Licensed products have a headstart in the market in that they're based on familiar properties with established fan bases.
But getting a license to legally create and sell them yourself isn't so simple, especially where big-name brands are involved.
In this episode of Shopify Masters, you’ll learn from Matthew Hoffman, President of Uncanny Brands, and an entrepreneur who has built 3 successful businesses that sell consumer products based on Marvel superheroes, NBA players, and other pop culture icons.
Find out what he's learned from 22 years working in the licensing space.
I was at a baseball game in 2010. I was looking at one of the players, and I said, “If that player was a Muppet, what would he look like?” That’s how the idea of the business started.
Tune in to learn
- The pros and cons of building a business strictly selling licensed products
- How to divide your time, attention and cash when starting multiple businesses
- What makes a licensor want to grant you a license to use their brand
Listen to the podcast below (or download it for later):
- Store: Uncanny Brands, Bleachers Creatures, Phenom Gallery
- Social Profiles: Facebook, Twitter Instagram
- Recommendations: Quickbooks, MailChimp (Shopify app), Coupon Pop (Shopify app), Order Limits (Shopify app)
Felix: Today, we’re joined by Matthew Hoffman from Uncanny Brands. Uncanny Brands sells pop culture consumer products. It was started in 2010 and based Blue Bell, Pennsylvania. Welcome, Matthew.
Matthew: How you doing?
Felix: Good, good. Yeah, we were just talking a little bit before we got going about how Uncanny Brands was started in 2010, but it’s kind of a combination of the different businesses that you have. Can you get into a little bit of those details?
Matthew: Yeah, so there were two different companies. One was Bleacher Creatures, was started, the idea started in 2010. My original investor and partner also owned a company called Pangea Brands, which he ran with a different group, and starting this year officially, we brought the two businesses together, rebranded it as Uncanny Brands. The idea was to create multiple pop culture companies or brands underneath our umbrella, leverage our backend, whether it’s accounting, creative, design, all under one business. It’s working really well.
Felix: Got it. It started with uncannybrands.com for you. What was the, how did you guys, how did you come up with the idea for a business like this?
Matthew: Well, I’ve been in the pop culture licensing business, as I like to call it, for about 22 years. I started off as a buyer. I worked for a catalog company that transformed into a eCommerce company, and then I was part of a startup of a company that’s now known as Fanatics, and we dealt with different licenses with sports leagues. Then I got into manufacturing after that. I worked for a company called Majestic Athletic that outfits Major League Baseball, and I worked for other people, learning from great entrepreneurs how they do this, and I was inspired by my children, honestly, for Bleacher Creatures. I was at a baseball game. I would travel to a lot of stadiums. I’d want to bring great stuff back for my kids, and there weren’t great toys available, so I was at a baseball game in 2010. I was looking at one of the players, and I said, “If that player was a Muppet, what would he look like?” That’s how the idea of the business started.
Felix: Got it, so you had this idea, it came from seeing, wondering why there weren’t better toys that you could get from like a baseball game or something like that. What was the first steps that you took towards actually turning the idea into a reality? How did you go down the road of manufacturing a product like this?
Matthew: Luckily, I came up with the idea in the second inning, so I was with some friends, and with our smartphones, we started looking up what the size of the plush business is in the United States, what the market opportunity was, was there anybody doing it? Literally going to that baseball game, I was researching it, and by the end of the game, I got in my car, started driving, and I was giving myself notes on what I was thinking about, and the next day, I found a designer. We started sketching out some ideas, and I went looking for a factory and started that way.
Felix: Got it, so you have been licensing business for a long time. Your business is built on licensing. Why might a business owner like going down the same route that you went down with licensing? Like what kind of advantages have you found with this approach?
Matthew: Yeah. Some of the good advantages to it, number one, it opens doors. You have association with major brands, whether it’s going to be Star Wars with Disney or Marvel, whether it’s the NFL or NBA. If you have a partnership, there’s established business that people are buying that type of product. See, there’s already a consumer base that knows it, and it opens the door. As my old boss used to say when people used to talk about marketing, when you pay those leagues, that’s sort of the marketing in itself, because you’re using recognizable brands to build your business. It works really well. There are a lot of challenges to being in the license business. It’s not easy at all. You’re also a steward for those people’s brands. It’s a big responsibility, but it’s a good way to turbocharge a business if you have a unique idea, because it opens doors right off the bat.
Felix: You said that it’s a big responsibility because you are representing these brands. What kind of restrictions, what kind of, what do you expect to uphold if you are licensing the kind of big brands that you are working with?
Matthew: Well, first off, it’s a good brand. There’s going to be a financial commitment right off the bat that they’re going to expect for having that type of partnership. Number two, it’s a collaborative effort, and we’re lucky we have really good, licensed partners that we work with and create together, so you have to be in an environment where you’re going to be collaborative and understand that these are your partners. The third part is, if it’s a sports league, they’re representing each team, each owner. These are all billionaires, basically, that respect their brand a certain way, so there are restrictions. You have to go through a lengthy licensing process, which can create delays in regards to how do you get the market, so those are all things you have to factor in through your development cycle and also understanding what you can or can’t do with different products.
Felix: Can anyone start going down this licensing process, or do you have to go through an approval process? If someone today wants to, has an idea for a product and they want to partner with a license, partner with a company to get a license from them, what are the steps involved?
Matthew: Well, I think the first thing you have to ask someone is, “Is that really the game-changer for you?” If you have a product idea, is having a mark or a license going to really be the game-changer or not? That will be the first part. The second part is, and again, I had experience, so I had relationships with all these licensors, but you have to put a business plan together, and you have to show that why this is a unique opportunity for those licensors, why is it something that somebody else is not already doing, because if you went to the NFL and said, “I want to start doing coffee mugs,” well, they have partners that already do that, so you have to have a unique opportunity for them.
Then, again, financially, you have to be ready to spend significant money just to sign up for that, so it’s a big undertaking, so I would never tell anybody you can’t do it, because I would never say that about anything, but it’s definitely challenging, and there’s a lot of responsibility involved before you pick those steps.
Felix: You mentioned that, is it a, you want to ask yourself, is it a game-changer for you? Do you have some examples that you’ve seen where it wasn’t a good fit, like it’s not the, going down the route of licensing was not the right approach for a business?
Matthew: Oh, yeah. I get approached all the time, people say, “Oh, we want you to take our product and make a licensed product.” A lot of times, I’ll say no to them. Most times, I do. We also have plenty of people that say, “Hey, I’d like to be in the license business,” because even though it opens doors, and for me, I was already working with buyers at arenas, and stadiums, and sporting good retailers, and fan shops, so to launch my business, I already knew those contacts. You still have to create all of that distribution, so now, you’re under the gun. Right?
You do a license with, let’s say Shopify licensing. Right? You get a license with Shopify, you’re paying them a big check. Now, you’re under the clock that you have to produce product, get sales to earn out of that money that you paid. That’s a lot of pressure, and it takes years and years to build up your business, just like any other business, so if you’re signing up for a license for a brand new company, and you’re starting from scratch, it puts a lot of pressure on you to generate sales quickly, because it’s just like starting up any other business. Just because you have that partnership, it might open up doors, but you still have to ramp up.
Felix: Do you recommend that businesses start without the license and try to establish a business first and then add that in later as like the secret sauce at a later point?
Matthew: I do. I think you want a good proof of concept of what you’re doing to see if it will sell through, if it’s unique, and then as you grow that, find out, is there a license partnership that makes sense for you? For most of these licensors, there’s only a few hundreds of them worldwide, so you’re only talking about a couple hundred companies that exist that have partnerships with these licensors, so it’s not a big size, so it’s hard to get in, because, again, they’re not looking for the third or fourth person to do the same thing. They’re looking for unique growth opportunities for their brands.
Felix: Okay, so let’s say you have a good idea that no one else is doing for this licensor. What else do they want to see that you have established before they trust to work with you?
Matthew: Well, they want to make sure the product is good, that it is a new opportunity, that you have the financial infrastructure, the business infrastructure to support a business, to grow, that you have good accounting, because you have to report royalties that you … Not only do you have to pay money, you have to pay a lot of money for insurance, right, because now you’re using their brands, and if anything happens with your company, they need to be covered for insurance as well, so that’s a big cost as well. There are a lot of check marks on there before they’ll consider working with you.
Felix: Is there like an audit process involved where they come in and take a look at how your business is run?
Matthew: They can. It can happen.
Felix: What is the product development process for you when you sit down and want to create a new product, new product line, or new products on the same line? Like, well, who’s involved, and what’s the process?
Matthew: We have three brands right now. We’re actually working towards 2019 on a fourth brand, so the brand that we’re looking to launch next year would be a good example, because I’m doing it right now. We’re looking, we see a market opportunity in regards to something that’s unique, so that was step number one. Once I found that, I reached out to my licensed partners and said, “Listen, we think this is a business opportunity, put a business plan together. Here’s why,” and then collaborated with them. “Does this work? What do you think we can do here? Are there restrictions on your side?” Then once we do that, now, we’re working on developing product with our designers, work finding factories and manufacturers that can make this product, and then starting the sample and then going back to our licensors and saying, “Here’s what we have in mind.” It’s a back and forth. It’s a partnership. “Hey, this works. Hey, you should do this. We need you to consider these things.”
Felix: Yeah. What’s the timeline that this is going over so far?
Matthew: I think a safe timeline to launch business like this is probably 2 months. We’re looking to launch this in about 12 months, and when I say, “Launch,” that we expect to be in market by this time next year. That means fast, or rewind eight months, that we have to be ready to show customers, wholesalers, probably by November of this year what the product offering is so they can buy into it, which meant, really, we came up with the idea and start working on it November, December, a year ago. That’s exactly how it lined up. It’s about a 24-month cycle for this one, and I think that that’s a pretty normal way to look at it.
Felix: Got it, so you’re saying that you want to conservatively say 24 months, but you guys can, you feel like you can do it, is in half the time. What about your setup, or what about your business model allows you to do it in half the time?
Matthew: Well, it’s not half the time. Remember, we’re going to launch it in July of 2019, and we started working on it November 2017, so it’s a little less than two years. We’re able to fast-track it a little bit, because we have the infrastructure in place in regards to design, talking to customers on our sales channel. We have the relationship with the licensors, so we have all the assets we need, so that did cut a little time back, but it’s still 18, 19 months it’s going to take us to get this going.
Felix: You have a lot of experience now launching new brands. This sounds like the fourth one that you’re launching. Why spin up, or why create new brands rather than, let’s say, doubling down, focusing on just one or two?
Matthew: Yeah, that’s a great question. There are a couple reasons for it. Number one, we see other companies in the license space that are sort of jack of all trades, masters of none, so they’re a company, and they make everything from sweaters, to bobblehead dolls, to fidget spinners, to sandals. At least from where I stand, number one, you’re not really showing value that you understand the category you’re in. You’re sort of just in the license space creating whatever product is hot. That’s number one. We just feel like we want to be the best at what we do. We don’t need to be the cheapest. We just want to be the best, and the best way to do that is to really be good in our categories and build a brand that stands for something in that category, so Bleacher Creatures, we really believe, and I stand behind, that we make the best plush licensed product in the world.
I feel, when I talk to licensors, I can show what our competitors do, because most of our competitors, they are in 20 different toy categories, and plush might be like their 11th priority, so Bleacher Creatures stands for good plush. For Uncanny Brand Appliances, it’s the same thing, like we just came out with the Millennium Falcon waffle maker. It’s the coolest waffle maker in the world. It is. It’s just, it kicks butt if you’re a Star Wars fan. You’re going to love it. That’s what we stand for for that brand. Now, if we were just Uncanny Brands, and we did toys and appliances and artwork, we’re a hodgepodge, and what does that really stand for? We want to build brands so in a category we’re a category leader instead of being one brand that’s selling to everybody. It’s a unique approach for us.
Felix: How do you set up these businesses, then, so that it does stay focused? Because, like you’re saying, you don’t want to become a company that just has a ton of different products, and you’re just slapping labels on them. You want to focus on a few core products for each of these different brands that you’re creating. How do you make sure that each company is focused just on their particular task, their particular products that they’re working on, and does it have this kind of bleed-over where you’re just kind of diluting the entire business?
Matthew: Yeah, and let me answer one thing before that, and I’ll answer that in regards to why we do it this way. I think whenever you set a business up, and this is true for all your entrepreneurs that are on Shopify, you’re hoping to hit a home run, but a lot of times, they’re singles. Right? I mean, their business just [inaudible 00:15:17] go, and you’re slowly growing. That’s pretty normal. That’s a normal lifecycle. The reason we’ve set up multiple ones is, they might all be singles, but they all add up the runs in the baseball analogy, and if you’re in the game, you have a better shot of hitting a home run, so the more at-bats we create, the more runs we can score. That’s why we set it up this way.
Now, for us, when we became Uncanny Brands, we had two brands. I had an idea for a third one, and basically, our mission is, every two years, to launch a new category in a new brand, so we have another batter in the game, so we launched Phenom Gallery six months ago, nine months ago, and it’s been remarkable. It might turn out to be our best business of the bunch, the way it’s rolling, and we have people reselling our product for thousands of dollars on eBay. We want to take different shots and evolve, and it also keeps us fresh. On the creative side, on the sales side, we’re fresh to our licensors that we’re coming up with innovative, new ideas.
For customers that buy all licensed product, we’re coming out with something new, but then also, we learn things from these new businesses that help us with our other businesses, so it’s really a great ecosystem for us in regards to how we get better, how we get stronger and scaled up.
Felix: Yeah, so most out there probably don’t have as large of a business as that that you’re operating in, but they might also want to go down the same path of having a lot of batters in the game, like the way you’re saying. Get a lot of singles, get a lot of at-bats with different businesses that you’re launching. In their situation, and probably in yours too, the resources are not unlimited. How do you allocate, or how you decide to allocate the manpower, the focus, the capital when you are starting a new business whilst operating an existing one?
Matthew: Well, I have a great team of partners, and that was one of the reasons we combined these businesses, is so we have resources to figure things out. It’s really important that I have a strong CFO who supports on the financial side what we can or can’t do, and models it. He is sort of my conscience, where we go back and forth. We have our head of operations and sales that also looks at the bandwidth and infrastructure. My job, as president of the company, one of my big jobs is managing the path in regards to bandwidth, needs that we have, and it is a balancing act every day. What is the priority for our designed apartment in regards to what do they need to work on first?
Those things could shift on a daily basis, but we’re working far enough ahead now, and we know our business well enough, and the peaks and valleys of different business times, where we can shift things and make it work. We’ve been very lucky. I mean, I would say we are jam-packed in regards to work and projects that we have going on, but it’s manageable that we’re able to hit deadlines and service our customers.
Felix: What do you want to see with an existing business before you start a new one? How are you going to be comfortable, say, “Okay, I’m going to shift my focus and probably shift the company’s focus to a new brand that we’re launching?” What do you want to see in the existing business before you do that?
Matthew: Yeah, we’re unique, because we have two businesses that are seven years old that went through all the growing pains and trials and tribulations in regards to figuring out what the business was. We brought them together, and we had two companies where we can figure out the best practices, right, so we are able to take all that knowledge, build the third business, and now we’re starting to scale up, because we have that knowledge. I think if you are a first-time entrepreneur starting a first business, to me, and there are exceptions, I think four to five years is a healthy amount of time to really understand what you’re doing if you’re new to it.
Again, if you have experience in industry and you have some experience in regards to the cycles of marketing and sales and all the things you have to do, maybe you can accelerate that timeline, but if it’s new, if you have a new idea, a new business you’re launching it, I think it takes four to five years to really solidify your feet under it, get the best practices, and then figure out, “Okay, how do I replicate this? How do I do this again? What’s another way to expand?”
Felix: Got it. You sound like when you’re creating these businesses, I’m sure you have these systems in place and these processes in place. What are some of your favorite systems or processes that you have implemented in your businesses that let you sleep better at night?
Matthew: We still use QuickBooks, and I’m actually a big fan of QuickBooks. I think it works really well. We’re able to run good reports. It manages our order entry and financials. We’re looking at CRM systems right now. That will help. Skype is a great tool for us in regards to communicating with each other. Google Docs is a great template. These seem like basic things, but they’re really important. Google Docs, we’re able to share templates all the time. I know there are other technologies like Slack out there that do similar things. We’re able to do the same sort of things with those systems, and honestly, using Google Docs, using Skype, it’s free, or relatively free.
When it comes to direct-to-consumer sales, and I’m not just saying this because I’m on the podcast, Shopify does a great job. We’ve had experiences with other companies for web platforms, and they’re not as good as Shopify. I think Shopify’s come a long way in the last six, seven years, and I recommend it to everybody. It sounds like a advertisement, guys, but it’s not. It’s just true. Then there are apps within Shopify that work really well for us, but internally, Google Docs, Skype are actually two really valuable tools for you.
Felix: How big is the team today that works in all of these brands?
Matthew: For in-house people, we have 12 people.
Felix: I’m sure you’ve gone through the process of opening up roles at the company. How do you think through that? How do you think through what roles you need to fulfill in your business?
Matthew: It’s a great question. One of the things another entrepreneur told me at one point was, “Don’t hire someone unless you’re in pain, unless you deadly need to fill that role, or else you won’t function.” Basically, you want to stretch as far as you can go with the staff you have and then figure out, “Okay, do I have the right people in place?” Then if I do, we need to hire, so in a lot of cases, we outsource out, like we use a third-party fulfillment, because they specialize in fulfillment. That’s not something we specialize in. We use, in some cases, third-party manufacturers, because they specialize in what they do there. We have our in-house art designers, but we use third-party artists. For a lot of projects, we do. We use consultants on the marketing side. We use consultants on content, so we have our core group, and I think in this gig economy, it’s really healthy to bring in consultants or third parties to do the work until you get to the point that there is a value to pay full-time for someone to do that job.
Felix: What’s the onboarding process when you do bring on and you hire?
Matthew: It’s hard. We just brought someone in who we really like, and I told her it’s, usually takes a year, at least in this business, for a licensing, because it’s complex. It takes a year until you might have an idea of what you’re doing. We have a process in regards to manuals that we’ve put together for everything we do. We have a training schedule when we bring someone on, depending on what department they’re in, and we’ve been around enough to know, as we bring people into our operation customer service world, or our design world, building them up to figure out how they can do it. I think it’s really important to be organized, to have manuals, and also to have that redundancy, because if somebody gets sick, if somebody does leave, that you’re able to keep on going without missing a beat, because that happens.
Felix: How do you do that? How do you establish that kind of redundancy? Is it just training multiple people on the same task? What’s worked for you guys?
Matthew: Well, we all roll our sleeves up here, so everybody gets involved with different areas all the time, so our finance team will work on customer service. I’ll work on customer service if I need to during the holidays. For the design department, I’m involved with our product development director, so if he’s out, I can step in. In that design department, people work on different projects not only because we have redundancy in case somebody leaves, but it also keeps you fresh. I spent the whole morning today talking to customers and selling, and that’s great, and selling is probably the most important thing I do, but to do that all day every day, it becomes stale. You’re not using other parts of your brain, so I think for everybody in here, we try to do different tasks and different projects, number one, so we know what other people are doing, but number two, to keep ourselves fresh and understand how the whole business works.
Felix: What would you say is your most important day-to-day contribution? What would you wish that you could always only focus on?
Matthew: Oh, gosh. I mean, product development is the most fun I have. I mean, coming up with product ideas, collaborating with people, working with artists, it’s awesome. I mean, I love that, and if that was my full-time job, that would be unbelievable, and I’m having fun doing all this stuff, too. Sales is fun. It’s pressure-ridden. It’s like asking 100 girls out for a date and maybe one of them saying yes, and I’m not great with rejection.
I like to sell. I do like working with customers. At the same time, that’s a harder part of the job, but it’s probably where I spend the most amount of time, and then working with all the other departments, understanding how everything’s being impacted, looking at the financials. I mean, I sort of, I hit all those different things, and I’m having fun doing it, because it’s using different skills all day, every day.
Felix: Now, when you approach, when you come into the office in the morning or get up in the morning, how do you prioritize your to-do list? How do you know what is the most important thing that you have to get done that day?
Matthew: Yeah, so I, there are certain days of the week, I’m a creature of habit. I think it’s important for anybody, especially entrepreneurs, to build a routine or a habit, because at some point, if you keep the routine or the habit, it makes it easier to do things, because you know what to expect. On a weekly basis, I generally have, I know on Tuesday, Wednesday, Thursdays, those are good sales days, because on Monday, buyers are coming in, checking reports. They’re getting through all their emails. I don’t want to bother them. Fridays, a lot of people are sort of checking out by lunch. They don’t want to talk about sales before they take off for the weekend, so the middle of the week is like the meat of the sandwich, right?
That’s where I start. We have our weekly staff meeting, so during the week, I have times where I look at each part of our business to get prepared for that, and then I’ll flesh everything else out. I also reiterate to a lot of people I work with, “Don’t type out what you need to do. Use paper and a pencil and write down notes every day of what you’re doing, because you will retain it in your brain better. It keeps you better organized,” so I do that every day. I take notes what I have to do for the next day at the end of the prior day, and I come in the next morning, I don’t have to worry about it. I know exactly what I’m doing.
Felix: You mentioned one of the biggest parts of your job, most important parts, is the sales. You mentioned that it’s pressure-ridden, and you said that you’re not great with rejection. I think that resonates with a lot of listeners out there. What tips do you have for coping with that kind of pressure and the fear of rejection when it comes to sales?
Matthew: I think, look, you build up your hide over time, your skin. If you go into it with a positive attitude that whatever you’re selling is going to be positive, and that it’s going to be of benefit to the customer, you’re going to go to them, and you’re going to put your best foot forward and give the best presentation. I had a customer the other day that sold our product in the past, and we have great product for them. They have comparable product to us that is not as good, and they basically came back to us and said, “Your pricing’s too high.” I said, “We’re the same price as the stuff you’re selling now, and it’s better, and you know it’s better.” She’s like, “Well, I need a lower price.” At some point, you can’t win that battle, so you move on, and you have to be prepared to move on.
I will say this about sales. I gave the analogy like dating. I also think it’s like fishing. The more lures you cast out there, the more chances you are for catching fish, so I spend every day, when I do sell, with a list of 30, 40, 50 accounts that I’m going to reach out to, email, call, text. If you go fishing and throw out enough lines, you’re going to catch some fish, and I do find that if you keep at it, you build momentum, and you’ll get those sales.
That’s the other part. It takes time. No business that you start really starts out gangbusters, and if it does, you’re going to not keep that momentum forever. The long play, the working hard every day, builds momentum, and you build those opportunities, so the more you do it, the more opportunities you get of yeses, and I think that’s true for most businesses.
Felix: The largest customers that you work with, these are buyers at retail stores?
Matthew: They are. I think if you looked at our business, we really sort of have three major buckets, maybe four, but definitely U.S., North American retailers, buyers for those stores. The second is, we have international distributors. We have distributors throughout the world in Asia, in Africa, Middle East, Europe, Australia, South America, so we’re hitting every continent. Then the third part, which we look at, is our direct-to-consumer business, so they’re all different skillsets of what we have to do with each of them.
Felix: How does the marketing and sales differ between those markets, particularly when you are going after the retailers versus direct-to-consumer?
Matthew: It’s interesting. I think actually, they help each other in both ways. The more replacement you get with retailers, the more eyeballs recognize your product and then might find you online and be a direct-to-consumer customer. On the flip side, the more you’re able to grow your social media and your base of customers, it helps your retailers, because people identify your product. They might walk through a store now and say, “Oh, that’s a Bleacher Creature,” or, “Oh, there’s a Millennium Falcon toaster,” so they go hand in hand.
I will say this, when you’re working with retailers who are buyers, you don’t want to oversell in regards to calling them every day, but you have to have a routine on how you reach out to them, and it has to be multichannel, so phone calls are important. Handwritten notes or letters, emails, and then if you have a relationship with buyers, texts. When it comes to direct-to-consumer, it’s similar. You’re going to do email, social media outreach, SEO marketing, and then you have to hit multiple channels. You have to, because people, everybody’s different. All buyers don’t act the same way, so they think differently, they like to get information in different ways, and you have to figure out what’s the best way to connect with them.
Felix: Talk to us about that funnel with a buyer at a retailer. What is the beginning, the very beginning, of the relationship like, and walk us through the kind of steps in the relationship before you get to that sale.
Matthew: Well, I think the first thing, there’s two parts. Number one, you have to tell your story. You have to have a story of who you are, why you’ve been successful, and why you think you’ll be successful for that retailer. That’s number one. The most important thing that’s the second thing you have to do is get to know the buyer, understand their objectives, what they’re looking for, what their vision is, how they like to work, and really listen to them of what they need. There are plenty of times I have a full line of product, I hear what the buyer tells me, and then I make a decision and say, “Listen, I don’t think these products are right for you. I think this is right for you based on what you’re trying to do.” You want to go best foot forward, have success with that, because if you’re good there, then you can expand out like you do.
It’s really important to listen to buyers on what their business is like, because all stores are not the same. Bed Bath & Beyond is a unique retailer. They are different than Target, and Target is different than Walmart, so you have to really listen to them, and they’re all different than a small chain of toy stores. They have different customers. Different people like to shop there, so you have to understand who their customers are and then how your product can fit their consumer.
Felix: What kind of questions are you asking them when you are trying to learn more about whether it’s going to be a good fit or not?
Matthew: I like to understand everything about the buyer, so I want to know where they’re from, where they went to school, what their interests are, what’s working for them and their categories, what’s working for the retailer in general, or what are the challenges that you’re having right now as a retailer? You want as much, as colorful as a picture as you can get in regards to how that retailer is operating, how that buyer is operating, what type of pressure they’re under or what success they’re having, so they can give you information.
There are times I’ll meet with a retailer, and when we’re done and I say to them, “I’m not sure our product’s a fit for you.” What I hope is, they appreciate that, because I don’t want to sell somebody something that’s not going to sell, so it is asking questions, understanding what they need and figuring out, does what you have fit into what they need? If it doesn’t, then you have to look at your business and say, “Well, what can I do to fit in there?” It’s your job. It’s your job to fit for the retailer. It’s not the retailer’s job to fit for you.
Felix: Are you spending most of this first couple of meetings just learning about them rather than telling them about yourself and your products?
Matthew: Well, I think you only get so much time with a buyer. I used to be a buyer, and I think it is tougher to be a buyer today than ever, because number one, there’s a consolidation of retailers, so there’s less buyers. That means more people want to see you. We’re in the era of email saturation, right, or oversaturation. I mean, Felix, how many emails did you get today already?
Felix: A bunch that I had to delete. That’s all I know, so …
Matthew: But, I mean, I know what I go through, and if you are a buyer and you have a couple hundred vendors, if they’re emailing you three days a week, that’s 300 emails right off the bat, let alone emails that are coming internally, from your bosses, new products that are being presented.
Felix: How do you stand out? How do you stand out in that kind of noise?
Matthew: I think you have to stand out by, number one, listening, because I’m not sure all salespeople listen. I think you have to be important, and I think your message has to be clean and focused in regards to what you’re doing. You don’t have a lot of time with these buyers. There are major retailers where we’ll take a trip across the country to get 15 minutes with them. You better be prepared in 15 minutes to give them 10 minutes to tell you their story, and the last five minutes is, “Based on what you’re telling me, here is what worked, what we think will work,” and then you get action steps coming off of that. It’s not easy. It’s a tough job for everybody involved, so you have to be focused. You better walk in that meeting knowing what area you’re going to go in or what direction you’re going to go in based on the feedback from the buyer.
Felix: This sounds, like you said, this sounds a very stressful line of work that you’re in. Why not hire someone else to do it if it’s not something that you particularly enjoy as much as spending all your time on product development? Why not hire someone to do the sales for you?
Matthew: Well, I’m not the only one who does it. We do, our head of sales and operations also sells, so we both do it, and it’s nice. I think that is great, because we can talk about each other’s successes and celebrate those, and also, when we have a frustration, we can share it together, so we do it together. First of all, I don’t want it to sound like it’s a tough job. I actually think it’s a great job, even the selling part, and I think in the 21st century, there’s no easy jobs out there. I think everybody’s working really hard. That is part of the frustration of workers right now, because things are harder to do today than I think they were 20, 30 years ago, but that being said, the other thing is, it’s hard to find good salespeople that can do what I just explained.
It takes nuance. It takes strategy, and we’ve brought people in to try to sell for us, and it hasn’t worked out, so not everybody can do it, so you have to find the right people to do it, and I think it’s hard to do.
Felix: That makes sense. I want to talk a little bit about this, this merger. I want to take a step back to the very beginning. You merged between two different companies. Uncanny Brands and Bleacher Creatures came together. What was the reason behind the merge that, what did you guys see that made it make sense to come together?
Matthew: We looked at the businesses each on their own, and they were both challenging in regards to the infrastructure that you need to be in a license business, the specific channel that we’re in. When you’re Bleacher Creatures, all you can do is sell plush dolls, because that’s the business. Well, if there is less demand on plush dolls for that year, for whatever reason, that’s, well, what else do you pull out of your pocket? That was true for Pangea Brands too. They’re both nice businesses, but we both, both businesses had to pay insurance, had individual guarantees with licensors, had designers, had all this infrastructure.
The idea was, what if you put them together? You’re now sharing infrastructure, so your overall costs sort of go down for a bigger business, and along with that, you have multiple things in your pocket. I have much more fun today calling different customers to sell different things, and if one thing didn’t [inaudible 00:37:07] for them, I can sell them something else. For all those reasons, it gives us op … I guess the point is, Bleacher Creatures could hit singles, but it was really hard to score runs, because we had to keep on hitting the singles, but if everybody starts hitting singles, each, Phenom Gallery, Uncanny Brands, Bleacher Creatures, you score runs. We looked at that and we understood that one plus one equaled three, and that’s why we did it.
Felix: Got it. When you do come together, and then especially now that you’re creating new brands, what kind of resource or assets can you share between the different brands, and what kind of resources do you prefer to keep separate?
Matthew: Well, they’re all together. I don’t think there’s anything, internally, we do that is specific to one business. We, all the designers work on different businesses. All of us are involved. They’re all like our children. Uncanny Brand Appliances is a child, and Bleacher Creatures is a child, and Phenom Gallery is a child. If you’re a pa