tricks of the trade with, uh, the search business. But, you know, it's, um, it, it definitely is doable. Definitely. And, and were you doing the advertising and the content, or were you farming it out to agencies or something like that? I did both. And we have done both. And we've gone back and forth depending on <laugh>, you know, resource availability or you know, whether we like the person in-house, you know, we didn't like the person in house that was doing it. Oh, these guys can do it. They're better over there. Oh, this guy's a fraud and there's a lot of 'em, <laugh>, you know, it's a tough business, right? I mean, I don't wanna begrudge anybody trying to get into the business, but, you know, there are a lot of people out there that, that, you know, are hucksters and, and don't really know what they're doing. So generally we try and keep things, uh, in-house, but, but over the last number of years recently, we're starting to explore, you know, really well regarded people in the industry who can do this stuff, you know, very specialized in, uh, in the advertising. We've even gone to the machine stuff, you know? Mm-hmm. Some of those systems that, that kind of do auto bidding and like that, they're not that much different than people. So, you know, <laugh>, if you got the right, you know, the right algorithm put in. There. Ha have you, have you been adding new ASINs? Um, you know, not in, in this business, not too much. Um, you know, some, some new flavors and stuff like that, just as we grow. So, um, you know, we've got like maybe 2025 ASINs. What I do is sort of create multiples, you know, new variety packs, new bulk packs, take a 12 turn in 24 or 36, those little discount on the upsell, you know, ways for people to, you know, get a little discount for spending more, you know, in this business, if you can get a higher average price, then, you know, with the freight cost being as high as it is, you potentially can get a better return. So, you know, uh, interestingly in in the website business with M mcf, you get a much better deal on that, uh, than you do with, uh, Amazon. So with Amazon, if you sell, say, a 36 pack, which for us is just three 12 packs, you know, our product comes out of the manufacturer's a 12 pack. You don't want to touch it after that. But, you know, on my website I can sell a 36 pack, but it's really, I'm just telling Amazon, M mcf send three. Three to this place, right? But Amazon's pricing, MCF pricing, if you know it has a discount when you have the second, the third, the fourth, the fifth unit. And so, you know, the cost of a 12 pack from M MCF ends up being inverted much lower on. I didn't realize that. That's awesome. Mcf than it would be on, on Amazon. Cuz Amazon fba, they're gonna just charge you the same f b a fee for the, for each of the, of those units if you did that. So, uh, just, you know, for. What's, yeah, no, that's, I didn't realize, I mean, what a big a, a, a big help for, um, you know, the, the direct business. I mean, just huge. What, um, so you mentioned the de-listing or the, you know, and, and buy box suppression, but what, what's been like, what's been some of the biggest, I'm not gonna say obstacles cause that would be negative, but I'm gonna say challenges with Amazon, um, at the Owen um, company. Um, yeah, I mean, I think, I think the biggest challenges I, I was, I was alluding to just being as the size we are, the volume and, uh, and, and the complexity of getting that much product, um, into Amazon, like ef efficiently to reduce the days on hand, um, is a critical factor because it's killing us. It's choking us in terms of our working capital. I mean, it's absolutely killing us. And any, I would imagine anybody of any size trying to go through this process is, is doing the same thing. Like in an ideal world, I wanna see my product coming outta the manufacturer. You know, we produce, it gets on a truck, you know, it's, to me it's hot potato that'll get it into a place where it can be converted to. Default, right? Right. Quickly as as possible. But the Amazon, you know, the, so the beauty and the benefit of the Amazon network, uh, you get all of the cost benefits, uh, there, but you lose it on the prep and trying to get the product there and then just the cost that it takes. And also, you know, um, so there's a lot of complexity in, in managing freight routes and, um, three pls, the scale of it and how do I scale up this thing and, and, and deal with these guys having problems with their labor, right? To put a sticker, actually two stickers, and in some cases three, cuz you got a U P C, you got a sticker over it with an FN skew, and then you gotta have a carton label, and then, you know, it's a nightmare when you think about it. And more often than not, I got three pls, um, you know, mislabeling, you're paying these cards. Oh, I know. And, you know, so quality control and, you know, so it's, it's exacerbated. It's, it's, uh, it's um, uh, you know, it's, it keeps you up at night trying to manage that level of scale. And you do wonder is, yeah, like, is, is, is it even at some point, like it's, it's not scalable at all. Like Amazon's seller central three, three P concept, F b A, I'm not so sure it works, you know, actually. Over a certain size. Possible. Now we did it at, at Mac Mall, you know, we did it. I, you know, we, I started an Amazon business there. We were doing 50 million in Apple computers. So it's doable, but maybe, you know, uh, much. Higher asp though, you know, lot less. And we were selling it and we were shipping it ourselves. Right? Because we didn't do fba, we. Were using FDA and you weren't relying on, on, you know, we were, we were selling it because it was Apple and we could sell it for cheaper than Amazon. We were authorized, you know, and that was it. That was the only reason we, we did Well, so you didn't need Prime. In fact, I don't recall, you know? No. We, we shipped it all BM and it was straight ups. Exactly. So it's, you know, so I think that's the, you know, I used to have another one of our other businesses when I started with Owen, we had a sister company, uh, from the ground up, which is the cauliflower snacks. Uh, we sold that business, business, uh, you know, last year. It's just doing tremendously well, they just bought, um, pop chips, uh, and so they're creating like a chip, uh, conglomerate or whatever, and I helped them, you know, set up their e-commerce business. But, you know, it just doesn't, it doesn't work the same way when you've got, when you've got snacks that you're selling in six bags of, uh, of a box, and it's, you know, half the price of a, of what we're selling with Owen, and you still got the freight costs, and it's just like the economics and the, you know, it just doesn't work. Uh, does, does Amazon limit, you know, we talk about fba, do they limit any, your space? I mean, have they been shrinking it, or, or is that Well. Uh, yeah, they limited it in the sense that they, you know, seasonally, of course, they put caps, uh, which are very, very damaging. And there are caps. Absolutely. And you are constantly having to, you know, bust those caps open. And, and we do have to manage our business. If it was, if it was, if it was up to us, we'd pay the extra storage and get the product into Amazon. Um, because of these sort of roadblocks and in getting product in, and the, and the risk of stock out and all that. Stuff. Ha, have you capped out on any of the big skews? Oh, yeah, yeah. It happens all the time. Yeah. Yeah. I mean, and sometimes it'll happen, you know, some of the time it, it, it, it happened a lot more during Covid than we've seen recently. But I'll tell you one thing that what they do, it is, you know, it's challenging, is that like, you could have like 5,000 units of something, 10,000 units. And so you think you've got the, and it's there, they've got the product, but then they, then they move it. Oh. Yeah. To, to, in a, in a, in a status called FC Transfer. So he is like, mm-hmm.<affirmative>, I got 10,000 units and I got 10,000 units in FC transfer. So it's not like available anywhere. You can't ship it. Anywhere, right? But it's there. You're paying for it, you own it, but you can't tell me. Yeah. I mean, it's like, and then I'm trying, and then I need, and don't you hate that, sell it. It's the, it's, you know, and not only that, I've had 'em, I've had them lose it 5,000 units and say, okay, that's it. And like, well, wait a minute, you know, what happens? So it's, it's, uh, you're playing with fire when you talk about, you know, in doing business with Amazon, it is something new every day. And, uh, and you just, uh, I think the lesson is that your own creativity, your perseverance, uh, is required here because you're never gonna see the same, well, I'm not gonna say that you will say the same things again, but the variety of challenges that can hit you, you know, have to keep you on your toes at all times. And, you know, my lesson to myself, which I'm learning here, is that I have to be anticipating where my growth, you know, ends me up next year and the year after. And it's hard enough to live day to day with these guys, but I gotta think about what life is gonna be like, you know, in a couple years. You know? And, and I'm, you know, I'm the same. Like I, I, I love 'em, but you know, you struggle with them, but at the same time, what an incredible platform. I mean, can you imagine that you, you're talking about 30 plus million or whatever you're doing and growing, and that's because of them, you know, because of you. But because they have that platform and those visitors and those customers, and make it easy, and they're helping you with you direct to consumer business, so it's like you love 'em and you hate'em, right? It's like, you know, I, I, I don't wanna disparage them because they are the guys we live off of. Without them, we don't have the platform. But you gotta learn how to play the game, and you have to learn how to navigate this business. It's not easy. I, I would never bite the hands of, I mean, I would, but, uh.<Laugh>, you know. But, uh, but we love 'em because we're making a career out of it. And, and a good one too. I mean, this is real business. And you know, I guess in the olden days, it was, is a different, different approach. You know, it's, it's selling to Walmart, sell, you know, sending out catalogs. We did all that. But this is, this is the. Well, and selling to Walmart and the, and the big box guys has its own challenges too. I mean, they would find you and they would have all kinds of issues, then they'd return it all, you know? That's right. So, you know, different, similar situation that you're in now, just a little bit different. Um, and, and so do you think you could, I mean, that was, you said what year, 2017? Like, can you, can you think you could do it again with another brand from zero? Oh. Yeah. Is it more difficult? I mean, uh, oh, you mean where we are today than where we were in 2017? No, but can you start a new brand today, like you did Owen in 2017 and have it flourish? Oh yeah, for sure. Absolutely. And I intend to.<Laugh> that's encouraging for everybody. I mean, so that, that, that's, that to me is, um, because you hear, oh, it's too crowded, it's not enough space, it's so competitive. But you think you could always carve out an itch and, you know, do something great on Amazon. It's never too late. A as we were saying, Amazon is a terrific tool. It's a great network. It's got, it's the biggest marketplace in the world. It's the global, a agora. It's where people come to shop to research, um, to do their business. So if you're not there, you know, you're not, you're, you're, you're not there. But, but it, it doesn't make up for the fact that, you know, people are there to buy, uh, a, a quality product, you know? And, uh, if you don't have it, uh, you don't have the repeat, you don't have the right price, and you don't have the right operational approach to getting the product to Amazon so that they can get it to you, doesn't mean you're gonna succeed. Right. So the, the real, uh, value, the, what made this job easy for me was when, you know, at the very beginning we knew that if you give this product to kids and they, Hey, put this on your cereal, do you like it? And they did, did, we're like, all right, well, you know, yeah. You. Got sound good. Does it taste good? Yeah. If, you know, just because you got a great idea, just because you know, doesn't mean that it, even if it does sell, are people gonna buy it again? You know, what's the price or what's the economics of it? So to really make all of these pieces work in harmony, to be a knockout, it really stems from the original idea, which is, you know, we have, we actually have something which we didn't really talk about much, but is a novel, uh, you know, approach to health and nutrition and in, in, in, in the world, you know, plant-based proteins at free of the top allergens, people who were dairy sensitive, gluten free, free of soy, free of all that. Cuz there's, everybody's got something, everybody that you know, is, you know, needs, uh, needs either to have something or to, has have less of something. And our product is made with good, what we say are, uh, pronounceable ingredients. It's not made a bunch of junk. Unlike what, you know, what is, are the big boys in the market and that's why we're growing so fast. And, uh, and it's, you know, it's really taken the, taken the market by storm. And so those, it's not Amazon that, that did that. Yeah, no, that's, I agree. Super important. You know, you're using their platform, being have a great product. And, and after we spoke, I mean, I didn't know about the product because I wasn't focused on it and I went to, um, uh, one of the big grocers and I bought one and it was great. You know, uh, I'm not allowed to buy from Amazon anymore. My credit card's been cut off, so my wife doesn't let me do that, but I, so I went to the, um, Publix locally and picked one hundreds. Yeah. So <laugh>, so as we get to the end, because, uh, we could talk forever, I could, I mean, I could talk to you forever about this stuff, but what, what, what, what words of wisdom, you talked about yourself, but what would you, um, impart to listeners that are either brands existing or just starting out, you know, if not to put you on the spot, but you know, what's good advice here for the team? Um, well, you had me speechless there. Good advice. Do it.<Laugh>. Good, good advice. Don't, yeah, don't, don't get in my own space, but outside of that.<Laugh>, right, exactly. Well, if you get in my own space uh, you know, good luck. Uh, but, uh, no, I think, I think the key, you know, my advice is, is be be honest. Uh, you know, at all times. Be honest with yourself, uh, and with your partners and with, uh, you know, with respect to every aspect of your business. Sometimes that means that, you know, do you have the right stuff? You have to question yourself all the time. Is the product gonna be, uh, or the, my approach gonna gonna work? Um, and, um, so always question that because, um, it'll make you better for it. Great. And if somebody wants to learn more about Owen, you had mentioned earlier, but you could say it again. What's, what's the best way to go find out more about Owen? Well, of course, you know, it's an Amazon show, so you can type in O W Y N on Amazon, or you go to live Owen, l i v e o w y n.com. Awesome. Well, Rob, I really, really appreciate you. I'm, I'm, I'm super impressed. Um, I want to be you. I, I mean, you have a great business, so, uh, let's keep it going and, um, when you sell, let's talk. That's great. Okay. <laugh>, sounds great, Adam. Thank. You. Thanks again. All right.