On this podcast, we talk about why SodaPup was unaffected by the decline in subscription boxes, how they pivoted from their initial similar venture, the difference between the skill set of entrepreneurs vs executives, and so much more!
Adam Baker had a vision a few years ago. He wanted to fill an empty space in the dog toy market and make toys that were tough, innovative, and do it in a way that was safe for dogs and the planet.
It took some twists and turns to succeed but now, SodaPup is turning out toys that are FDA compliant, all made in the USA.
Baker is not only Head Dog in SodaPup, he’s the toy designer, social media and marketing manager (that means he sits in bed at 11:30 at night and posts to Instagram), janitor (occasionally dragging the vacuum cleaner from home in to clean the office carpet), packaging designer, photographer, and jack-of-all trades.
SodaPup manufactures durable natural rubber dog toys in the USA. SodaPup uses natural, sustainable, FDA compliant and non-toxic materials in their products.
Because SodaPup products are made in the USA, they are made in a socially and environmentally responsible way.
In This Conversation We Discuss:
Resources:
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Chase Clymer
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Adam Baker
We're trying to get people to fall in love, not just with our product, but with our brand and what we stand for. And so we have to stand for something to get people to fall in love with us. o
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer.
And today, powering through technical difficulties and rescheduling, I am very, very happy to welcome the founder of SodaPup. They produce dog toys right here in America made for power chewing dogs.
Adam Baker, how are you doing today?
Adam Baker
I'm doing great now that I'm finally here. (laughs)
Chase Clymer
Yeah, no. Well, we said we were gonna make it happen.
So that's the cool thing about this application, Riverside, you can actually use your cell phone to be a guest if you're experiencing oddities like we were today.
Adam Baker
(laughs)
Chase Clymer
So I alluded to [the fact] that the actual product is dog toys. So take me back [to] history.
Where did the idea of producing and creating a dog toy brand come from?
Adam Baker
Well, so my background is actually in the sporting goods industry. Spent my career working for Nike, and Under Armour, Crocs Footwear... And honestly, I was getting burned out on corporate life.
I was a little bit too young to retire. And I'd been watching the pet industry throughout 2008, the deepest part of the recession, and the pet industry was growing.
And so I thought to myself, "Well, I should figure out a business in the pet industry because it's recession proof. And I've got 3 dogs."
And when I started looking more closely at the industry, I thought "Dog toys... It's like every retailer has the same assortment of dog toys and none of them are very interesting." And I'm a product person. My career has been in product management.
And so we launched this little business called SodaPup. And our goal is to bring innovations to a somewhat slow-moving category. And we do that by focusing on consumers.
Most dog toys, I think, are shaped like bones or balls. Not terribly imaginative. And the reality is, it's people that are buying the toys.
So we thought, "Well, if we could come up with fun and interesting shapes that had some sort of emotional resonance with different types of consumers, then maybe we would have a shot."
So that's the underlying premise of what we do: Focus on the consumers. We'd like to say that we make dog toys for people and they work great for dogs.
Chase Clymer
Absolutely. So you guys are going into or are in year 10 in business? Is that correct?
Adam Baker
That is correct. Yeah. We started in October of 2013. There's actually a short chapter before that where we did a licensing deal with a company out of Southern California.
And we licensed the slogan "Wag More Bark Less" and we launched the whole product line around Wag More Bark Less.
And then that company got acquired and they didn't want to license the slogan anymore. So I had to figure out a quick pivot. It's actually interesting because that brand...
The whole idea behind Wag More Bark Less was to create a lifestyle brand for dog lovers. And we were doing everything from hats and t-shirts, to collars and leashes, to dog bowls and dog toys.
And the thing that we heard over and over again was "Gosh, we really love your dog toys." So when we had to pivot, we focused initially on rubber dog toys. And there's a supplier here, actually across the street from our warehouse.
We're based in Boulder, Colorado, and I got introduced to a rubber supplier here. And it turns out he made Kong toys, which is...
Kong is a leader. They've been around for about 40 years. And he had just gotten a separation from Kong and so there's this beautiful state of the art factory without a lot of product being produced.
So it's just funny how life works out. The serendipity of me getting an introduction and then going through a transition. So we were off to the races once that introduction was made.
Chase Clymer
Absolutely. So you have a licensing deal. You put some products out there in the category that you thought there was an area for growth. You got some really good feedback about the dog toys themselves.
So you decided to double down there with the second iteration of the company and move forward there.
So what was the go-to-market strategy? How were you getting those first initial customers? Were you...
Was it more of a wholesale model back then? Or were you going direct-to-consumer?
Adam Baker
Yeah, it was... Actually, it was more of an omnichannel strategy, which is a nice way of saying "I would take a sale anywhere I could get it." (laughs)
And so the other thing that was happening is, subscription boxes were growing pretty dramatically.
So in the beginning, you had boxes like BarkBox. And then Bullymake came along. And then Woof Pack and PupBox. And all of these subscription boxes were growing.
So if you're not familiar with what I'm talking about, you get a box in the mail once a month, and that box is filled with toys and treats.
And the challenge for the subscription boxes was they needed a new toy every month. They needed a toy that fit their theme of the month.
So they might be doing something like a prehistoric theme. And so they need dinosaurs and things of that nature. And then as they were growing, they needed a lot of products.
And so it became more and more difficult for these subscription boxes to find products that were on theme, in the volumes that they needed at the price that they needed. And so I went to...
I started working with BarkBox in the beginning. And then they got so big, they started making their own toys. So I went to the next biggest subscription box.
And I basically said, "Let me be your easy button. I'll build you a new toy every month. I'll build it for you at cost. The only hitch is that I own the designs and I own the molds."
And so I was making no profit on those orders but I was getting a new mold every month. So keep in mind for rubber, the cost of a mold is between $20,000 and $25,000. So you gotta sell a lot of toys to pay for your mold before you can start making money.
And so by partnering with these large subscription boxes, I was essentially funding my new product development. They were getting an incredible deal. And they didn't need those toys after the month that it was in the box. So it worked great for me, it worked great for them.
And so we build new toys for 4 years. 48 new toys. All with the molds paid for. So before we knew it, we had the largest assortment of rubber dog toys --American-made rubber dog toys-- of any brand in the business.
And we were so busy building these toys for these big key customers that we weren't even really marketing our brand.
And so a couple of years ago, I thought, "Well, I was very reliant on these big businesses. If they ever left, I would lose a lot of revenue." So we started to...
We finally started to market the brand through Facebook advertising, Instagram advertising. And people were like, "Holy cow, who are these guys? We've never even heard of them and they've got all these toys. How is this even possible?"
So we exploded into the general consciousness of dog owners all at once, even though we'd been in business for, at that point, 6 years. So it's a very atypical path.
But we leveraged a phenomenon that was happening in the market, which was subscription boxes. And most of my competitors who are much older than our company, they're very focused on traditional wholesale.
So they're trying to get their products into PetSmart and Petco and other larger chains. And nobody was really paying attention to the subscription boxes. So I zeroed in on that.
And it's what got us to where we are today. And then we expanded into nylon toys and into enrichment products, lick mats, things like that.
So we're a much more stable, much more diverse business today than we were in the beginning.
Chase Clymer
Absolutely. Now back when you were getting your products into these subscription boxes, were they branded your brand or were they white labeled?
So was there any awareness as well as getting the molds made?
Adam Baker
Well, it was kind of a blend. Sometimes it would have our logo on it. So there was kind of a convergence of strategies.
These boxes, they don't want to have a SodaPup product in their box every month because it starts to look like a SodaPup box instead of...
Chase Clymer
Oh yeah.
Adam Baker
...whatever box it is. So at one point, I went to one of the boxes I was working with and I said, "Look, you're going to want different brands in your box every month." And as I looked at the market, I thought...
One of the things that's really attractive about the pet industry is that the distribution is so broad. So it's not just pet stores where you sell pet products.
You can go into your grocery store and buy a dog toy. You can go into CVS Pharmacy and buy a dog toy. You can go into an Ace Hardware store and buy a dog toy. Or you can go to Target and Walmart. So you've got all kinds of distribution.
And so I made a decision, rather than have a brand that I sold into one channel of distribution... So rather than just being a pet specialty brand, I thought, "Well, what if I could become a category captain? What if I could become the very best at molded dog toys?"
And I created multiple brands that I could sell into multiple channels of distribution. So I created 5 brands. This also came back to our consumer segmentation strategy.
So 53% of American households have a dog so you have to assume that dog owners are very, very diverse.
So if you're a fashionista on the Upper East Side of New York, you've got a $50,000 Birkin bag and a four pound Yorkie that you stuffed in your bag.
You're a very different customer than if you're a you know, a dude on the Delmarva Peninsula who drives a pickup truck and likes to hunt, shoot ducks on the weekend.
So we created brands for each of these different consumers. These brands have very different attitudes.
So my USA-K9 brand is inspired by military objects. The number one product in that brand is a hand grenade treat dispenser. And we sell that to dudes with pickup trucks and tattoos and big breed dogs.
And then we've got the SodaPup brand and we've got a coffee cup treat dispenser, because she likes her Starbucks. And it's more geared toward a suburban mom.
So what we did was we created a consumer segmentation strategy, a distribution segmentation strategy.
And then that strategy I could sell into a subscription box so that they would have a different brand every month.
So it's a long winded answer to your question, but we were selling different brands into the box every month, even though it was all our stuff.
And then some of it was just unbranded which gave us greater versatility.
Chase Clymer
Fantastic answer to the question. It's a very unique strategy. Thanks for sharing that.
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Chase Clymer
So obviously, a few years back, there's the decline of the subscription box industry. There's still some out there and some people are still doing it but as you saw that decline coming, how did your strategy pivot?
Adam Baker
Well, to be honest, there hasn't been a decline in pet subscription boxes, we continue to see it grow.
Because people are crazy about their pets, which is one of the reasons I was attracted to the industry. I came from the sporting goods industry. And what really fuels the sporting goods industry is people's crazy passion for sports.
And every season, there's a new football season, a new hockey season, the new basketball season, there's college athletics, there's pro sports...
And so there's this endless fountain of new emotion around new athletes and so on. New personalities. While the pet industry is very much the same way, people are nutty about their dogs.
And so I was really attracted to the industry because I didn't think most people were doing a great job of marketing in the pet space.
And so if I could really zero in on this emotional connection between people in their dogs, then we could do things a little bit differently, both from a product strategy perspective --the types of designs we do, which are very consumer-centric versus dog-centric-- and then be able to market around that.
So we did not see a decline in subscription boxes. We saw subscription boxes growing and then moving away from us because they can hire their own product development teams, which had implications for us.
We had to figure out how to sell our own product instead of selling through subscription boxes. And that's been an amazing journey.
One of the things we did was really focused on Instagram, because we have super cute products and people have super cute dogs.
So there's just a lot of great imagery being pumped out with our product. And so we just started reposting all this user generated content, showing people using our products.
And it's been super fulfilling to see how people use our products. It's also been very surprising to see how people use our products.
So if you go to our Instagram feed @sodapupdogtoys, you will see the crazy things that people do with our products in terms of enrichment, the beautiful recipes...
They've turned our product into works of art to post on Instagram. So that's been really, really fascinating. And then that drove global brand awareness for us because Instagram is a global platform.
And so as our Instagram account began to grow then suddenly, we're getting inquiries from wholesalers, retail accounts.
First in France, and then in Germany, then in the Netherlands, and in Spain, and the UK, then in South Korea, and then Singapore... And before you know it, we've got 25 distributors around the globe selling into all these markets.
So social media has been central to our growth in a very unexpected way. We knew we had to be on social media, but we did not expect it to be a central driver of our brand awareness around the globe.
Chase Clymer
Absolutely.
Adam Baker
So that's been a huge, huge learning lesson for us. The other thing that's happened --and I don't think it's unique to the pet industry-- but there's been an emergence of digital selling platforms that didn't exist in the past.
So the pet industry historically has relied on a distributor model. So I sell to a distributor at a deep, deep, deep discount. They turn around and sell into retail stores.
And the big distributors have trucks, and they're making deliveries once or twice a week to these little stores. Because these small stores don't have room for 40 pound bags of dog food. They have to be resupplied.
The challenge with distributors is it's a very low margin business for us. And they don't want to carry a brand unless they're well-known first, because they don't want to risk inventory dollars and so on.
And so in the beginning, distributors weren't really an option for us. So the question became, "Oh, how do we get our product out there?" So we saw the emergence of these platforms.
In the beginning, it was WholesalePet.com. They basically carry our catalog, digital catalog. People place orders through wholesalepet.com and then they flow into us, so we would build those.
Then another platform came along called Faire.com. I don't know if you're familiar with Faire, but there's a lot of private equity money getting pumped into Faire. I think they became like... They got a $4 billion valuation after two years. It's growing like crazy.
And they're marketing their technology in Western Europe and US and Canada. So we just jumped on Faire and leveraged everything we possibly could on the Faire platform to drive sales.
And right now we're the number one pet brand on that platform, because we've embraced it so wholly. But what it's allowed me to do is grow the brand, particularly in Europe, with no distribution network.
And then it was super fun watching your brand spread like there's a viral spread. Because retailers are all watching one another, it's a competitive space.
So you can see when one retailer jumps on board, then it's almost like throwing a stone into the water and watching the ripples spread. You can actually...
You can watch that happen with Faire orders coming in. It just spreads and spreads and spreads and spreads. So it's been really fun to watch that as well.
Chase Clymer
Absolutely. Now with going into these new digital marketplaces, obviously, there's another one that we didn't really mention: Amazon.
But there's people who have opinions on owning their own customer relationship and selling through their own direct-to-consumer channel --like on their own website-- versus using these third party marketplaces where you don't necessarily get that customer.
What is your thought and opinion on growing without owning the customer?
Adam Baker
Well, in the case of Faire and WholesalePet.com, we actually... We do own the customer. Those orders flow into our Shopify store.
So we use a Shopify store. Those orders flow in and all the customer data lives in our system. So I can send email campaigns to them...
Just because the orders are being facilitated by Faire or by WholesalePet.com, those customers are still ours.
I have all their information I can market to them independently. Amazon's a little bit different. I have a love-hate relationship with Amazon. I've tried...
Chase Clymer
I think everyone does.
Adam Baker
Yeah. I've tried to be a direct seller. It's a full-time job just keeping up with that. And if you use FBA and you're selling a relatively low cost product, it's just hard to make money because you're paying for the shipping to get it there.
You're paying for the advertising, you're paying FBA fees, so there's just not a lot of money to be had.
So I've done 3 things: I started out with us being the seller, then I hired an agency to manage our store. Couldn't make money that way.
Most recently, I've given an exclusive relationship to one third party seller. And they manage the brand and they have access to my listings. So they can manage my store, but I'm not selling. We're selling off inventory that we still have there. But primarily we're selling to them as a wholesaler. And they are the...
They're the seller on Amazon. The challenge with Amazon is you have to figure out a way to maintain price.
And so what you can't do on Amazon is sell to a lot of sellers because even one extra seller will drive pricing down because everyone's trying to get the buy box. So we maintain...
We just have this one exclusive relationships to them.
And it's mandatory that they sell at MSRP or above, but never below. So that's the biggest challenge there. And then, of course, our retail partners are…
All retail partners are concerned about brands selling on Amazon because it represents competition. But as long as they maintain MAP, then it's a level playing field for everybody. So that's what we do.
We make sure that we maintain MAP. We police anybody else that manages to get our product and sell it online so that we can cut off their supply and make them stop.
Chase Clymer
Absolutely. No, I think it's very interesting that you said that running and maintaining an Amazon presence is akin to a full-time job. And I think that's absolutely true. And I think its expertise and skill set in and of itself.
And that's why like over at the agency, we're just like, "We know it exists." That's about it. That's the extent of it. There's some stuff there. Because it's just a completely different model than your...
Or just a completely different strategy than your owned experience, your own website or Shopify store, for example. It is just a completely different skill set.
So that's something that a lot of young entrepreneurs need to understand that it does take...
It isn't the same strategy in two different places.
Adam Baker
Of course, they'd like you to believe that it's easy, but...
Chase Clymer
That's the power of marketing.
Adam Baker
Yeah. They're constantly developing new tools and new ways to take your money. The challenge for us is the pet toy category is very, very competitive.
And so because of that competition, the price of a sponsored ad gets driven up. And so any margin that you might have had from selling the product gets eaten up by your advertising budget.
Chase Clymer
Absolutely.
Adam Baker
That's the challenge. That's the biggest challenge for us. And we're not very good at it. So (laugh) we farmed it out to somebody who knew what they were doing.
Chase Clymer
Absolutely. Now, Adam, is there anything I forgot to ask you today that you think would resonate with our audience?
Adam Baker
Well, there are a couple of things that I would say about SodaPup that make us different.
I started this as a hobby business in my basement. And I wanted to create a values based business. To be quite honest with you, this was...
I was fortunate in my career. I had the ability to retire when I was younger.
But I always had this question in my mind, because I'd worked for great entrepreneurs. Phil Knight started Nike selling running shoes out of the back of his car at track meets.
Kevin Plank started this tight t-shirt Company called Under Armour selling to his football teammates.
And you know, those were amazing experiences for me, where I learned a lot about big business with Nike and more entrepreneurship with Kevin and Under Armour.
I always wondered whether I had the right stuff like "Could I create something from nothing like ground zero?"
So this was a bit of a challenge for myself to move into an industry where I had no experience, I had no contacts...
I knew how to make molded products, because at Crocs, we made a lot of molded footwear, but...
And so I wanted to see if I could make something from nothing. And in an effort to do that, part of the question was, "Could I actually create a dog toy brand that people could fall in love with?" which is a tall order, because 99% of people who have a dog couldn't probably name any brand that they buy.
What we're trying to do is really very unique. We're trying to get people to fall in love, not just with our product, but with our brand and what we stand for.
And so we have to stand for something to get people to fall in love with us. So what we stand for, is, first of all, we're a veteran-owned business.
My first career was actually in the Coast Guard. We manufacture everything in the US. Everything. Our rope comes from the US. We use an Amish company in Pennsylvania.
The only thing that doesn't come from the US is the natural rubber, which comes from rubber trees. So, rubber comes from Equatorial climates. You can't grow a rubber tree in the United States.
All of our products are FDA compliant materials. So everything is safe for your dog. So there's a lot of fear when you buy a cheap toy out of China.
Are there phthalates in that material? Is there lead? Is there... All kinds of heavy metals and stuff. There's less control when you manufacture in China.
So we have focused on USA manufacturing, USA materials, everything's FDA compliant. And we give back generously to dog related charities, and we're just trying to do the right things that are meaningful for people.
And what we're finding is that people are falling in love with our brands. So it's really…
For me, to come full circle, I left my career at the height of my earning power. I walked away from, you know, tremendous opportunities to go ship twice out of my basement for about 3 or 4 years, wondering "Was this really a smart thing for me to do?"
But we've been very successful. We doubled our business last year. Just leased a second warehouse for... We're gonna outgrow that in the next year, so things are really starting to boom.
And when the time comes, I'll be able to walk away and say, "Yeah, we figured out how to do that." And it's been super rewarding. I have been fortunate in my career.
I've worked with some amazing people with some great companies. And this is rewarding in an entirely different way.
Actually, the skill set to be a successful entrepreneur is very different than the skill set required to be a successful executive in a bigger company.
I like rolling up my sleeves and I like bouncing between tactical work and strategic work instead of just being a strategist which...
I think the danger for executives in a big company is you start to lose touch with the reality of the day-to-day running of a business. And I like the day-to-day.
And I've got enough experience to drive the strategy. So it's just super rewarding.
Building a team, giving people jobs, having them be a part of the growth of this company, is just totally, totally different from my corporate life.
Chase Clymer
Absolutely. I can definitely resonate with the... Showing up every day and just doing the job is really, really the fun part of entrepreneurship.
It's the journey. It's not the destination.
Adam Baker
Yeah. And in corporate life, if you're going to advance, you typically... You start out doing a job that you love. And then you get promoted into jobs that you don't love.
They pay better, but they're not as much fun. So it's a bit of a catch 22.
Chase Clymer
Absolutely. Adam, well, I can't thank you enough for coming on the show and sharing all your insights with us.
For those that are curious about the product that you obviously love so much and you want them to love, where should they go to check it out?
Adam Baker
Well, the best place to go is SodaPup.com. It's S-O-D-A-P-U-P.com. You can find everything that we have on our site.
Chase Clymer
Thank you so much for coming on the show today.
Adam Baker
You bet. Thanks, Chase. Good talking with you.
Chase Clymer
Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us.
We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.