Alex Yale, began his professional journey in M&A and strategy at Deloitte Consulting. Seeking new challenges, he moved into the tech sector, initially joining a small tech company that was later acquired by AT&T. He then transitioned to a partnerships role at META (formerly Facebook), where he spent six years in various partnerships and sales leadership positions.

After his tenure at META, Alex and his family relocated to Boston, where he joined Thrasio, the largest Amazon FBA aggregator. As the General Manager of Angry Orange, Thrasio’s most successful brand, he expanded the pet cleaning product line into major brick-and-mortar retailers such as Target, Petsmart, and Walmart.

Driven by entrepreneurial spirit, Alex eventually started his own brand, Uncle Todd's, specializing in home cleaning and maintenance products. He also acquired Flip-It Cap, a former Shark Tank brand. Alex now successfully manages both eCommerce businesses, which operate across multiple channels, including an upcoming in-store launch at Walmart.

> Here’s a glimpse of what you would learn…. 

In this episode of the Ecomm Breakthrough Podcast, host Josh Hadley interviews Alex Yale, owner of Uncle Todd's and Flip It Cap. They discuss the importance of retail diversification and maintaining high product quality in the evolving e-commerce landscape. Alex shares his background in M&A and strategy from Deloitte and Meta, and his journey into e-commerce. He emphasizes the need for a strong product-market fit on Amazon before expanding into retail, and the significance of strategic relationships with major retailers. This episode offers valuable insights for seven-figure business owners aiming to scale to eight figures and beyond.

Here are the 3 action items that Josh identified from this episode:

Action Item #1: Leverage Amazon as a Testing Ground for Retail Expansion:

Use Amazon to validate your product-market fit by analyzing reviews, sales data, and customer feedback. This provides proof of concept and helps refine your product before pitching to retail buyers.

Action Item #2: Present a Compelling Case to Retail Buyers with Data and Differentiation: When approaching retailers, provide strong sales data and highlight your product's unique selling points. Demonstrate how it fills gaps in their product lineup and aligns with their customer base.

Action Item #3: Design Retail-Ready Packaging to Capture Attention on Shelves:

Invest in packaging that is not only durable but also visually appealing in a retail environment. Ensure it communicates the product's benefits clearly to stand out from competitors.

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This episode is brought to you by eComm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures. 

I started my business in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

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Josh Hadley 00:00:00  Welcome to the Ecomm Breakthrough podcast. I'm your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Aaron Cordova's and Michael Gerber, author of the IMA. Today I am speaking with Alex Yale. He is the owner of Uncle Tod's and Flip It cap, and we are going to be talking about how you can expand into retail diversification of your sales channels and why revenue is key, especially with the changing market dynamics and the unknowns with Amazon FBA and their platform. This episode is brought to you by Ecomm Breakthrough, where I specialize in investing in and scaling seven figure companies to eight figures and beyond. If you're an ambitious e-commerce entrepreneur looking for a partner who can help take your business to the next level. My team and I bring hands on experience, strategic insights, and the resources needed to fuel your growth. So if you or someone you know is ready to scale or looking for an investment partner, reach out to me directly at Josh at Ecomm Breakthrough dot com.

Josh Hadley 00:00:46  That's e-comm with two M's and let's turn your dreams into reality. But today I am super excited to introduce you all to Alex. Alex began his professional journey in M&A and strategy at Deloitte Consulting. Seeking new challenges, he moved into the tech sector, initially joining a small tech company that was later acquired by AT&T. He then transitioned to a partnership role at meta, formerly Facebook, where he spent six years in various partnerships and sales leadership positions. After his tenure at meta, Alex and his family relocated to Boston, where he joined Thracian, which is the largest Amazon FBA aggregator. As the general manager of Angry Orange, the most successful brand, he expanded the pet cleaning product line into major brick and mortar retailers such as target, PetSmart, and Walmart. Driven by the entrepreneurial spirit, Alex eventually started his own brand, Uncle Todd's, specializing in home cleaning and maintenance products. He also acquired Flipper Cap, a former Shark Tank brand, and Alex now successfully manages both e-commerce businesses, which operate across multiple channels, including an upcoming in-store launch at Walmart.

Josh Hadley 00:01:43  So with that introduction, welcome to the show, Alex.

Alex Yale 00:01:46  Thanks. Great to be here. Josh, thanks for having me.

Josh Hadley 00:01:47  Alex, you've got a very, I would say, a non-traditional background of a lot of the guests that I've had on the show where, you know, they started their business right after college or they've always been an entrepreneur right out of the gate. You have a lot of, you know, quote unquote professional experience in the M&A world. They're at Facebook. Meta. interesting as well. So I'm curious, Alex, what has all of that experience kind of led you to in terms of how you approach e-commerce now that you've decided to double down into the e-commerce space? after working with ratio, you're like, I'm going to do this myself. tell me what kind of mindset you have moving forward.

Alex Yale 00:02:22  Yeah. Josh, you know, it's a good point. I've been fortunate to meet a lot of, more traditional e-commerce operators. in the, in the year. Plus, I've been out on my own and including some exposure to them, during my time at the ratio.

Alex Yale 00:02:33  And first of all, most of of the men and women who are these e-commerce entrepreneurs who have been selling on Amazon and similar channels for, you know, as long as decades with an S on the end? super impressive. They are just, just really, really savvy operators. They've been, they've been through it all. And back in terms of the evolution of these platforms through marketplaces, the evolution of of Amazon as we, as you know, e-commerce sellers and entrepreneurs and operators. I mean, every day, or at least every week. There's some evolution of the platform, some, you know, unfortunately, there's a new fee, there's a new tactic, there's a new requirement, there's a new threshold, there's a new, you know, something you can do or can't do. Certainly there's new trends, new competitors, new layouts to the way that the platform looks. So, you know, I'm surrounded by so many thoughtful operators who have been in these platforms for for years. I think with my, you know, as you referenced more, you know, professional I think you said, but, you know, some might say more corporate background.

Alex Yale 00:03:21  Right? I started off as a strategy and operations consultant at Deloitte. You know, a professional services firm. One of the big four was there for, for for about four and a half years. And, it took a lot of experiences from there and went into tech. And then I worked at, at meta, formerly known as Facebook, for six years. And by the time I left, that was, you know, tens of thousands of people in a very large organization. So I think I try to find the middle ground between being sort of hacky, scrappy and super entrepreneurial, with also adding a lot of both strategy and process to the way that I operate my businesses, to the way they look at things like new product launches, the way that I look at, you know, the methods and the mechanisms I use for advertising. So I think I bring a lot of that sort of buttoned up college professional experience to this very, you know, sort of scrappy industry that's, you know, traditionally been people who have been just doing this for a long time and been through sort of hell and back, so to speak.

Alex Yale 00:04:07  So I try to bring a lot of the, the, the process, the strategy and the data driven background, to what is, you know, what requires a heavy operations emphasis. So I think I try to do a blend of the two of that, if that makes sense.

Josh Hadley 00:04:20  Yeah. No, it does make a lot of sense. And before we hit the record button, you know, I think one thing is you kind of came into this space and we're in the same MDS group. you I think maybe we're surprised by the number of, like, hacks and tactics that people do X, Y, and Z to get around this, this or, you know, exploit this loophole or whatnot. and, and you kind of haven't you definitely didn't kind of grow your brand that way. tell me more about that mindset and how you think. Why why is that important in terms of the strategy shift that you have compared to maybe a lot of these guys that are used to hearing and exploiting the latest hack?

Alex Yale 00:04:53  Yeah.

Alex Yale 00:04:53  So so, you know, kudos to all of my fellow, you know, Amazon entrepreneurs and operators who have had, you know, tons of success and many, many, many of them more than more than me at this point, for sure. and kudos to them for for identifying, you know, what tactics, loopholes, opportunities, you know, hacks, whatever we want to call them to, to drive their business, to compete with, with other sellers for both, you know, domestic and abroad, and then also keep pace with, you know, the challenges that the Amazon Marketplace presents. Like I said, a weekly basis. I, I have have gotten so much exposure to sort of that side of things in the past, you know, 8 to 12 months and have learned a ton from it and have witnessed a lot of amazing operational tactics that I'm learning from every day and trying to implement, you know, where appropriate in my business. but I think with my background, especially having, you know, placed products, you know, only on Amazon, but in Walmart, you know, retail and target and PetSmart.

Alex Yale 00:05:43  you know, I think you need to have the tactics, you need to understand the loopholes, you need to know how to operate and be a savvy operator. But frankly, Josh, there's no substitute for having a good quality product at the right price, meeting the customer's expectations and preferences and merchandised, marketed and packaged well. As savvy as you are. As an e-commerce operator, you still need to find a great product to sell that offers value. And like I said, you know, meets the consumers to where they're where their preferences are. And that given product category, and I think a lot of long time super savvy operators, almost ignore what they're selling and how it's presented in the quality and the price point and overemphasize on the tactics on how to make it successful on Amazon, how to compete in their categories. So I think you might take away in that regard is don't forget about the product, don't forget about the consumer product that you are trying to sell on Amazon or any other marketplace or retail channel.

Alex Yale 00:06:32  Because at the end of the day, even the best Amazon operators will not be successful with a poor quality, poorly marketed, poorly priced, you know, product. And so I think it's really a balance, right? You have to have a great product, a great price point, marketed and merchandise well, and you need to couple that with the right operational tactics and knowledge and abilities. You know, in these marketplaces or in these channels?

Josh Hadley 00:06:53  Yeah, I echo that sentiment 100%. One of my favorite people I've been listening to Alex Formosa. Right. And he shares basically that same mindset, which is like, look, if you spend just an extra portion of time on your product and make it that much better, right? Imagine what happens to your business if when you acquire one customer, that other customer now will acquire another customer for you because of the word of mouth or because of how much they love the product? But that only works if you go above and beyond for the product, right? People aren't going to go.

Josh Hadley 00:07:21  They're not going to speak word of mouth unless it's negatively for an average product. Right? It's got to be above and beyond. So, Alex, I'm curious with how does that with that being said, how does that impact the way you're approaching building Uncle Todd in your brand there?

Alex Yale 00:07:37  Yeah, sure. You know, Josh, can I take one quick step back and give a tangible example for how I feel like the product quality is so important? It needs to be balanced with the Amazon operation. you know, traditionally when Amazon was, was was smaller and, you know, less mature than it is.

Alex Yale 00:07:50  Today.

Alex Yale 00:07:50  There would be a lot of tactics for things like buying positive reviews, lots of product, and you use one of several sort of networks to try to get positive reviews. And obviously that boosts the credibility of your product and, you know, gets you to a four star or five star, what have you. you know, we all know the benefit of positive reviews on Amazon. They're incredibly important.

Alex Yale 00:08:06  But the moment you stop, you know, paying or trying to find hacks to get positive reviews, the actual the real consumers around the country and around the world are going to be the judge and the jury for how good your product is. So if I launch a product and let's theoretically say I had a way of getting reviews and I got, you know, called 20 friends and I said, hey, buy this product on Amazon, leave me a five star review, and they all do it. And then I've got 20 reviews and I've got five stars. I feel on top of the world. My product is set up for success, but as soon as like the general population starts buying those products, who are not my friends who have not been asked to give five star reviews, then they are going to be the honest, you know, arbiters of truth to the rest of the world that are going to live on my product page, right? So if Josh gets my product and it's as mediocre, gets the job done, but there are better ones out there that might be cheaper or slightly more expensive, but higher quality.

Alex Yale 00:08:49  That Josh is the world are going to make that known, right? You're going to give me a three stars. Hey, hey, this product did you know did the job that I was looking for? But at the end of the day, you know, the quality didn't hold up or it only worked for a week or two, or I found a better one or what have you. So you can prop up these success metrics by paying to do so and putting a lot of effort into it. But as your product scales and gets in the hands of more real consumers who are going to leave things like real reviews, it's all going to come out in the wash. And so you can prop up products, you can prop up reviews and ratings, but those are short term fixes. Those are Band-Aids and they're expensive ones and they're not going to last. And so that's just an example of how important, at the end of the day, the product quality and the price and the packaging is really going to be the way that you need to steer a product for, for long term success.

Alex Yale 00:09:26  Yeah, yeah.

Josh Hadley 00:09:26  I think you hit the nail right on the head there. Because, look, there's very few ways that you can, manipulate reviews at this point. And frankly speaking, like it's just not worth it whatsoever. Like, you should stay away from reviews with a ten foot pole on Amazon. it's just not even worth it. So which then just comes back to and we've seen success with this ourself. Like if you just come out with a good product, even if you have competitors attack you. Now, I know there's a lot of blackhat tactics, and I think there are some very competitive categories where like, you know, it's hard. You get 1000 negative reviews overnight sometimes, right. Like there's stuff like that that happens. But in general Amazon's trying to police that. They're trying to close those loopholes. So I think in the long term it is like whoever has the best product, like it will be shown correctly in terms of the reviews in the long term. So Alex, going back to that, that first question then.

Josh Hadley 00:10:13  So how does that what knowledge did you gain, especially while you're at managing the Angry Orange brand you got to enter retail. how did that like what did you learn from those experiences that are now influencing, your two brands that you're owning out?

Alex Yale 00:10:26  Sure. So so, when I first launched, my first Uncle Todd's product, which is, was and still is a septic tank maintenance product, I designed it from the get go to have omnichannel appeal. So I didn't just design for the Amazon digital shelf. But I took a step forward and I said, hey, I'm just starting this company, right? Nobody knows about Uncle Todd's. Nobody's ever received a product in their hand. I've got nothing on the market. This was pre-launch, of course, but how do I make a product that I could then, theoretically, if given the opportunity, go to the world's largest retailer like Walmart and pitch a product and have it be a product that they might express interest and ultimately, you know, potentially take a gamble and bring it to retail.

Alex Yale 00:11:04  So when I was doing my research or when I continue to do my research for products, for new product launches and my first all the way to products that have launched on the roadmap or on the roadmap for launch later this year. I spent a lot of time with Amazon, right? Like any Amazon seller who wants to launch a new product in Amazon, what categories are growing? What are people buying? What are they not buying? Looking at the reviews for existing products, what are people saying about them? What do they like about them? What they not like about them? Obviously, taking all the information that you can pull from Amazon, either directly or through a third party tool, you know, obviously like a helium ten or a jungle scout or a seller sprite, taking all that data and figuring out where the opportunity spots are, right? What price points are out there, what's the packaging look like? What are the, you know, the TBS or the reasons to believe in that product over a competitor? But what I also do, Josh, is I get out of my, you know, out of my office, and I go to the brick and mortar stores because it's easy for sellers who are sort of in an e-commerce tunnel to look at our e-commerce marketplaces as a source of inspiration and a source of intelligence on what product I should launch, why I should launch it, how it should be different from competitors, how it should be priced.

Alex Yale 00:12:03  But we're ignoring all these retailers that have products that are purchased on a brick and mortar basis. Right. So I'll go to Walmart, I'll go to target. Right? I'll go to any of these big box environments, I'll go to Costco, I'll go to BJ's, I'll go to the grocery stores, and I'll look at these categories and figure out what is being sold on brick and mortar. And when I launch a product, how can I launch a product that's both competitive in the Amazon ecosystem, but also has the potential to be competitive and successful in brick and mortar? So I try to take those, you know, those tunnel vision blinders off and look at the marketplace as a whole as opposed to just Amazon or just e-commerce.

Josh Hadley 00:12:34  Okay, I love that. Okay. So now I'm going to probe deeper. All right. So as you you say you go to these retail stores, which I think is is great. And a lot of innovation and ideas can come from this. I assume like you're looking at product packaging as one one aspect of it.

Josh Hadley 00:12:49  How does the product come packaged if it is to sit on a retail store shelf? So this would be my question here. especially with Amazon increasing FBA fees and all of that. What I'm hearing from most people is like, I'm looking to try to, you know, can I reduce my product packaging, can I reduce the size of my product so that I can go from large standard or maybe oversized into a standard product, large to small to save on fees? and from what I've seen in the retail world, you know, the packaging sometime can be a little bit more bulky, right? You're not I'm not worried so much about the it's got to be 11 by 14in, but no, no more than 0.75in thick. So I say in small standard size. How do you weigh the you know, how do you weigh that aspect of the packaging decision? for e-commerce, where it could just come in a poly bag and that's acceptable versus, you know, do I put it in a box?

Alex Yale 00:13:37  Yeah.

Alex Yale 00:13:38  Yeah. So, you know, like like I said earlier, I try to package and develop products that are, quote, retail rate. So I'd like to be able to sell the exact same product that I do on Amazon and sell it in a retail environment. So selling things in like a poly bag with an FN barcode skew sticker on it, like, you know, check the box. You know, I feel like people get that, you know, the Amazon package on their doorstep and they open it up and they, you know, as long as it's the product they bought and it does what they did, they wanted to do. You know, you're not they've already made the purchasing decision. They've already bought it. It's already been shipped to their house. They're going to open up and use it for whatever the intended use is. Right. When you're shopping in brick and mortar retail, you're looking at a shelf with a whole bunch of products in front of you, and most of what you're basing your decision to buy on, unless it's a product that you buy every week or every month or every six months, is going to come down to what's how it's merchandise and how it's packaged.

Alex Yale 00:14:18  Right. That's critically important. But I still think that when people open an Amazon package that comes on their doorstep, they might be totally satisfied with the product that comes in a poly bag with an FSK barcode. But I think they would be surprised and delighted to receive a product that looks of the same quality and the same merchandising and the same, you know, thought that goes into designing a package they would find otherwise on a retail shelf. So that's one thing. the principle of trying to essentially minimize size and weight. So your, you know, your your dimensional weight is as small as possible to get your Amazon size to your as you mentioned, that principle actually really applies in retail too. When you meet with a retail merchant or a buyer at any, any retailer, they often have a six, eight, ten, 12 foot section of store with, you know, maybe three, 4 or 5 tiers. And they are measuring their performance or their bosses or their companies or measuring their performance dollars per square foot.

Alex Yale 00:15:07  Right. They're paying rent for x thousand square feet of space. They need to drive as many dollars per square foot as possible. So think about it. If I have a shelf that's 24in deep and six feet across, would I rather have eight products that fit on that six foot shelf? And each product is, you know, between a half and a full foot and width? Or would I rather say, man, I'd love to get a dozen products on that same six foot shelf because then I can show more products. I have more of an assortment. I give my customers more choice in terms of brand or price point or features, and I'm maximizing my dollars per square foot. So the same principle, if we are trying to sell products on Amazon that are smaller, narrower, etc. applies in retail because the more products that a retailer can put on the same size shelf, the more dollars they can generate per square foot in that circuit. so, so width of a product and the way that it stands on shelf is really important.

Alex Yale 00:15:55  depth is less important. So that's actually a key interesting fact, right dimensional weight on Amazon. Whether it's deep or wide, it all sort of factors to the same dimensional weight. But on Amazon in retail rather with is the constraining portion, not so much often height or depth. And so there's a lot of similarities. But at the end of the day, I mean, if you can condense your packaging size down, that's going to be attractive to a retailer as well as obviously your PNL and Amazon.

Josh Hadley 00:16:18  Yeah, I love that. Great principles. I love this. All right. Tell me about price. because I think price, for the longest time I would see, you know, prices at Target or Walmart for a set of cards that would be like fairly cheap, like five bucks. And I'm like, man, those guy like, you guys are losing money. I can sell the same thing on Amazon for 15 bucks, right? And people are buying it left and right. so how do you approach pricing? And now I'll also say that was the Amazon long ago.

Josh Hadley 00:16:46  With the increase of competition, I'm starting to find like, oh, actually that retail price actually seems a little bit more attractive now. so tell me how you approach pricing.

Alex Yale 00:16:55  Yeah, sure. so so one thing on pricing, going back to your retail ready or my retail ready product development ethos. part of the reason I'm also shopping in brick and mortar when I'm doing my research right is because sometimes things are more expensive on Amazon than they are in brick and mortar. So, you know, let's just say the market for, you know, for, for some, some, you know, calculators. Right. The market for calculators on Amazon, this calculator would go for, you know, 1499 and all the similar calculators for 1499. When I go into staples or I go into Walmart or I go into target and that same exact calculator or, you know, same functionality, same size, etc. is 9.99, then I know there is something that I need to be doing better. That means to me that I should be selling that same calculator for 999 on Amazon, because it's being sold in brick and mortar for 1999.

Alex Yale 00:17:39  So I think it's important to be competitive on both channels. I've always been of the mindset, Josh, that the margins, believe it or not, are typically healthier these days in brick and mortar than they are in Amazon.

Josh Hadley 00:17:52  Tell me more.

Alex Yale 00:17:53  Yeah, sure. So so when you sell the brick and mortar retailers, you know it's typically somewhere around 50% of of MSRP or what they're going to sell it for. So if your customer is going to buy your product on a Walmart shelf for $10. Rule of thumb is that Walmart is going to buy it from you for somewhere around five. Maybe it's for 25, maybe it's five and a quarter. Different categories have different margin expectations, so some may want a 60% margin, whereas some buyers might be okay with a 40% margin. You're of course going to have your fees. Sometimes you have to pay things like slotting fees or, you know, removing, paying for, you know, discounting the product that's coming out in place of your product going in.

Alex Yale 00:18:28  obviously, you have to follow their routing guides to make sure your product is packaged properly, and you have to have a three PL that's going to ship it out, and you have to calculate freight costs. And sometimes there's, a marketing co-op that needs to go along with it. Obviously, you know, $10 widget for sale on the shelf. The retailer is going to buy it for five. There are costs that are going to take. So the margins aren't 50%, 100%, right. There's going to be another ten, maybe 12% in terms of fees and marketing co-op that you're going to pay. But if you think about Amazon, I mean, in my in my estimate, Amazon themselves is going to take usually around 50%, right? If I sell an item on, on Amazon for for $10, I hope to get $5 out of it. And I have not paid the cost of goods sold on that yet. So I believe firmly that if you launch the right product on Amazon and you have the right cost structure, your net margins can actually be better in retail than they are in Amazon.

Alex Yale 00:19:15  And part of that comes from not having to continuously chase PPC bids and sponsor your products. Right. When you go into a Walmart, are you going to a target or are you going to a PetSmart? Their entire existence is based on the ability to drive customers into their store, whereas on Amazon, yeah, Amazon takes, you know, millions of shoppers to Amazon.com, but then it's a pay for play environment, right? When you're on the shelf, when my products are on the shelf at Amazon or, sorry, at Walmart or Target or PetSmart. It is entirely up to the customer in terms of which product they choose to convert on. It's not because I paid more to get here. It's not really like that, right? The merchants can decide which shelf you're on and which placement, and some of that is within their control, but you're not actively paying every time somebody shows up to the aisle for that sale. So the margins, in addition, in my mind, being healthier after all is netted and done, they're more consistent because, as we all know, as Amazon e-commerce entrepreneurs and sellers, our profit margins fluctuate by by the hour.

Alex Yale 00:20:07  You know, how many people are bidding, how many competitors, what's the average bid? What's the conversion rate? And you take a lot of that constant fluctuation out of the equation when you're on a brick and mortar shelf.

Josh Hadley 00:20:16  Yeah, man, I think you hit the nail right on the head there. I think I genuinely believe like the tide is turning and it has over the last, you know, I would say 18 to 24 months where I think that you can probably be more profitable off of Amazon doing traditional brick and mortar because, you know, Amazon, I think is going to continue to push like the race to the bottom and PPC costs are only going to go up. FBA fees are only going to increase. So if that happens and you're already giving 5,060% to Amazon, man, I would love to go get that same amount. But maybe even more selling entered into traditional brick and mortar. So yeah, I love that strategy. And I think let me mention.

Alex Yale 00:20:55  One quick thing, Josh, on that front.

Alex Yale 00:20:56  Yeah. there was a new Amazon policy that came into my inbox late, late last night. Whereas this whole inbound placement fee, it used to be, you know, five, five parcels sort of would qualify you for removing any inbound placement fees. I got an email last night saying that now they have to be five of the same skew, and each master case has to be the same quantity. So before if I had five SKUs, if I made a shipment, one box of each SKU, I could probably qualify and I wouldn't pay the inbound placement fee. So that was great because, you know, some, some, some, some companies that have several variations. I've got a blue and green, a white and a yellow t shirt or whatever they used to send. Great. I'm gonna I'm gonna send five boxes in one box of each color product, and I hit the inbound placement threshold and not to pay that fee, but now I have to send five boxes of red t shirts and then five boxes of blue t shirts.

Alex Yale 00:21:34  And so literally in the last, you know, 12 to 24 hours, has there been another Amazon change that inevitably will cost most sellers additional margin. And it's not like you and I can go back to our manufacturers and say, hey guys, I just got an email from Amazon last night. It's no longer now. It's going to cost me more money to inbound product, so I need a discount on my cost of goods. Sold. Landed right. It just doesn't work like we can't. We have two choices. We can either take the margin hit, or we can raise prices and try to combat that. Neither option is a good one, right? So, you know, that's that's that's one thing that I wanted to mention. The other thing that I wanted to mention is, you know, Amazon, at the end of the day, as much as I'm sort of leading everybody to the fact that margins are healthier and more consistent in brick and mortar retail, well, there's two headwinds. They're right.

Alex Yale 00:22:14  One headwind is that Amazon's getting bigger and bigger. And more and more people are shopping for more and more things on Amazon. So that's just a headwind, right? I think the pie is still shifting. Plenty of people still go into brick and mortar retail and buy plenty of things. But year over year, especially as, you know, generations get older and their purchasing power increases, you know, a lot of people, many people find it very easy to Prime members. They hit a button at, you know, 930 at night and it's on their doorstep by, by, you know, the next afternoon. And they never had to leave their house to get the product they needed. There's a huge value of that. So I will say that, you know, Amazon's the elephant in the room. They drive a ton of demand across many different categories and it's consistent. I will also say that getting into retail, you know, depending on the retailer, is a long and difficult path. Whereas if you want to launch a product on Amazon within 24 hours, you can have a listing created and probably within, you know, 72 hours, you can have a box landed in the Amazon facility, with, with inventory, you know, available for sale or sale to sell shortly thereafter.

Alex Yale 00:23:09  So, you know, retail is great, but there are some key advantages on Amazon. So I don't want to ignore those.

Josh Hadley 00:23:13  Yeah. Yeah, I think you're exactly right. I don't think that getting off of Amazon and turning a blind eye to Amazon, that's definitely not the right answer. Right. But I think that it's it's becoming more you know, you've got to be smarter as an owner and operator. You need to be able to be able to take the punches that are going to happen with Amazon because the next five years on Amazon, I. It's only going to get more competitive and more margin squeeze. Like that's exactly what's going to happen. So how do you prepare for that accordingly. So Alex, you've sold me on the fact that I think retail is important. I like the attractiveness of the margins that may be there. But you mentioned like this is a longer sales process. This isn't like, oh, I'm in there tomorrow. Great. I'm in all Walmart stores. So walk me through the thought process.

Josh Hadley 00:23:55  As you talk to these brand owners that are listening, how would you recommend they approach getting into retail? I think there's a big difference between big box stores versus your small boutique shops as well. so walk me through like especially maybe what are you going to do with your own brands? What is your go to retail strategy for them? Sure.

Alex Yale 00:24:14  Yes. So, Josh, you know, I will I will put a major asterisk and a caveat on the fact that it depends on what category it is, what you sell, who you sell to, what your demographic is. but I'll take my brand, for example. Uncle Todd's. We sell home cleaning and maintenance products, which are of a pretty broad appeal. By and large, we have a septic tank, maintenance products. We have we have a floor cleaner. We have a toilet bowl cleaner. We have a shoe deodorizer. We have some great, great high quality products, and my products and my categories lend themselves fairly well to big box retail.

Alex Yale 00:24:42  Right at Walmart a lot target, you know, etc., etc. depending on the category, big box might be great. I mean, big box stores because of who they are and what they do, they tend to try to carry many different categories of products. So a shopper could go in there and suffice all of their shopping needs. in my mind, if your product or your product category is carried in the big box environment, putting the effort into sales cycles with a Walmart with a target or a similar store, you get a lot more juice out of the squeeze. Then if you try to hire up a sales team or go and pound on the doors of smaller, maybe more regional chains and or boutiques, it's just it's a it's a lot of effort, right? Sales and retail are a lot of effort. And would you rather put all of your effort into a target list of 3 or 4 or five 345 large retailers who would be able to, you know, purchase your product and and quite heavy quantities, or would you rather go around and knock doors for a onesie to order? That's going to be fairly limited in scale and fairly inconsistent in terms of demand, right? Ship a case every month, every two months when they ring the bell, versus a large retailer who has the potential to consistently place orders of, you know, large quantities on a weekly or a biweekly or a monthly basis.

Alex Yale 00:25:51  So in my mind, for products that you find in these larger format stories stores, you know, across the, across the US, that's where I would put my effort. Now, if you're a product that ends up in boutique stores, right. And that's just where your product is purchased, then inevitably if you want to be there, that's where you have to sell. but I don't know that I think that is a hugely scalable or a hugely profitable revenue stream, in my opinion. But this is all, like I said, category and product dependent to an extent. Yeah.

Josh Hadley 00:26:18  Okay. Makes a lot of sense. Now if you're trying to target these big box stores, then how do you approach them? Do you recommend having a sales rep that you hire internally? Or do you go with one of the brokers that already have those relationships? Where do you begin?

Alex Yale 00:26:33  Yeah, I mean, I think that answer is, is is is pretty is pretty simple. Well, you have three options, right.

Alex Yale 00:26:38  You can either well two options. You can sell direct right. You can hire a person. Or if you're the person, then you can be the person to try to knock on doors, send messages on LinkedIn, attend trade shows, attend conferences, have booths set up. You know, there's there's specialized sort of retail or merchant conferences like Ekrem is a company that does basically, you know, vendors, suppliers, speed dating throughout the country and a bunch of vendors come and a bunch of suppliers come and we sit down for 5 minutes or 15 minutes. And I pitched the product. It was done a lot virtually during Covid. I don't know where that sort of sits now, whether it's back to in-person or a hybrid, but you can essentially sell yourself or hire somebody internally to be your sales rep, or you can go out and you can say, hey, I know I want to be in Walmart, and I'm going to hire a broker who does a ton of business at Walmart, has a lot of connections, has a lot of relationships, and I'm going to end up paying them.

Alex Yale 00:27:19  either, you know, either just a commission if they get me in the door, or I'm going to pay them a retainer for all their work. And then our commission if and when they get me in the door. you know, it depends on how big your operation is and whether you have the skills or the people to go and direct sell yourself. for my particular case, I did sell it directly to Walmart. I did not hire a rep. and part of that was I had some relationships from past, you know, retail experience from Angry Orange. So I leveraged my knowledge and relationships. But if you've never worked in retail before and you've never sold to a retailer, it's very complicated. There's a lot of things that need to be done. There's a lot of information you have to be prepared with. and I would recommend, unless you have somebody on your team or unless you personally have experience selling into and selling to a retailer, it's probably best to hire a rep who knows that retailer and who knows the process.

Alex Yale 00:28:06  to me, going direct if you have no knowledge is probably Pennywise, but pound foolish. You might think you're ahead of the game because you're avoiding commissions, but all it takes is a single charge back from something you messed up on, getting your product to that retailer to wipe out somebody's commission for six, 12, 18 months. so in my experience, finding somebody who can rep and guide you through the process is probably money very well spent. And unless you have the experience already.

Josh Hadley 00:28:28  Yeah, that's, invaluable insights there. So another question would be, so how can you approach a big box store and what are they interested in? Do they want to see that you have a product that's crushing it on Amazon, or do they want to have something that is maybe more unique? Or what if you're a brand new startup, do do big box stores like that? Or are they like, look, dude, I've got limited shelf space, why am I going to choose your brand? Like, prove it.

Josh Hadley 00:28:51  Like I don't see any DTC sales you just launched on Amazon. Like, what's the story? How how do you get in and what is the pitch point?

Alex Yale 00:28:59  Yeah. Great question. So so Josh and my experience, both at Angry Orange and my current brand, we launched a product on Amazon. We saw success. We felt as though we've achieved product market fit, and the ratings and the reviews sort of spoke to themselves, spoke for themselves, and were the proof of concept. It's really hard to say. Let's just say, Josh, you were the Walmart buyer. Hey, Josh. Nice to meet you. I developed this really, really nice mug, and it works great. It's super good quality. The price point is there. You know, Josh, you might take the mug and drink out of it and use it for a cup of coffee and check it out or whatever. But if I say, hey, Josh, I developed this really great mug, and if you click this link, you're going to see there are 3000 reviews and it's got a 4.7 star average, and people have more or less nothing but good things to say about it.

Alex Yale 00:29:45  Which product are you more likely to buy right? The product that somebody is telling you is of great quality and great value, or the product that's got thousands of people who have purchased this product and basically attested to the quality, to the value, to the features, whatever it is. Yeah. By by launching a product on Amazon and by getting that, you know, genuine feedback, sales velocity and reviews and ratings to back it up, how easy have you how how easy of a decision to have you made that for the buyer that you're speaking with? I mean, you've answered all the questions, you've ticked all the boxes, you've probably sent them a sample. What questions might Josh have? Does it work? Well, 3000 people who left a review think it works right? Is the price point good? Well, I can see on Amazon that it's the most competitively priced or it's competitively priced, so you are taking the hardest work of a buyer out of, you know, off their desk by having that proof of concept and that market validation through Amazon success.

Alex Yale 00:30:34  So my experience is launch a product on Amazon because it's quick to do so and you have a huge market test it out, get those good feedback, get those good reviews right. And then you go to the to the buyer at any of these retail retailers. And you've got the whole package. I've got the product, I've got the price point, I've got the people who are, you know, attesting to the quality and the value and such and so forth. What questions are left? Right. And, you know, cherry on top is here. Here's my product compared to the competitors you have on your shelf already, and here's how my product is better, cheaper, etc., etc..

Josh Hadley 00:31:02  Do you almost want to be able to show that like, hey, we're a best seller on Amazon and we're outselling any of your current products that are on your shelf right now on Amazon?

Alex Yale 00:31:10  Yeah, 100%. I mean, certainly the former, right? I do not I'm not shy about saying, hey, you know, Mr. or Mrs. Buyer.

Alex Yale 00:31:15  Here is my link on Amazon for this product. So you can and they'll do that on their own. You don't have to give them the link. They're going to go to Amazon. The first thing they're going to do is go to Amazon and look at them. Right. And you don't need to, you know, be coy or shy away from it, even if they're Walmart and there's this rivalry between them, there's no question that Amazon's a giant e-commerce marketplace that has a lot of demand. Right. So set on the link, provide it to them, be very upfront and show them the validation. and then, yeah, you could compare it to their current assortment and say, hey, I'm out selling all of your brands 5 to 1 on Amazon. The only caveat to that, Josh, is because Walmart has been around for so long, or target has been around for so long. There are just some products that sell better or more in brick and mortar than they do in e-commerce. So you have to be a little bit careful about saying, hey, I'm outselling your current assortment 5 to 1 for every product because they may be seeing, you know, exponentially greater sales on their shelf than you're seeing on Amazon.

Alex Yale 00:32:00  I think the smarter approach is to say, hey, here's my product. Here's why it's great here. Here are the reviews and the ratings and the the sales velocity to back it up and instead say, and here's why my product is going to drive more value and benefit to your customer, as opposed to saying, I'm out selling them. Just saying, hey, here's my product is great. And we offer this feature, this feature of this feature, and our price is 10% lower than, than the current assortment you have.

Josh Hadley 00:32:20  That's great. I love that, and I think it truly shifts, like your entire mindset in the way you approach this business. It's kind of like launch on Amazon first. Give it the proof of concept, but have a competitive enough product that you could then move it into to retail. so I love that, Alex. Is there anything that you haven't touched on that you think our listeners should know if they're interested in getting into retail?

Alex Yale 00:32:42  Yeah. No. you know, I think again, I will I will just recap the importance of a good quality product priced well and providing, you know, features and benefits that are going to surprise and delight a customer.

Alex Yale 00:32:56  Right? No amount of salesmanship, no amount of gamesmanship, no amount of, you know, operational prowess is going to overcome the need for a good quality performing product at a good price point, packaged and market well. So don't don't forget that about the foundation. Whether it's Amazon, whether it's Walmart, whether it's target, whether it's a, you know, a specialty retailer like a PetSmart or a Petco. The product needs to be there. And if it's not there, you might pull, pull, you know, pull wool over somebody's eyes, whether it is an individual consumer or even, you know, a buyer. But it's all going to come out in the wash. I'll also say that getting on the shelf is one thing. It's time consuming. It's difficult. It could be expensive at times. There's a steep learning curve, but Josh staying on the shelf is equally or as you know, as potentially even harder. Right? So just making sure that once you're on that shelf, you're not sitting there like, all right, I'm on the shelf now.

Alex Yale 00:33:41  I can just, you know, take the pedal off the gas you always need to keep up with, you know, what are competitors doing? Where is the market evolving? What's the innovation in the space? You just need to continue evolving your product to keep up with, you know, the buyer, the consumer's expectations. Because in retail or in Amazon, you can't just launch a great product and say, my job here is done and hope that ATM machine just sort of generates cash, because at some point, if you're not abreast of market changes, customer expectations, competitors, you can very quickly fall off that throw and it can be a rude awakening. Yeah.

Josh Hadley 00:34:08  Alex, you have dropped some knowledge bombs on us today, and I've, I took down a lot of personal notes here, so this has been an awesome episode. I love to leave the audience with three actionable takeaways from every show. So here are the three actionable takeaways that I noted. Alex. Let me know if you feel like I'm missing something.

Josh Hadley 00:34:25  Action item number one is you've got to come out with an amazing product, and I think that the time and energy that you are going to invest in making sure that your product is the best that it possibly can be, and going above and beyond to where the customer is truly wowed is going to be the differentiating factor of keeping you in business for the next decade. And I think, you know, again, the days are getting shorter and shorter for the people that can sell, you know, put lipstick on a pig and put it up on Amazon and make a few bucks real quick. And, you know, that's a harder business strategy. So it may require some more upfront investment and cost, but take the time to put together an amazing product. Action item number two is.

Alex Yale 00:35:05  Doing that on that one thing. If you can't out compete on quality or features, you better outcompete on price or merchandising. So you maybe sometimes you can't develop a product that's way better or way cheaper or way prettier, right? But you have to at least hit on one of those.

Alex Yale 00:35:23  Otherwise you're not going to win, right? So you either have to have a far superior product and or be priced better and or be merchandise and marketed better. If you don't have any of those three, you're wasting your time.

Josh Hadley 00:35:35  What do you mean by merchandising and marketing from that aspect?

Alex Yale 00:35:38  Presentation, right. Photos. Listing quality videos. The packaging quality does it good. Does it look authentic? Does it look genuine? Does the feel and look of the product match the price that somebody's paying? I don't want to buy something for $100 that shows up in a poly bag with an FM basket. I just feel like I spend a lot of money on a low quality product. so, you know, I think that is important.

Josh Hadley 00:35:57  Yeah. Really good addition there. so yeah, action item number two is going to be when you do go for your product development, go to the brick and mortar stores. Go take a look and see what is sitting on the store shelves right now to a be inspired, see what the product packaging looks like.

Josh Hadley 00:36:11  And I love what your approach I think is very different from 99% of the Amazon entrepreneurs that started in this game, which is you're looking to create a product that like, I don't need to make any changes to the packaging or anything. If I get a Po from Walmart tomorrow, it's the same inventory and it goes all in. so I think that like looking at the price, looking at the packaging, looking at how the product is merchandised, as you mentioned, I think is an invaluable concept to add to your new product development strategy. And then last but not least, the third action item is I think people should have that type of mindset shift where I think I still think launching on Amazon is priority number one, right? You've got to succeed there in order to be able to say to have that argument or to have that case study, to bring to big box stores to say like, hey, we're winning here. We really believe we could bring in, drive additional traffic to your store, offer customers a better experience.

Josh Hadley 00:37:02  because again, for the big box stores, it's what's in it for them, right? Is there more margin in in it for them? can they, you know, are you bringing off Amazon or not even off Amazon traffic. But like, do you have marketing campaigns that are maybe even driving those people to those stores? Right. That's what those big box stores are going to be looking for. So, Alex, those are my three action items. Anything else that you would add that I missed or skipped here? No, I.

Alex Yale 00:37:23  Think you did a great job recapping Josh. You know, I hope this, you know, can be found helpful by folks in similar positions and or thinking about retail launches. Amazon is a fantastic platform to launch a new product. you know, but once you hopefully achieve success there, I think diversifying and de-risking by way of, you know, omnichannel sales, be it brick and mortar or be it other marketplaces, is is a wise thing to do, especially in the environment that we're in.

Alex Yale 00:37:46  And what we've seen, you know, transpire on Amazon over the past, you know, 12 2436 months. So I.

Josh Hadley 00:37:51  Love it. All right. As we wrap things up, Alex, I ask each guest the following three questions. So here we go. Number one, let's spend the most influential book that you've read and why.

Alex Yale 00:37:59  Yes, sir. So I have to think about this one. Josh, and I had to actually look at that bookshelf behind me, to, to to bring to mind what it was. I don't read a ton of of of business books. no, no, no, no real reason other than it's hard for me to stay sort of, you know, devoted and dedicated to them as I read through. I love nonfiction stories of survival. and so one of my favorites is, is endurance, which is about Ernest Shackleton's incredible voyage. And in 1914, as he attempted to cross the Antarctic continent. and I recommend the book for anybody who likes non-fiction, sort of survival tales, shipwreck type type material.

Alex Yale 00:38:33  But it just, you know what I think it taught me, and I think it's inspiring because it just, I mean, people, the things that people have gone to make all of our challenges on a day to day virtually inconsequential. And it really puts things in perspective. You know, we as entrepreneurs have bad days, bad hours, bad emails, bad phone calls, and we think like our world is about to crumble. And I think when you read books like that, first of all, it's a little bit of escape from our day to day, right? I'm not trying to cross the Antarctic continent in the early 1900s, but you know, the things that they have overcome and have to survive and get through put our challenges, obstacles, stressors and anxiety in perspective.

Josh Hadley 00:39:05  Yeah, I like I like that mindset. That's great. Question number two. What's your favorite AI tool that you've been using and why?

Alex Yale 00:39:12  Man, Josh, I wish I had a better answer for you. I don't spend a ton of time with.

Alex Yale 00:39:17  I, I do use ChatGPT, and I do use the paid version, which is feels like the best money one could spend. I think it's 20 bucks a month. Right. So I do use that. What do I use it for? I use it for listing content. I use it to analyze a lot of competitors and use it to analyze images of competitive, competing products. what I really love about the paid version is you can actually upload files, Excel spreadsheets, word docs, PDFs. So I'll give you a real example. the Walmart routing guy. Oh, is this binder here? it's 200 and, I don't know, 50 or 300 pages of dense material. basically how to, you know, send your product into Walmart and be compliant while doing so. I took this 300 page PDF, I uploaded a cheat sheet, and I asked it to pull out, you know, key elements or key things that I need to do given the kind of seller I am and the products I sell.

Alex Yale 00:40:05  And that's just a huge time savings, right? So being able to upload documents and how to run analysis and pull key points out. Things like that has saved me a ton of time.

Josh Hadley 00:40:14  I love, I love that case study. And yeah, who who wants to read three, 100 documents? A great, great use of ChatGPT. So thank you. All right, final question. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why?

Alex Yale 00:40:28  Yeah, I'll say that. You know, I do listen to quite a few podcasts like yours, Josh. so it's an honor to be here, as they say. you know, for first time caller, a long time listener. So thank you. Josh. but I but I also really enjoy Guy raz and how I built this podcast. I think it's just great to hear from inspiring, you know, entrepreneurs who started off with, you know, one location or one product or one thought or one idea, and just hear about the journeys.

Alex Yale 00:40:54  Right. I think it's very easy for us entrepreneurs to have a bad day or a bad email or a failed product launch and think that like, oh my gosh, like, how royally did I screw this up? Am I going to make this work? Is this company and where something am I going to be able to sell something? and it's just great. It creates a lot of empathy for me to. To listen to his podcast as he interviews, entrepreneurs and hears about the highs and the very real lows of the journey. and I think that that also keeps me quite grounded.

Josh Hadley 00:41:20  Yeah, I think one of the most valuable things is learning from other entrepreneurs because we all share, you know, similar highs and lows, even in very different industries. And hearing somebody else that was on the, you know, brink of bankruptcy, so to speak, and what they did and flip things around. And now it's a 100 million plus dollar brand. Right. can be very inspiring. So, I love that recommendation.

Josh Hadley 00:41:39  So, Alex, this has been a great episode. Thanks for sharing your wisdom with us. If people want to follow you, they want to learn more. where can people follow you best.

Alex Yale 00:41:46  Yeah. Great question. admittedly, I'm not super active on any of the socials, you know, feel free to send me a message on LinkedIn. and that's probably the platform that I check most frequently, and that I'd be glad to chat with any listeners and give give some advice or guidance. so I'd say find me on LinkedIn, Alex Yale and, and let's connect from there.

Josh Hadley 00:42:04  Awesome. Well, thanks again for your time today, Alex.

Alex Yale 00:42:07  Thanks, Josh. Pleasure to be here.