Notes from Chris

Episode 2068

Nick Malinowski and Parker Barnes are friends from Utah. Nick graduated college recently and landed a job as a data engineer, while Parker is still in school working towards his degree.

Parker had a bit of experience working for a towel company packing orders in the warehouse where he saw first-hand how to run the business. He thought the concept was fairly simple and figured he could start an e-commerce fulfillment center out of his college house’s garage.

Meanwhile, Nick had worked in a fulfillment center one summer during high school, so he knew a bit about the business as well. But they didn’t know if the concept was as simple as it seemed on the surface, so they dug in and did some research about operations, costs, and competition.

After going down the Google rabbit hole, they learned that the fulfillment market—officially known as 3rd-party logistics—was pretty saturated. There were a lot of companies that did it. Good news was, the industry was fragmented and undifferentiated. That meant there was still room for someone new in their area.

Nick and Parker decided to cater to small businesses and startups, which appeared to be underserved. Their research showed that this target market was usually stuck with poor support and high order minimums, so they set up with an emphasis on better customer service. They knew they wouldn’t be able to compete on price because fulfillment is labor intensive, so they had to stand out in other ways.

But they had a big problem: they didn’t have any warehouse space. Furthermore, they didn’t want to commit to a lease when they didn’t have any clients. A real chicken and egg situation. Nick and Parker had to get creative … and quickly.

After 500 cold emails, 200 Facebook messages and 50 Reddit direct messages, they secured their first clients, which included a local Utah Kickstarter that had secured 3,000 orders, a German map company, and few smaller brands. This gave them enough projected cash flow to lease some warehouse space that they found on Utah’s version of Craigslist. Luckily, the space came with racking already installed and a forklift the landlord let them use.

OTW Shipping was launched in November of 2020 and had positive cash flow two months later.

Nick and Parker were bootstrapping the business with their own money. All in all, they spent about $5,000 on legal fees, packaging, a security deposit for that space, and warehouse management software.

The first big hurdle they had to overcome was postage, which they had to pay themselves for the Kickstarter project with 3,000 orders to ship. Because they knew they’d be getting repaid soon, Nick and Parker borrowed $10,000 from their parents as a three-day loan. This was easier than applying for a credit line increase from their bank for such a short period of time.

To get more clients, they searched terms relating to fulfillment every day and responded to any posts using those keywords by giving helpful advice. People then messaged them for more details, and they’d go from there. The process worked so well that they’re still getting leads from comments they left on Reddit a year ago.

They also use SEO. One of their competitors has people searching for pricing and reviews every day. So Nick and Parker use keywords from those searches to get leads. They create content using their own analysis of their competitor’s services and pricing, which leads people to their business instead of the competition.

Building a business as friends has its challenges, but Nick and Parker make it work. They’ve found their friendship has helped them be better partners because they trust each other and can call each other out when needed without fearing any repercussions. As they put it, nobody’s going to get fired for being brutally honest. Having different viewpoints gives them a balanced perspective.

OTW Shipping hit $1M in revenue in its first 12 months in business, moving over 120,000 packages. The business recently re-located to a 20,000 square foot facility and Nick and Parker are on track to triple their revenue in the next year.

They now have two full-time employees, as well as a few part-time workers, and they’re serving over 30 clients. Nick and Parker are looking forward to running the business together for the next few years and then selling it for a new adventure.

MENTIONED IN THIS EPISODE:

• Learn more about the two friends from their website, otwshipping.com.

SEE ALSO:

• Mom-Founded Startup Rents Infant Gear to Tourists: Busy mom in Chicago uses a peer-to-peer sharing platform to earn extra money for her family and help visiting parents get all the baby gear they need for their trip.
• Clothing Store Salesman Invents Baby Harness, Earns $100k Per Year: An innovative salesman creates a baby harness that benefits both parent and child, all the while creating a six-figure side income for himself.
• Paralegal Starts Side Hustle During Maternity Leave: After starting her hustle with a friend, this new mom buys out her co-owner and begins earning $10,000/month selling baby items.

Inspiration is good; inspiration combined with action is better. Now get back to work!

Yours in the revolution,

Notes from Chris

Episode 2063

Welcome to Throwback Thursday / “Where are they now?” where we take an in-depth look at someone who’s story has evolved considerably since we first featured them.

Last week, we heard from the founder of Throwlights, offering gear and training for lightshows. The concept comes from electronic music festivals and is taking off worldwide.

Today, in our latest feature, we’ll hear from Mike Grady. He’s a teacher by day and also the founder of a baseball training academy, Grady’s Pitching School. During the pandemic, he opened an additional business selling training gear on Amazon.

What’s happened since we first featured this pitch-worthy small business? Let’s hear directly from Mike.

Listen to today’s episode to hear more…

MENTIONED IN THIS EPISODE:

• Thanks to Mike for sharing his updates with us. Check out his website at GradysPitchingSchool.com.

SEE ALSO:

• Raver Turns LED-Powered Gloves Into Bright Future: When a raver-turned-salesperson falls in love with an underground artform, he turns it into a successful side business.
• Bright Idea Leads Chicago Woman to Million-Dollar Hustle: A Chicago-based plastic recycling sales rep overcomes her fears and doubts to transform her love for DIY lamp shades and $10 in supplies into a multi-million dollar business.
• 3D Printing Brings Cosplay Into 21st Century: With a 3D printer and sense of imagination, a California natural gas industry worker takes superhero DIY cosplay to a whole new level.

Inspiration is good; inspiration combined with action is better. Now get back to work!

Yours in the revolution,

Notes from Chris

Episode 2061

She knew there had to be a better way to consume toothpaste that didn’t add to the ever growing amount of plastic in the oceans and landfills.

In looking for alternatives, everything she found either used plastic in some way, or didn’t taste good. Lindsay was convinced that she could make a product that was the perfect combination of being plastic free and minty fresh.

Back at home after another trip, Lindsay sunk her teeth into online chemistry classes. She found a Reddit thread about how to take free courses through accredited universities, even prestigious schools like MIT.

She also reached out to every dentist and dental hygienist she could find to make sure she was on the right track. If she was going to invent a new kind of toothpaste, she needed to know how it worked.

Over time, Lindsay began to learn how to make toothpaste from scratch. In total, she took $6,000 in her savings to bring her idea to life. After playing with the recipe for a while, she decided to create small toothpaste tablets with a hand-press machine. They were dry and could be stored in reusable containers.

The tablet design was far less messy than the typical squeeze tube, and in turn easier to travel with and store. With her research, she learned how to create a recipe that would allow customers to pop a tablet in their mouths, bite it, then brush with a wet toothbrush. As the user brushed, it would foam up just like the toothpastes many of us are used to.

She called her invention Bite, otherwise known as “Because it’s the Earth.” Lindsay ended up launching it with her boyfriend, Asher Hunt, in 2016.

Early on, most of her customers were her friends and family members who were also passionate about sustainability. With their feedback, she refined her product. They would let her know if the taste was weird or if it didn’t foam enough, and Lindsay would modify the recipe until they were satisfied with the brushing experience. She also ensured that Bite was FDA approved for airplanes, so she and her customers could bring the tablets on their travels.

Next, she began to sell it on Etsy while continuing to work in television. Within the first year of business, Lindsay made over $6,000 and broke even from her initial investment.

Once her sales began to increase in 2017, she decided to stop relying on Etsy and focus on her own website. At first, she just used a template she found online and uploaded some photos from her iPhone, but soon her boyfriend gave her the birthday present of redoing the site. It was now called BiteToothpasteBits.com.

The following year, Women’s Health reached out to Lindsay to highlight Bite. They wanted to highlight woman-owned small businesses and asked to publish a video about her. The video was a hit, and soon after other outlets picked up on it. Traffic skyrocketed and she was brushed with sales. At that point Lindsay and Asher knew it was time to quit their day jobs. They needed more time to dedicate to Bite.

With her internet fame and growing success, Lindsay was then able to land an appearance on Shark Tank to pitch her idea and search for investments from the sharks. She and Asher ended up turning down a six-figure deal from both Mark Cuban and Kevin O’Leary.

Lindsay describes the experience as intense. When she and Asher went on the show, they were offered over $300,000 for 15% in the company. However, they had decided what they were comfortable with ahead of time and they couldn’t reach an agreement. Lindsay and Asher knew the sharks would just be taking too big of a bite out of the company.

Looking back, she remains confident in her decision. Their success has continued over the years and Bite is now an 8-figure business. Not only that, but the brand now sells more than just toothpaste.

Staying with the personal care theme, Lindsay invented the first ever plastic-free deodorant. Seeking to stop the 15 million pounds of deodorant packaging that end up in the world’s landfills and oceans every year, Lindsay made a reusable metal container.

After a one time purchase of $12, users can keep refilling the same container with their new bars of deodorant. They also created a whitening gel, mouthwash bites, and body balm all with the philosophy of “no plastic ever.”

In the future, Lindsay hopes to keep building her now full-time business – without biting off more than she can chew.

MENTIONED IN THIS EPISODE:

• Learn more about Bite from Lindsay’s website, TryBite.com.

SEE ALSO:

• Mom-Founded Startup Rents Infant Gear to Tourists: Busy mom in Chicago uses a peer-to-peer sharing platform to earn extra money for her family and help visiting parents get all the baby gear they need for their trip.
• Clothing Store Salesman Invents Baby Harness, Earns $100k Per Year: An innovative salesman creates a baby harness that benefits both parent and child, all the while creating a six-figure side income for himself.
• Paralegal Starts Side Hustle During Maternity Leave: After starting her hustle with a friend, this new mom buys out her co-owner and begins earning $10,000/month selling baby items.

Inspiration is good; inspiration combined with action is better. Now get back to work!

Yours in the revolution,