Advice Line with Chet Pipkin of Belkin International

26:53So that led to my first prototype. What sport did you play? I played ice hockey, field hockey, and lacrosse growing up. And then I played field hockey in college. Wow, that's awesome. Okay, so Annette, tell me how you designed this and then you found like a manufacturer overseas to start making them for you? Yeah, yeah, exactly. I have no background in manufacturing or retail. I literally drew on a piece of graph paper what I wanted it to look like. And I had a very good friend who owns her own company and she's in manufacturing. And I said, what do I do with this drawing? I want to make this bag.

27:29How do I go about this? And then just from, you know, YouTube and her advice and talking to some other people, I kind of went down the route of turning that into CAD drawing and then finding a manufacturer to make my first prototype. But I was self-taught in this world. That's awesome. What were you? Is this your full time work now? It's not. I I've been in advertising and media for about 20 years. I work in sales. So this is very much my five to nine and my weekend job right now, which is great. What do you guys, and you're selling through a website, through a website right now only? Yep, I'm selling through my website.

28:06I do a lot with TikTok shop, which is really exciting. And I'm also in a few retailers as well. And tell me about your sales. What do you expect to do this year in sales? I think I'm going to do a little over 100K this year, which is about 10X from last year. Yeah. It's been such a whirlwind in the best way possible. Wow. All right. Before we dive in further, tell us your question. Yeah, so my question is about inventory planning. So I can't keep sideline bags in stock. The response has been incredibly overwhelming. I keep selling out. And so my question is, what is the best way for me to plan and buy inventory when I'm bootstrapping the business and cash flow isn't totally unlimited?

28:50And also space isn't unlimited. I'm still in my house, in my garage, in my basement, in every corner of every bedroom, there are boxes of sideline bags. But the girls love the bags and we've been selling out really fast. I want to bring in Chet. Chet, again, I mean, cool product to solve some clearly solving a problem for lots of people. Thoughts about Meredith's question or questions for Meredith? Yeah, I really like this. I've got a granddaughter who is an avid volleyball player. I travel with her on all of her away volleyball tournaments. So I watch her and her teammates gear up first just for life, right?

29:33And then they re-gear up for the game, and then they re-gear up again for life. So it's easy for me to envision a much more organized way to do that. So really in touch with the problem that you're solving on that side. And I love the problem that you have with the business. We had the same problem at Belkin, not enough cash, no working capital to invest in goods. So the way we solved that issue was we formed a very tight alliance with the person that was manufacturing our stuff. And we built a lot of trust with them. And so it wasn't like a viable financial model for them, but because of the trust we built with them, we were able to get them to build a lot of things for us and to keep them on their books.

30:34And they allowed us to pull it off of them as we needed it. We could have never afforded to have had all of that stuff on our own books. So I don't know if you'll be able to build a relationship like that. But if you can, it could be a way to solve your issue. I have a question for you, Meredith. I mean, what are your biggest sellers? I'm looking at your website now. You've got a bunch of colors here, maybe nine different colors. They're nine colors. I'm assuming, I'm just going to take a leap here, that black and maybe navy are your biggest sellers? So it's actually navy blue and the Carolina blue are our two biggest hits.

31:14But here's the thing that's unpredictable is I do a lot of team sales, which is amazing. I'll have a division one soccer team coach reach out and say, we'd love to get them for the entire team, which is great. But maybe they'll come in and buy 40 green bags. So green will sell really quickly. And then another team were like, we would buy 100 purple bags from you because our school colors are purple. And I have to go and get a certain color of purple manufactured. So when it comes to the specific colors that I'm making, it's really dependent on the demand that I'm getting from various teams. I mean, you don't have years of historical data, obviously, because you've just started this.

31:53So you're really going to be looking at sell-through rates for like 30 days, 60 days, 90 days. Are you selling out in a specific window? Like, do you sell out in like three weeks or two weeks? Or do you have any data around that? Some of them I sell out when I put it up on pre-sale before I even get the entire shipment. Every time I do a reorder with my manufacturer, who's amazing and to your point, Chet, I think that's a very interesting area for me to explore is like working even more closely with them and kind of how they can help me out there. We've been able to shorten the production time a little bit.

32:28But I've been sometimes doubling my orders with the manufacturer as well. And I still can't seem to keep enough in my house in stock. Yeah. Chet, I guess, I mean, normally you wouldn't want to drown in unsold inventory. That's not a good recipe. Inventory management is critical for building a successful business. It doesn't sound like Meredith has this problem. It sounds like it's going in the door and out in one door and out the other door. I don't know. I'm just thinking like, why wouldn't she just order more than she thinks she needs? What do you think? I'm going to guess she doesn't order more because she doesn't have the cash.

33:05And I can definitely relate to that. And so how does she get more without having the cash? Is your inventory more like bananas or is your inventory more like wine? Is there a lot of risk in the inventory you have? I actually think there's zero risk. I think if I got a lot and had it sitting there, I would eventually sell it over time. It's just, yeah. Okay. So it sounds like wine, it doesn't degrade over time. So your sales are a hundred thousand bucks a year. Do you have$10 ,000 in inventory at any given time? Probably like double that right now. Okay. And what is the lead time from the time you place an order until you have goods on hand?

33:53What is that period of time? It's about six weeks if I do air shipping, which is cutting into my margins. But I've been doing that sometimes because I have skinny margins better than no margins. And it's more like nine weeks if I C ship it, which I would like to do more of just have it planned out. So I'm just receiving shipments over time versus these like rush air shipped orders. Yeah. So I agree with Guy. It sounds like the problem you have is the problem we're all dying to have, is that our sales are constrained by a lack of goods. It's a much more fun problem to solve than I can't generate the sales.

34:36So I think you need to get creative with the working capital constraint you have. And so you can do that with your supplier if they're willing to undo that. And to keep it there for you, maybe there's another way to solve it where an angel or someone else is willing to fund that supply side for you. You'll need to give up some margin for that, either to the source of supply or the person who is doing that for you. But the cost of doing it that way is probably going to be a lot less than the cost of shipping it air. Yeah, the other thought I had was if you're constrained financially is, as Chet said, you could potentially work with the manufacturer to see if you could explore different payment terms, you know, like 30 % upfront, 70 % delivery.

35:34There are also other options like taking out some kind of loan, like non-dilutive loans. Are you on Shopify? Is this your website? Yes. Using Shopify? Yes, my website is Shopify. I'm not using Shopify for any specific reason. There's a lot of, I think, Squarespace, a lot of them do it. Yeah. I'm not endorsing any of them, but they exist. These are places where you can actually take out loans. Have you explored any of that? Shopify wants me to. It keeps prompting it right on the home screen when I log in there. Have you considered that? No, I definitely could. I think I could also consider just a regular small business loan as well, depending on what the interest rate is.

36:12I did actually renegotiate my terms with my manufacturer just this last cycle of inventory. So that was a good first step. I'm glad that you guys agreed with that. Yeah. Awesome. Cool. The brand is called Sideline Bags. Meredith Hudson, thanks for calling in. Good luck. Thanks so much. Chad, you could even put Belkin peripherals and cables in these bags. That would probably be the best thing you could put in those bags. No, but it's really cool. I mean, you know, I'm not I've got two boys who are athletes and they just, you know, dump all their crap in a backpack. And then, you know, you find it with like an old candy bar wrapper.

36:51Yeah. Watching my granddaughter and her teammates, they have a lot of accessories that your boys may not have. And so the way to manage that and to be able to keep track of that, it's a good problem to solve. All right, we're going to take a quick break, but we'll be right back with another caller and another round of advice. Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

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39:39Welcome back to the advice line on how I built this lab. I'm Guy Raz, and today I'm taking your calls with Chet Pipkin, the founder of Belkin International. Chet, thanks for joining me. Are you ready to take the next call? I'm ready. All right, let's bring in our next caller. Hello, you're on the advice line. Tell us your name, where you're calling from, and just a little bit about your business. Yeah. Hey, Chet. Hey, guy. I'm Ryan Helrigo, and I'm calling in from San Diego, California. I'm the CEO of RollFlex, a company that specializes in making therapeutic massage tools. We are most known for creating the world's most effective arm recovery tools for things like tennis elbow, carpal tunnel, and overall arm soreness.

40:18All right. Cool. Thanks for calling in, Ryan. Appreciate it. RollFlex. So tell me, describe what this product is. Yeah. Because we're on, we're not, it's not a visual medium here. Tell me, yeah, build me a picture. The best way to visualize what the RollFlex is, is imagine a vice or a nutcracker, but for your arms and also for your legs. So instead of using - A vice, a vice or nutcracker. Okay, keep going. Just imagine it's like a torture device, totally kidding, to help roll out the pain and tension in your arms and your legs. So it allows you to use that leverage to create all the pressure instead of gravity, which is what we use a foam roller or lacrosse ball for.

40:59Okay. So you, and generally what kinds of people, I mean, athletes, but is it for, I mean, is it, you mentioned your arms, also your, your, your calves, like where it fits over what parts of your body? It's adjustable. So you can do both. It's most primarily used for tennis elbow and arm recovery. You can use it for arms, legs, um, as the better way to recover. Got it. Okay. So it's like pressure, like you'd go to a masseuse and they would use their fingers and apply pressure to like knots in your forearms and things like that. Okay, cool. And how did you come up with this idea? How did this start?

41:38Yeah, so Rolflex started back in 2016 when my business partners, they're both physical therapists and massage therapists. They created this tool to help them alleviate their own tension. Imagine you're a PT or a masseuse working on people's arms and legs all day. You could imagine your arms after working on people would be really tense and really sore. My business partner, Nick, would go home to his sweet wife and go, honey, please help me roll out my arms. So they developed this tool to help do that to them themselves. Wow. And this is a patent, presumably a patented product. Yeah. And where do you primarily, where do you sell it?

42:17We sell on Amazon and our website primarily. Got it. And so how and so since 2016, so you're close to hitting your 10 year mark. Tell me a little bit about your sales. What do you expect to do this year? This year, we'll do about$5 million in sales. Last year, we did three. That's amazing. Yeah, that's awesome. And who are your primary customers? So we always say if you have arms and legs, we can help you with that. Yeah. I mean, that's pretty awesome. 5 million. Okay, so let's before we dive in further, tell me what your question is for us. Yeah. So the question that keeps coming up over and over and over again for me is that we have large businesses, think like manufacturing, logistics companies, military companies reaching out to have the role flex reduce worker comp claims.

43:00We have never successfully outbound reached out to somebody and got through to the right point of contact to get the role flex to help more people. So my question is, what are some pathways when serving the B2B realm in those spaces, what would you imagine would be a great pathway to help serve more people in that space? Yeah. When I hear government contractors or military contractors, my blood pressure goes up because it's so complex. The RFP process is just, it's so complicated and challenging. And Chad, I'm sure Belkin has been through this many times. So before we tackle the question, Any thoughts or any questions that you have for Ryan?

43:44Yeah. So I think you're both making a great point. A frontal assault is expensive and ineffective. With this kind of sales and market development, the best way to do it is an inside job. So if you can plant these experiences from people on the inside, and a firm that's done this in a brilliant fashion in the recent years is Slack. So what Slack does is gets people inside of the organization to use it. And then people inside of the org are the ones that are fighting and clamoring for the org to adopt it. So if you can get first some and then a critical mass of people inside the org that are using it and being an evangelist for it on the inside that, look, we're losing all this time to people being down because they're injured.

44:45We're incurring all of these costs. This is a lifesaver for me and for us. create that demand on the inside. And I think that things will be a lot more effective. Yeah, I think that's a great point. And Chet, truly, that is the only way that we have gotten to create contracts with these large companies for thousands of units for workers comp, because it all starts with that one UPS driver or that one health and safety officer, but that's a really hard to repeat process. Have you been able to connect with HR or procurement officers at any of these places that have been interested in maybe partnering with you?

45:31Yeah, HR. And then we have conversations around like corporate wellness programs and we start moving the needle there. And then what we've experienced in the past, and we've done it for a limited amount of time is something happens, the person's no longer working for the company, and then it's starting from the ground up all over again. Right. That's normal. How much does one of these devices cost? It costs$80, the cost of one massage. So have you been able to show, right? It's not just a nice to have perk, but have you been able to show that this could potentially be a cost reduction tool, right?

46:07Because workers comp claims are high and it costs thousands of dollars, right? Per employee, if somebody puts a claim in. And I mean, if you can show with data, and I don't know if you've done this, that this can reduce repetitive strain injuries by, I don't know, 5%, 10 % even, you then turn the product into a cost reduction tool. Like that to me would be the best argument. Have you been able to make that case and make that pitch? We have on the consumer standpoint through doing our own studies, but we have not been able to publicly share the companies that we work with that are willing to share their data reviews with us.

46:48And that's part of most of them come from military contracting that we haven't been able to re-leverage that. You can't publicly share it. You can't anonymize it and just share data that doesn't mention that doesn't reveal who you're talking about. Yeah, we could do that. Yeah. Yeah. Well, why wouldn't you do that? I feel like people always want like the name and. Yeah. You can say we have relationships that are private and, you know, but here's the data. We will show you the data from, you know, company, you know, Acme, whatever, Company X. It's a well-known company. You will know it. You'll know their products.

47:24You know what they do. But, you know, we have a proprietary relationship with them. So we don't talk about and we would protect you as well. Here's the data we have from them. They have 100 employees. They've reduced their workers' comp claims by 5%. It could save them$100 ,000. They only spend, you know, save a million dollars. They only spend$100 ,000 on this product. Whatever it is, you know, you're going to say, that's what you want to do. I think that's a great point. And I should definitely lean into that more clearly. Yes. But the D2C bit, what percentage of your sales are D2C? 99%. But 99 % direct-to-consumer, I mean, that's pretty damn great.

48:02I mean, the margins on that product must be pretty good. Yeah, yeah. And we've scaled through meta ads, influencers, Google, TikTok. But we're definitely in this phase that we're looking to go to the next level, and it's going to require sales channel diversification. Chet, how important for Belkin were these big contracts versus, you know, just selling to consumers? Yeah, so our B2B business was often almost as big as the business on the consumer side. Wow. And even the delineation between the two is not that clear, right? I mean, I use my tech at home. I use it at work. Is that a B2B path or is that a consumer path?

48:50and with all due respect to that like frontal approach through HR and the people that write the POs for this, it's not the way I would do this one. Let's go. Yeah. I would be much more, much more on the guerrilla side of things. So go where these folks are. If you can get to them and you can allow them to experience this. So like, let's say it was on the sports side, you're going to go to a triathlete event. Somebody's going to be there selling bottle drinks and somebody else is going to be having some kind of power bar. You're there with a booth with these things, right? And say, hey, you feeling aches or pains?

49:36Just give this a try. And you start solving that problem for people and they start talking about it inside of the organization and HR is hearing from them and procurement's hearing from them, that's where you're going to get your breakthroughs. The problem with you doing it, even with the data and everything, there's too many people trying to sell too much stuff and everybody's got all these claims. They don't know who is credible and who is not. For me, you have to get the inside voice. Whatever it takes to get those inside voices, that's where I'd focus 99 % of my effort. You're saying go grassroots.

50:18I love this, Chad. I didn't know you were a guerrilla marketer. I love that. Yeah. I would explore ways to be able to reward or incentivize people that make things happen for you. So I immediately don't know exactly what that might look like, but something on a referral or if you're able to make like these things happen for us, that this is your reward, I think I'd spend some time thinking about that. But that's where I'd put 99 % of my energy. Awesome. Thank you. Yeah, I agree. And I think that given how robust your D2C sales are, that's really the core here. But one thing you could consider doing is trying to find a distributor that works with these corporate wellness programs.

51:03And obviously you'd have to cut them in, but that could be an interesting approach, sort of outsource this outreach to wellness programs using your products. And that's what we've been advised is a really good next step. Instead of trying to do it all yourself and establish all the relationships, why not work with somebody that has it? And then comes the conversation. We are a fully bootstrap company around fulfilling these orders at that scale and that scope. Yeah. Yeah, and I think this is an inside job, and I wish you a lot of success with it. Yeah, awesome. Ryan Hellriegel, co-founder of RollFlex.

51:43Thanks for calling in, man. Good luck. Yeah, I appreciate it. Thank you so much. Chet, I mean, it's been a while since you were grinding through some of these issues yourself, but uh i mean it kind of must take you back a little bit it does thinking back grinding through this i don't think about it every day but hearing these people with their own grind going on it it all comes back i mean it's like i'm reliving it right i'm here in this moment and um i just want to dive in to help them because these are solvable things. And I think most of those, maybe all of those, we've had to solve in multiple ways in multiple times.

52:33Yeah, let's just go get it done. That's awesome. Chad, if you could go back, right, knowing everything you know now, back to when you were 21, you were starting Belkin, you were trying to figure this out, and you could give yourself a piece of advice that you now know, what do you think would have been helpful for you to know? So I think for me, the systems and the approaches that we invented were really appropriate and good for our business. And some of the biggest errors we made was listening to so-called pros tell us at a future point in time that the right way to run a business is fill in the blank.

53:12And rather than just staying true to what it was that was working and our own systems and our own our own DNA some of the times when when we tried to make that shift to the pros it was actually a huge step back so I would just keep following the heart and keep following what works and not not worry so much about what other people say are the right way to do things that's Chet Pipkin founder of Belkin International. Chet, thanks so much for coming back on the show. Pleasure to be here. Always great to see you. It's great to have you. And by the way, if you haven't heard Chet's original How I Built This Episode, please go back and check it out.

53:53We will put a link to it in the podcast description, the show notes. And here is one of my favorite moments from that interview. There were days when I thought nothing could stop us, that this is going to work and this is going to be the most brilliant thing ever. And there were other days that were really, really dark. And I just would hold my head and my hands and say, wow, this is never going to work. Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at guyroz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them.

54:44You can send us a voice memo at hibt at id.wondery.com or call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you, and we'll put all of this information in the podcast description as well. This episode was produced by Katherine Seifer with music composed by Ramtin Erablui. It was edited by Andrea Bruce. Our audio engineer was Sina Lafredo. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Carrie Thompson, Chris Messini, Rommel Wood, Sam Paulson, Neva Grant, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

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