Landing a Million-Dollar Shark Tank Deal (And The Lessons Learned From Facing a Sudden Surge in Demand)

There are a lot of twists and turns in Joe Demin’s journey to founding Yellow Leaf Hammocks. It opens with a childhood refugee turned successful real estate developer, then twists into a story of entrepreneurship and an appearance on Shark Tank, and then turns again when a request for $400,000 became a $1 million investment. Through it all, though, Joe was guided by a singular idea to build a business that could actually have a measurable, sustainable positive impact on people. 

On this episode of Up Next in Commerce, Joe guides us through his quest to make Yellow Leaf a success. Tucked within this incredible story are some critical bits of knowledge about running a successful eCommerce shop, including the challenges of selling on Amazon and the ways to optimize your Amazon strategy, plus some of the pitfalls to watch out for if you decide to pursue a path into retail. 

3 Takeaways:

• There are challenges to selling on Amazon, and it all comes down to whether you choose the seller-central or vendor-central route. If you choose seller-central, you have more control, but have to provide the inventory and warehouse the product on your own. With vendor-central, Amazon purchases directly from you, but then they resell on the Amazon site and the algorithm sets the price, so you have to constantly monitor that aspect to make sure you are not cannibalizing your own business 
• Today, there are many companies that have a social good aspect to what they do. However, very few take the steps toward setting up an actual sustainable enterprise that truly benefits the people you are trying to help. By providing jobs and then programs that teach financial literacy and other skills, you create an impact that lasts longer 
• There are certain pitfalls that small businesses encounter when pursuing the retail path. Whether that is claiming shelf space, creating market-ready packaging or understanding inventory needs and retail term agreements, there are headaches involved, so you need to be prepared to deal with them or find a different strategy

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

---

Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

---

Transcript:

Stephanie:

Hey everyone, and welcome back to Up Next in Commerce. This is Stephanie Postles from mission.org. And today we have Joe Demin on the show, the founder and chief relaxation officer of Yellow Leaf Hammocks. Joe, how's it going?

Joe:

Going really well

Stephanie:

So, your title, I don't think I've ever had anyone on the show with a title of chief relaxation officer. I was very excited when I saw that.

Joe:

Yeah, we're laid back, so we can't take our titles too seriously.

Stephanie:

Yeah, completely agree.

Joe:

It's a fun job.

Stephanie:

So, when I was looking over a little bit about you, you have a very interesting background and I was hoping you could start from the beginning actually, which I don't ask from a lot of my guests. But I mean, I want you to go way back, like age five.

Joe:

Yeah, wow.

Stephanie:

Tell me a little bit about your journey to where you're at now.

Joe:

Yeah. I mean, I appreciate the question and definitely I think a lot of what I'm doing now is sprouted from my background. So, I came to the U.S when I was five as a Jewish refugee from the former Soviet Union and had, I guess, natural hustle built in just from my experience growing up in a kind of a rougher part of Boston and just worked my way up through into college. And was, I would say, on a track to do something entrepreneurial.

Joe:

And early on in college, I fell in love with real estate development for various reasons. We can probably have a whole separate podcast on that, but ended up getting a really amazing job, like a dream job and where I got to lead a lot of high profile development projects. And through that experience, that was my first foray into fusing positive impact with making money in business.

Joe:

And this is around the time where green building was just starting to become a more of a mainstream topic. And as one of the younger people at the firm, I spearheaded efforts to reposition the firm as a leader in green building and sustainable development. And part of that philosophy that I had early on was this realization that we can actually increase profitability by building things that were better, more sustainable, that had a better health impact, creating healthier communities and so forth.

Joe:

It was definitely driven by wanting to do good but also realizing that you can do good and have a profitable enterprise. And as 2006 came around, the recession started and real estate was really the first. I graduated in 2006 and so I lasted a couple of years through the recession and ended up taking a job, more of an institutional finance position, but focusing on affordable housing. And a similar philosophy there where if you roll up your sleeves, you can actually take on a part of the sector that wasn't necessarily as sexy, but also had real impact on people, and again, keeping on profitability.

Joe:

And around this whole time of being in real estate, I was starting to get exposed to other entrepreneurs more in the consumer product space who were some of the early pioneers in sustainable agriculture and fashion, those types of areas and they were doing it in ways that were really impactful.

Joe:

And so, I caught that bug and had no idea what I was going to do next, but real estate was not the place to be at the time. And I was basically planning to go to business school. And right before going and applying for business school, I saved up all my vacation days and ended up going to visit a good friend in Thailand who was living abroad with four of my other close friends from growing up.

Joe:

And it was on that trip where the idea for Yellow Leaf came to be, but it all transpired on that trip, but driven by this experience that I had and exposure that I had to other social entrepreneurs.

Stephanie:

Okay, cool. So what happened in Thailand where you were like, "Uh-huh, I need to start Yellow Leaf." What did that look like? How did you find the hammock? What was the story behind that?

Joe:

So, I was originally on a remote island and reading a local guide book trying to figure out what to do with my day. We're sitting on the beach one morning and in this book, there was a story, it was a basically said, there's a little shop on the other end of the island in the old part of the island.

Joe:

And in the shop, there's a map that they give out for free that's a locals' only knowledge type of thing where it'll tell you the secret waterfall and the secret beach. And I was like, "Okay, I got to go check this out." So, I hopped on my motorbike, zipped through to the other end of the island and ended up getting to the shop and it was closed. So I was pretty exhausted by the time I got there. I sat down, someone came and opened the shop and I asked for the map.

Joe:

And then I also noticed that there was just a plethora of hammocks that were beautiful. And I immediately jumped in. I had loved hammocks before this never thinking that I would be in the hammock business. But I jumped in and was immediately struck by how soft the yarn was, the intricate weave. And I started asking questions about this hammock thinking that I would buy some and bring them home.

Joe:

And I was told the story of the Mlabri tribe and an aid worker who was working with this tribe and how literally through hammock weaving they had gone from being on the brink of extinction as a culture and they were trapped in indentured servitude. And through hammock weaving, they were able to provide enough income in their community where they were able to self-sustain themselves and build a path out of poverty or were on track to do that.

Joe:

The impact that they were creating for themselves that was driven by themselves and not an outside aid organization was really interesting to me. I had been familiar with the Toms Shoes model, the handout approach to creating impact. And so, this struck me as something really different. And I learned that these hammocks were not sold really anywhere else outside of a few places in Thailand.

Joe:

And so, a week later, that story of this community and what they were doing and the hammocks really stuck with me and I contacted the shop and I asked if I can go visit. And they connected me with the village. And long story short, I convinced the cab driver to drive me 600 miles to the village.

Stephanie:

Gosh.

Joe:

And I went there and I got to meet the women making the hammocks and spent a whole day in the community. And I learned that people would hike as far away as the Laotian border to this village because they heard how much money they could earn, how well they could be treated. And they were being turned away because there just weren't enough sales.

Joe:

And immediately I was like, "Well, this is a great product." Naively I was like, "Oh, I can sell some hammocks. We can provide work in this community. And I came home with a backpack stuffed full of hammocks and all this energy and excitement, threw them down on the bed when I got home and with my now wife was who was my girlfriend at the time we were living together. And told her about my experience and it all just snowballed from there. And I basically decided not to go to business school and start doing this on the side and diving into it and slowly getting to where we are today.

Stephanie:

Okay, cool. Yeah, that's such an amazing story. Where are you guys today? How many hammocks are you selling?

Joe:

Oh, God. Well, we have over 200 trained weavers. We started with about eight women when we first decided to do this full time. So, we've grown quite a bit in terms of annual units. I mean, tens of thousands that we've sold. And we're actually growing a ton right now. But yeah, it's definitely a very sustainable business. We're past the ideation stage and more into growth right now, so.

Stephanie:

For sure. Yeah. And I love that idea of giving jobs and actually, like you said, developing a market, a bigger market and providing an opportunity instead of just giving things to someone. Because I do think that's a much more sustainable path and one that I'm always very interested in. How has it changed though from when just a few women making these hammocks? What does it look like now with all these weavers? Are you ingrained in the training process? How do you keep up product quality? It seems like there's so many questions when you're working with a village in Thailand.

Joe:

Oh my God. Yeah. I don't even know where to start. There's a lot that we've learned and I think we've built a really, hopefully, a model that others can replicate for the artisan sector. But basically, when we started, we were, well, one of the first things we did was update the designs and we learned early on that...

Joe:

I guess to just step back even a little bit. When I first came back from Thailand, my co-founder Rachel's idea was that we needed to test the market and see if other people thought these hammocks were as great as I thought and that I wasn't just crazy. And that proved to be a really valuable process that we went through where we started selling hammocks at local markets and different fairs around New England, where we were at the time. And we didn't share the impact story. We just tried to sell the product and we led with product first.

Joe:

And through that experience, we gained a lot of feedback around design and being really design-focused. And so, one of the first things we did as we were starting to really grow was update a lot of the aesthetic to be more on trend with color and pattern and things like that. Upgraded materials so they were really built for the outdoor use and using performance materials.

Joe:

And so, as we were introducing these things, our weavers were really receptive to that. And we really engaged them in the process. But some of the things we've done as we've continued to grow and looking at how do we create more impact? Layering in like we built a financial literacy program, we have this amazing partnership with kiva.org where we're able to provide zero interest flexible loans to our weavers.

Joe:

And thinking about how do we provide additional support or bring in partners that can provide additional support in the communities to make it truly sustainable because the first step is giving somebody an opportunity to earn a great living wage and helping people evolve to the middle class. But then it's taking that next step. And so, we've done some work around that and really focusing on quality control from the beginning as well has been super important for us.

Stephanie:

That's amazing. So, how do you manage inventory levels? I saw you were on Shark Tank, which I'd love to hear the story behind that, but it also made me be like, "Oh my gosh, when you're on Shark Tank, I'm sure you got a million orders." How did these weavers keep up? So maybe first, if I can hear a bit about the Shark Tank story and what that is like, and then move on to how you manage inventory from that surplus of sales I'm sure you have.

Joe:

Yeah. Yeah, Shark Tank was quite the experience for us. I think we have an ideal product to showcase on Shark Tank, especially during today's times where people are spending more time at home. But for us going on Shark Tank was really, it's catapulted us truly. First off, we've had our first infusion of capital. I guess I can give away what happened.

Joe:

We received a million dollar investment from one of the guest sharks, Daniel Lubetzky, who's the founder of KIND Snacks. So, he's a very mission-driven investor who has a similar track record as us in terms of rolling up his sleeves and taking 10 years to build what he's built. And so, he's been through the trenches, but our experience in Shark Tank was, I mean, since Shark Tank, we've definitely seen a huge uptick in sales and we've been able to put some systems in place to really shift our business towards more of a direct-to-consumer model.

Joe:

And it's only been a month and a half since we were on the show. So, we're still living through a lot of the chaos that comes after you're on the show.

Stephanie:

Mm-hmm (affirmative). So what kind of unexpected chaos came? Because I'm sure you're like, "Oh, we're for sure going to get more sales," but what things happened or what surprising things happened after you were on the show or maybe during the show?

Joe:

Well, we honestly had no idea what to expect. We talked to some other entrepreneurs that have been on the show and have learned that it's different for everyone. It depends on what's going on in the world at the time that your episode airs. I talked to one person who was on the show during a massive snow storm and people were at home watching and he had a product that really fit the times. And so he did really well.

Joe:

And I talked to other people who were like, "Oh, it was okay." So, we just had no idea. And then going into this also, we're going through such a crazy time where we just didn't know if people are, how bad people are impacted economically. And so, we didn't know how to prepare inventory-wise, we didn't want to overinvest in inventory. That's been something we've really tried to hone in on and not hold inventory too long, have some of those kind of basic business principles baked in.

Joe:

But we've seen sales have far exceeded our expectations and it's broke a lot of the systems that we've had and created a lot of inefficiency now as we're trying to catch up. And going back to your question around the supply chain, on the one hand it's been a challenge, but we've also been able to catch up pretty quickly. And I think having a vertically integrated supply chain like we do and really great relationships with our weavers is what's allowed us to not lose out on, we're not leaving too many sales on the table and trying to take advantage of everything that's going on, keeping our foot on the gas.

Joe:

But it's been just the uptick in order volume within a short amount of time and sustained order volume has been something that's new to us. And so, it's been a fun challenge to work on.

Stephanie:

Yeah, that's amazing. Congratulations. Getting a million dollars from Shark Tank is awesome. And you went in only asking for 400,000, right?

Joe:

400,000, yeah.

Stephanie:

That's crazy.

Joe:

Yeah, they have a great clip at the end where Kevin O'Leary goes, "It's never happened before in Shark Tank where someone comes in for 400,000 and comes out with a million." And honestly, we had no intention of raising a million dollars on Shark Tank. I think, yeah, we're still like, "Did that just happen?"

Stephanie:

Did it hit your bank account pretty instantly or was there a whole process behind it?

Joe:

There was definitely a whole process. You go through due diligence after, it's more of a handshake agreement on the show. And so, we ended up closing and then went to work afterwards just preparing to be on the show, making sure that everything was in place for us to have a successful airing.

Joe:

And this was before COVID existed, so we did not anticipate what the world would look like when the episode actually aired. But it's great to see some money in our account for the first time and actually be able to think a little more strategically, so-

Stephanie:

That's always a good feeling.

Joe:

... definitely a different business today than, yeah. Yeah.

Stephanie:

So, what was the first thing that you invested in after that cash hit? Did you have a plan for it or what did that look like?

Joe:

So, we knew we needed to build our marketing engine. Prior to getting investment, we were very bootstrapped, we would reinvest all our profit and we were always getting pulled in a lot of different directions. And for once we can actually focus in on updating our website and really making sure we're telling our story and being a little more deliberate in the communications through our website. And so that was several months of a project and also focusing more on product development. We've got this new product called the hammock throne, which is a new category of its own.

Stephanie:

I need the throne because I consider myself a queen, so I like that.

Joe:

So, putting money towards that and making sure that we're positioned for this next phase of growth with product development and a really good Ecommerce experience was the first two things. And we're continuing to reinvest into those areas right now.

Stephanie:

Very cool. Do you ever test with the messaging on your website? And if so, what kind of testing do you do and what do you see works best to tell the story?

Joe:

Yeah, we've done some light testing. And the one thing we've tested the most, I would say, is how we message the product and the impact. And it's always odd to us if we ever lead with impact and the artisan story, it doesn't resonate as well as telling the product story. And so, we continue to test and we continue to iterate how we're communicating that because obviously impact is super important to us. It's baked into our business model, it's why we started, but the product is what makes it sustainable.

Joe:

And so, we're trying to really weave that into the storytelling more, but that's one thing we've, every time we test it, product story always wins. But we're starting to really get that striking a chord with more about how we tell the impact and how the impact story really contributes to making the product superior and what the benefit is to our customers.

Stephanie:

Yeah, that makes sense. I did go on your about page and I was watching more of the story of the weavers and I couldn't stop watching. It was like one of those addicting memes or videos where you're watching someone knit something and I'm like, "Oh, I can't look away." That's a really good video.

Joe:

Thank you. Yeah, and that's how we're now figuring out how to really tell that impact story of showing how it's made, showing the people that are making it. Every hammock is also signed on the label by the woman who made it.

Stephanie:

Oh, cool.

Joe:

And so, we really want to connect customers to, there are real people that are so enthusiastic about every single sale that we get. It's awesome. And we want to connect our customers with our weavers. And so, that video is something that it took us a while to get. Again, just not having raised money up until recently, everything came naturally and organically and over time, but those are things that we've tested out and seen how once we're able to show how it's made, that's one of our advantages. A lot of products are just made in I guess more of a boring way. I'm not sure, but just not in the same environment. And so, there's this beautiful craftsmanship that we want to showcase.

Stephanie:

Yep. Yeah, I probably would not watch how my office chair was made, but yeah, that I could not look away from.

Joe:

I did just get back from an office chair factory as we were figuring out the hammock [inaudible] that's was... I do think...

Stephanie:

What were you doing there?

Joe:

We were sourcing components for the hammock [inaudible] because we're getting into furniture. And I think that just showing how things are made should be done more. I think it creates more transparency and connects people to where things are coming from, which is important for sustainability and just awareness around that's important stuff. I would challenge that and say, even the way office chairs are made, at least maybe I'm just a geek around manufacturing and production, but I think there's some, I don't know, I saw some cool things that I thought other people would be interested in.

Stephanie:

Well, if you take a good video, I will be open to watching it and-

Joe:

Absolutely.

Stephanie:

... seeing if it's as enticing as watching someone weave a hammock together.

Joe:

Yeah.

Stephanie:

So, when it comes to new products, you just mentioned that you guys are looking into getting into new products. But one thing I saw on your site was that you could actually build a custom hammock and it made me just think about, how did you decide that you would allow consumers to build a custom hammock and how does that get to the weavers? Because it seems like it would be easier just to have like, "Here's our three products, and this is what the weavers know how to do, and this is all you can order." What was that thought process like allowing a customer to create their own?

Joe:

Yeah. We had a lot of debate around whether or not we wanted to pursue that because it does add extra work for us. We figured out what would be the premium cost. I think it's a $50 premium to make a custom hammock. The process has evolved over time and we're getting more towards a tech-oriented solution in this next iteration. But there's a design guide that we share out with customers.

Joe:

Right now it's pretty manual. You order the custom hammock, we then email you a design guide, a PDF that you fill out. So you can't actually see the hammock, but we have a lot of examples in that design guide and you can see the different colors. And it's worked really well, but what inspired us to do that was more around just realizing we have the ability.

Joe:

We have a very design-oriented customer, or at least one segment of our customers are very, in that interior design world. We also were previously, we did a lot of collaborations with companies like Anthropologie — we made all the hammocks for Tommy Bahama and other brands and realizing that they wanted something unique to them and limited edition collections and things like that and that we have the ability to do that. We realized maybe individual customers also have that preference and to make something that really fits their space as they're designing that area in their home or backyard.

Joe:

And so, we tested it out and we got a pretty good response and realized it was something we can do. And it's allowed us to differentiate as well, but also just another way to add value to people. And I think there's this broader trend around customization and less mass market products and things that really represent your personality and your style and things like that. So, we really lean towards that and wanted to empower our customers to be able to do that.

Stephanie:

Yeah. That's awesome. So, are you guys in retail or are you only doing direct-to-consumer?

Joe:

When we first started the business, we basically were trying to get any sale we can get. There's that bootstrap approach, just hit profitability as quickly as possible. We weren't really deliberate about where our sales were coming from, didn't have the resources for one strategy or the other. And as we grew and started reinvesting and we became a little more strategic and we focused on, our business was at, a year ago, it was probably 50/50 between retail partnerships and Ecommerce.

Joe:

And we've obviously started shifting heavily towards direct-to-consumer with stores being shut down, but other reasons as well, I think we were going in that direction anyway of being more direct-to-consumer. And the other thing that we're focusing on, thinking about more longterm is, I don't think we're going to not sell into retail. We're just going to be more strategic around who we work with and making sure that our story is really told well, the product showcased well, it's definitely a hard product to merchandise. And it's an easier story to tell on the internet with video like you mentioned and being able to really focus more on storytelling, which is a big part of our brand.

Stephanie:

Yeah. That makes sense. What kind of issues did you run into when you were going into retail, outside of COVID and everything, but what problems did you encounter?

Joe:

Well, taking up space on store shelves, packaging, we didn't really have retail ready packaging. And so, going through a couple of iterations of different displays, things like that, it took so much time to develop. Also, payment terms aren't flexible with most retailers, things like that. We pay our weavers immediately upon completion of the hammocks and some in advance.

Joe:

And so, just the whole retail business model wasn't really friendly for our art model. And we constantly were up against having to negotiate for better terms, having to figure out how to display the product in a store. And it's always just been so much easier to do it online.

Stephanie:

Yep. So, earlier you mentioned that when you started getting more orders, a bunch of things broke. What kind of things started breaking first and how did you go about fixing them? Or are there any best practices where you're like, "Well, when you have this happen, we saw this work, then this didn't?"

Joe:

So, I would say on the supply chain side, a lot of the efficiency that we had created just broke in the sense of... So, when we first were working with eight women, we were able to really go to someone's house and collect hammocks. And it was very manual and individual. As we grew to 200 weavers, we created a little bit more of a schedule around when we would drop off yarn, created a central location and standardized some of the things around collecting hammocks and payments.

Joe:

And after the Shark Tank appearance, our sales, we far exceeded what we expected to sell. And so, we ended up going on back order and still working through a lot of that right now as we speak and ended up having to go door to door again, completely lost all the efficiencies that we had, just trying to get the hammocks to the customers as quickly as possible.

Joe:

We started drop shipping directly from the communities where they're made in Thailand direct to customers homes. And so, a lot of the efficiencies just broke down and those things are compounded as you continue to stand back order. And so, that's one thing. The other is that when we relaunched our website in the beginning right before we went on Shark Tank, we had all these plans to continue innovating testing and a lot of those plans just fell by the wayside because we were putting out so many fires around being on back order, trying to get more yarn.

Joe:

There are so many challenges right now with global logistics. So, getting hit from a lot of angles.

Stephanie:

Yep. Do you see the industry evolving around logistics in the future? Because it seems like so many brands were maybe dependent on one location or these couple of factories or something. And if they're down for the count, you're in a pinch, how do you see things evolving in that part of the business going forward?

Joe:

Yeah, that's a really interesting thought to try to predict what will happen. But I definitely think a lot of brands are reliant on just one manufacturer and there's reasons to maybe figure out other backup solutions. I think we'll definitely start seeing that it's definitely wise to not just be fully dependent on one supplier. But it's going to be really tricky because in the U.S we're just not set up to manufacture a lot of things that people buy here. And so, it's not like it's going to be a sudden shift to bring manufacturing back.

Joe:

And globalization, personally, I feel like has had a positive impact on prices of products for people and accessibility to different things, but we're retracting a little bit, so I don't know. I'm definitely closely watching it and thinking about how do we look at different yarn suppliers and raw materials and maybe have more options just in case.

Joe:

But I think we're also inclined to not create a problem and just stick with the status quo. I think a lot of businesses are that way, so it's a little bit of a balance of putting some resources towards planning for worst case and also keeping your foot on the gas and keeping up with what's actually working now, but things will certainly be changing in the coming year.

Stephanie:

Yeah. Completely agree. So, with everything going on and all the chaos that you just mentioned, have you been able to focus on your content and marketing strategy? And if so, what does that look like for you all?

Joe:

Yeah, we've been definitely trying to scale up our content strategy. It's a little too early for us to report anything significant, but one of our, an area that I think we've done it really well in is having a lot of user-generated content. And if you look at our website, most of the photos on there are actually taken by our customers and this might have been a benefit of being bootstrapped and that we didn't have the resources to do a lot of these full-on photo shoots that bigger brands have been able to do.

Joe:

And that's allowed us to have real people in our products and to be able to show that to our customers, creating that relate-ability. And we're definitely wanting to continue that, and we're hiring now, trying to build out the content arm of Yellow Leaf more and focusing more around what a hammock represents in your life and relaxation and really shifting our mission a little bit more towards making relaxation a daily ritual in your life. And so, focusing our content strategy more towards that.

Joe:

And so, being a little bit more deliberate around our photography too and really showing the product in different places and how to use it. It's a little bit of a technical product in terms of how do you set it up? Where do you place it? And so, going forward, we're really focusing on being able to create content that showcases and answers a lot of those questions.

Stephanie:

Yeah. Yeah. That's definitely a good move. I also saw on the reviews, people were able to select where they place their hammock, and I thought that was so important because then you can be like, "Oh, she's like me and she put it in her backyard," or they put it in their kid's room. And it just helped you visualize, "Okay, it must not be that hard if a bunch of people are able to do it."

Joe:

Yeah, exactly. And that's where the user-generated photos that we have come into play. We also included a 12 page hammocking 101 guide book with every purchase.

Stephanie:

That's good.

Joe:

So, it has a lot of resources on how to hang it, where to hang it. Everybody sets it up a little bit differently. And so, as we look ahead, developing products that allow you to really be able to hang a hammock anywhere, there's more of our focus going forward. I think we've done really well with perfecting the woven hammock and now making sure that we can increase the amount of hammocks we can sell and the way people can use hammocks and making it a more integral part of our culture in the U.S. And so, that's the biggest focus for us in this next phase with solving that how to hang problem.

Stephanie:

So, when it comes to, you were mentioning UGC earlier, how do you encourage your customers to post those images?

Joe:

Well, I think for us, we're fortunate in that it's the type of product that people like to brag about. So, we definitely see a lot of people who are excited to use it. And so they're like, "Hey, take a photo of me," and they share it. And we try to really monitor social channels. I wouldn't say we have a massive audience compared to others yet. It's growing right now, but we try to really connect with people individually and have them share those photos with us directly so we can reuse them and just engaging with people one-on-one has helped.

Joe:

And then, more people see others sharing and they share. And so, it just builds on itself. Obviously, we send out the post-purchase review requests and anytime we communicate with customers we're always like, "Oh, we'd love to see your photos." And it makes our day to see that. And I think they're excited to share. And so, we try to keep that momentum going post-purchase.

Stephanie:

That's great. So, for a product that's pretty durable, probably going to last many years, what's your idea around increasing the lifetime value of a customer? How do you bring them back? How are you trying to get them to buy more than one product? What does that strategy look like?

Joe:

Yeah. With hammocks, it's obviously you would think a onetime purchase, and we were really surprised with our findings once we started really looking at the numbers behind our sales. And for us, it's about just under 20% repurchase rate within first year of purchase. And so, we were just shocked that for a hammock that we were seeing that.

Joe:

And what we learned was that this was such a great gift for people. And we started communicating that more once we discovered that so many people were gifting hammocks to a new, if someone, a friend buys a new home, get them a hammock. That's a great wedding gift. It's unique, it's different. And so, we've started really showcasing a lot of that gift giving more. And so, that's helped with the repeat sale.

Joe:

But that aside, we're also looking at how do we add more products? How do we build out, there's that space in your backyard that compliments the hammock? So, you buy a hammock, but there's other things. What else are you buying to create that space? And thinking about building more of a robust home and backyard brand centered around the idea of creating that relaxation space. And so, what can we do to add more value there? That's the product philosophy is more around hammock-inspired products, I guess.

Stephanie:

So, earlier you were talking about creating different messaging around relaxation or gift giving and things like that. What kind of marketing channels are you seeing success with?

Joe:

I would say right now, definitely the basics of being on Facebook and Instagram, especially for a very visual product like ours is great. We see a lot of success there and we've really tried to focus in on those. In the earlier days when we were starting to really focus more on digital marketing, we cast a little bit of a wider net. We found Google to be really expensive, really competitive and narrowed it down to, let's really figure out Facebook and Instagram before we start branching out elsewhere.

Joe:

And so, that's what our key focus right now. And we're also seeing with a lot of bigger brands moving off of Facebook right now with things happening politically, we're seeing prices come down a little bit. So, it's a smaller brand, it's honestly benefiting us. And so, we're trying to take advantage of that to be totally transparent.

Stephanie:

Oh, yeah. We've had a lot of brands, smaller brands say that as well, so you're not the only one.

Joe:

Okay. Yeah, and it's great. I mean, I think things are always shifting. The more people jump on a particular marketing channel, the cost increase, so you have to be really nimble. And for us, this is also new. We're also focusing more on Amazon these days. And so, I would say that's another really, it's been a great sales channel for us too.

Stephanie:

What was that process or what does it look like selling on Amazon versus B2C? What kind of things do you encounter while selling through their platform?

Joe:

Definitely very different. You lose a lot of control. Amazon's broken up between seller central and vendor central. And seller central you warehouse the product on your own either in your warehouse or put it in Amazon's warehouse so that you can offer prime shipping if you do that. But you have more control on that end. And on vendor central, they purchase direct from you and on the inventory and therefore their algorithm prices your product.

Joe:

And so, if you have a minimum asking price map pricing like we do, we never really discount our products. And so, you're constantly having to monitor and make sure that the product is represented the way you want it, which is really challenging. But at the same time, so many people are shopping on Amazon.

Joe:

And I think when we were first starting to shift more towards direct to consumer, we had a little bit of pride around thinking, "Oh, we're just going to be on our own website and some select retail channels." And really again, I don't think that's wise, I think you want to be where your customers are, particularly for your category. And for hammocks, we had an opportunity to really stand out on Amazon because it's such a commoditized category.

Joe:

And so, we definitely, yeah, we made this decision and it's worked out well for us, but there's definitely challenges around being in control of how your product is showcased and there's less customization and so forth, but a lot of people [crosstalk 00:43:39].

Stephanie:

How do you stand out on Amazon?

Joe:

You can pay a little bit of money to be able to create your page. I think it's called A+ pages. And really you're still working with their templated sections, but really focusing in on like, what are the core things you want to showcase? And you have to stick within those walls. But trying to make that section mirror our website as much as possible and just having good customer service on Amazon as well is important.

Joe:

You do lose a lot of that control when you're selling on Amazon, especially if you have such a, you're trying to build a brand and not just another kind of a trinket type product. But again, if people are especially already aware of your brand, like for us, we saw after Shark Tank, people would go to our website, but also people would check Amazon just because Amazon has such a strong reputation for quick delivery, easy returns. And so, why compete against Amazon when you could be on there and increase your sales to reach more customers?

Stephanie:

Yup. That makes sense. So, how do you build, I mean, we've had a lot of our, we do a survey for some of our listeners and many people ask about selling on Amazon. So, what kind of optimizations do you do to your page, or are you experimenting with where you're like, "This is working really well or make sure you pay attention to this part." What kind of things are you looking at when it comes to creating a different page that gets found and it's enticing and still tells your product story and the background and all that?

Joe:

I would say we're still learning a lot, but one thing that's worked for us was to move all of our products under a single page so you can click through the different views all in one page. And for a while, we thought that would be a bad thing to do because if you're searching for a particular product and you only see one design, you might not click on it. We found that to not be true.

Joe:

Once you click on, you actually land on the product page, you can click through the different designs. And so, keeping people all on one page. And I guess you can apply this to your website as well. And Amazon obviously tests these things and we started just following whatever their best practices are. And it also allows you to have all the reviews for all of the products on all in that one page versus broken out across 30 plus views.

Joe:

So yeah, I mean, generally we're just trying to follow their best practices and take their advice on how to set your page up and just stick to the basics and good photography obviously is a given too, so that's been important.

Stephanie:

Yeah. A previous guest also mentioned that, let the algorithm do its job, or like you said, let Amazon tell you best practices, because he was just saying that a lot of people will try and just do something different because they think they know more and instead it's like stick with what works and what the brand is telling you what works and see how that goes first. So, yeah.

Joe:

Yeah. Yeah.

Stephanie:

That's good. So, earlier you were mentioning your website, is there any new tools or technologies that you're playing around with right now that you're seeing help conversions or maybe before you were seeing cart abandonment and now you're not, or you were dropping off traffic from the homepage and now you're not anymore? Anything that you've had success with on your website?

Joe:

For us having the live chat functionality is really great. And rather than having something that pops up and is in your face right away, just having a subtle message in a corner that you can click on and you can ask questions and if we're on, you can chat with somebody right away. Oftentimes it's been turned off lately just because we still have a pretty small team.

Joe:

But you can, instead of going to a contact us page, having that there, we learned that for our customers, that was really important. A lot of people have questions before purchasing. And so, making that readily available without a way that's super intrusive to their site browse-ability. And then having a popup with really good messaging around. What's the value to you to sign up to our newsletter and not just trying to throw another discount in your face, because again, for us we're not able to really discount heavily.

Joe:

And so, those two things have been probably the greatest for us. But we're continuing to develop our site more and add a little more functionality and features. And so, but yeah, we're just, again, sticking to what works and following... We oftentimes look at maybe what other brands are doing and get inspiration from them.

Joe:

If you're small like us, what we've learned is that there's no point in reinventing the wheel. And bigger companies like Amazon and other Ecommerce companies that have huge markets that are testing things constantly, you can really learn a lot by looking at what they're doing. And so, yeah, we're testing on our own, but also taking cue from others.

Stephanie:

Well, that's a good question then. What kind of other brands are you looking at? What Ecommerce companies do you keep an eye on?

Joe:

Definitely some of the big marketplaces like Amazon and Wayfair, very different from our website and they're more of a marketplace but just what their experience is like for customers is great. Actually, another company that we look at our category specifically, The Inside, who I think was on your podcast. They do an amazing job. We were looking at a lot of furniture and direct-to-consumer brands who are also selling products that require a lot of thought before purchase and how they're communicating some of the questions that people have when they're shopping for their home like Parachute Home, Floyd, or another furniture company.

Joe:

And also I would say some of the early pioneers and direct-to-consumer brands like Warby Parker, Away travel, who's done a really great job. And so, yeah, looking at the companies that have been able to raise a ton of money, grow super fast, build those departments out, what are they doing and how can we tailor some of those best practices towards our own business has helped.

Stephanie:

Cool. Yeah, I love that. So, before I move into a quick lightning round, is there anything that I missed that you were like, "Man, I really wish we had talked about this?"

Joe:

I mean, no, I think we covered so much.

Stephanie:

We did. All encompassing. Well, cool. Then we can move right into lightning round brought to you by Salesforce Commerce Cloud. So, this is where I ask you a question and you have one minute or less to answer. Are you ready to go?

Joe:

Ooh, great. Let's do it.

Stephanie:

All right. What's up next on your reading list?

Joe:

Ooh. I am really looking forward to reading something that is non-fiction. Honestly, I've had my head down for so long that I have not had a chance to actually kick back in one of our own hammocks. And maybe I have to do a little staycation. So, I'm looking for a book that can take me away from all the work stress and everything else. I can't say I have one right now. But I would encourage people to... I'm sure a lot of your listeners are always looking for ways to improve, innovate like I am. And I think I've always found value in trying to step away from that. And so, I would say I don't have a book on my list, but I would recommend A Gentleman in Moscow, which totally takes you to a whole different world.

Stephanie:

I like it.

Joe:

And that requires all sorts of great creativity when you do that.

Stephanie:

Yep, completely agree. What is your number one recommended spot when you go to Thailand that you would tell other people, "You have to go here?"

Joe:

I would say if you're going to Southern Thailand and doing more of the beach thing, take the extra step to go further from, a lot of people go to Phuket, which is great, but get on a boat, travel a couple hours further. And there's hundreds of islands to choose from. Honestly, pick any one of those. I would say Ko Lanta is great. It has a little bit of everything, but just, yeah. Go a little bit further, a little bit further away from the people and allow yourself to have that experience of truly being remote.

Stephanie:

Yeah. That's awesome. What is the favorite piece of tech that makes you more efficient?

Joe:

I would say, I mean, I love my MacBook Pro.

Stephanie:

Same.

Joe:

Yeah, thing is great, I take it everywhere. But everyone's got a computer these days. I would say, I don't know. Lately it's been just my computer because I've been staring at it for so long lately.

Stephanie:

Makes sense. Yeah. As is all of us. If you were to have a podcast, what would it be about and who would your first guest be?

Joe:

It would be around relaxation and how to live a more values-oriented life. And my first guest would probably be, I would say, Wim Hof, maybe.

Stephanie:

Ooh, that's a good one.

Joe:

Yeah.

Stephanie:

I was just watching a series about Iceland. It reminded me of him doing his cold plunges and yeah, he's great.

Joe:

Yeah. He's figured some things up.

Stephanie:

All right. Well, this was a great lightning round. Where can people find out more about you and Yellow Leaf Hammocks?

Joe:

So, our website would be the first place we recommend yellowleafhammocks.com and also our Instagram which is Yellow Leaf Hammocks. So yeah, looking forward to, yeah, seeing where things take us after this, but thank you so much for having me on. It's always a pleasure to share our story and hopefully add value to others.

Stephanie:

Yep. Yeah, it was awesome. Thanks so much for coming on Joe, and we will have to bring you back after all the Shark Tank craziness dies down and see how you're doing in six months to a year. So, that'd be fun.

Joe:

Yeah, that would be amazing, Stephanie.

Stephanie:

All right. Thanks Joe, have a great day.

Joe:

You too, bye.