Honest Ecommerce

223 | The Marketing and Logistics of Product Drops | with Yong-Soo Chung

Episode Summary

On this podcast, we talk about why Urban EDC’s email list is its greatest asset, the importance of consistency, the success of Urban EDC’s paid memberships, and so much more!

Episode Notes

Yong-Soo is the Founder & CEO of Urban EDC and GrowthJet, a climate-neutral certified 3PL for fast-growing e-commerce brands. 

He also has a French bulldog named Spotted Humphrey who has over 150k followers across all social platforms. 

He and his wife launched a dog boutique called Spotted By Humphrey with Humphrey as Chief Barking Officer. 

Yong-Soo also recently launched a new podcast called First Class Founders where he shares his entrepreneurial experiences as a 3X Founder. 

In This Conversation We Discuss: 


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Episode Transcription

Yong-Soo Chung  

Don't spend too much money or too much time on something that you know doesn't have initial traction.

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. Today, I'm bringing you an amazing guest, another podcast host as well. Yong-Soo, welcome to the show.

Yong-Soo Chung  

Chase. Thanks so much for having me on tonight. It's a pleasure. 

Chase Clymer  

Awesome. So you've got one of the most famous French Bulldogs on the internet. Let's dive in and start talking about Spotted Humphrey.

Yong-Soo Chung  

Yeah, we... My wife and I brought home a French Bulldog in 2017. And I'm a little biased, but I think he's a pretty good looking Frenchie and he's got a big personality. And we just started posting videos and photos. And it's just... 

It just took off on Instagram and we started getting... 

I think we had 10k pretty fast. And then now he's at 123k on Instagram. And now we're building up his Tiktok account. 

But basically, yeah, we brought him home and a few of his videos went viral. [There] was one where I'm cradling him like a baby and that one went viral. 

And so yeah, my wife and I decided to launch a dog boutique called Spotted by Humphrey, which is a play on words from his handle. And that's been going really well. We actually got invited to Shopify’s

They were recording some segments for their channel. And it was like a professional studio with 15 - 20 people backstage and there's makeup artists... 

And this is in 2019. 

And it was so funny, because we were literally like... 

I don't know. The crew there was filming for Google --a commercial for Google-- the week before. And we were here with our dog, and it was just... It was just funny all around. 

But yeah, it's been a blast.

Chase Clymer  

Awesome, awesome, awesome. So by now anyone that has clicked on this because of the thumbnail and the title is probably like, "What are these guys talking about?" 

So let's actually introduce you and what we are going to talk about. 

All of that is true, by the way. And you can go check out his famous dog. 

But Yong-Soo, what are you actually up to these days?

Yong-Soo Chung  

So yeah, I'm the founder and CEO of Urban EDC

So EDC stands for "everyday carry". And it's things you carry like your wallet, your pen, a flashlight, a pocket knife, maybe... 

So these things are.... 

It's a really, really deep community. 

A lot of people are really interested and invested in finding really rare, unique things that they can carry with them. 

And so Urban EDC launched in 2015, out of my one bedroom apartment in San Francisco. And yeah, it's grown steadily since then. 

Our team is 5 people now. So every week on Wednesdays, we do a Gear Drop. So at noon Pacific Time, Wednesday, we drop all of our new stuff for the week. 

And we've done that for the past 5 years - 6 years. And yeah, we haven't skipped a single week. And I think that's a really... 

It's been a really core, important part of our success. It's that consistent Gear Drops every single week. So yeah. We did that. And then we... 

I had a lot of issues with our fulfillment. And I'm sure your audience might relate to some of your audience members. 

Fulfillment is a big pain point for a lot of people with Ecommerce stores. So we decided to launch a 3PL called GrowthJet. And this is in 2019. 

And so we had a lot of issues. And it's funny. 

As I did a lot of research on 3PLs before and we chose the best one, yet we had an incident where we had a customer emailing me and saying, "Hey, I received an empty box." 

And I'm like, "What do you mean an empty box?" 

And so he said, "Well, I got a box, I opened it, and there was nothing inside." 

And I was like, "Wow, that's really shady." 

And so I looked into it. It turns out, the person who was packing it had had pocketed the... It's like a $600 knife and shipped out an empty box to the customer. So experiences like that really put things into perspective. 

And I'm like, "Okay, I can do this better." And so we started to launch GrowthJet. We actually had paying customers without a website and without a name. And so we actually had 3 or 4 clients.

And then eventually, we obviously got a name and have a website but yeah, that's been a lot of fun. We just moved into a 39,000 square foot warehouse. So, yeah, we're definitely growing pretty fast there as well. 

So yeah, I can dig into any of that.

Chase Clymer  

Absolutely. Let's start at the beginning, that's usually how these podcasts work. So where did the idea for Urban EDC come from? 

How did you kind of get to thinking you could sell these pocket accessories --for lack of a better term-- on the internet?

Yong-Soo Chung  

Yeah, that's a good question. So, at the time --this is back in 2015-- and I was a full-time software engineer working at a cryptocurrency startup in Silicon Valley. And at the time, it was like... 

I just felt like... 

The regulation stuff was happening and cracking down on crypto and I felt really blocked. I couldn't…

Our team was rolling along really fast. But the... 

Literally the leadership team told us to stop our development because of the regulations. And so at that moment, I knew that I had to leave because I'm always....

I always like to move forward. I always need to make progress. And yeah, when that happened, it was just like the writing was on the wall for me. And so I left. 

And then when I left, I decided to look at what I was spending my time on and what I was spending my money on. So those are the 2 components that, I say, are the constraints that govern our daily lives: Time and money. 

And so I realized that I was really interested in these well-machined titanium pens and these pocket spinning tops, and thought that there was... Maybe, there's something here. 

And so I did a lot of research and there was an everyday carry community. But there was not a boutique shop that caters to EDC enthusiasts. 

And so, yeah, you can buy stuff on Amazon, you can try to find these hard to get items from makers directly from Instagram. But it was spread out everywhere. 

And so I thought, "Okay, maybe we could have a central place and essentially gather all these items together, and have a place, and cater to the community." Because there was no place and no shop that did that at the time. 

And so yeah, that was the idea and the genesis of Urban EDC.

Chase Clymer  

Awesome. So you saw that there was a community here, which is usually a very good indicating factor to the validation of the idea. 

What else did you do to validate this to see if it was a viable business?

Yong-Soo Chung  

So yeah. So the funny thing is I bought some stuff off of Amazon to resell on my Shopify site. And I know this sounds  wacky, but I just wanted to test to see what people would say about it. 

Because like I said, there was no shop that was really dedicated to this community. And maybe the community wasn't strong enough. I just didn't know. And so I bought some stuff that would... It would be categorized as everyday carry gear, but it wasn't... 

Obviously, I didn't get the really tough, hard-to-get items from makers yet. But I wanted to just see what the reaction was. 

And so I bought it off of Amazon, resold them at the same price. And that just started validating like, "Okay, maybe there's something here." 

And so each week, we iterate on the drops and get feedback. And so we just kept iterating, week after week and here we are.

Chase Clymer  

It's a fantastic story. So when did it feel... 

How many drops, I guess... 

So that'd be weeks in your mind. About what dropped, did you go "You know what? This is a real thing we're building here."

Yong-Soo Chung  

Yeah. So each week is its own adventure. And that's a funny thing, a funny way to look at it. But the way I put it is we're only good as our last drop. 

And that really motivates our team to keep searching for the best products to keep bringing our products --the production stuff that we're doing-- to keep it high-quality and high bar. And so I would say our first breakthrough was when we sold these. 

You know those razors, like the Stanley razors where it has got the disposable --what is it-- little blades where you can toss them and then you can just insert a new one?

Chase Clymer  

Yeah. The safety razors. A little more old school.

Yong-Soo Chung  

Yeah, yeah, yeah. So not the razors that you shave with, but the ones where you open boxes with? 

Chase Clymer  

Oh okay.

Yong-Soo Chung  

But yeah, so we had those and we made them using Damascus steel, which is this wavy pattern, a really cool looking steel that's high-end. 

Chase Clymer  


Yong-Soo Chung  

And that one was our first product. It was like, "Okay." 

It sold out within seconds. And we're like, "We got something here, right?" So that was our first breakthrough. That's maybe a year in. 

And then from then on, we kept iterating and trying different products. And so yeah. We've had other products that broke through after that, mostly knives I'd say. 

But some fidget products when the fidgets spinner craze was happening. We were in that whole craze of the fidget spinners. 

And yeah, now, it's more of a steady stream of collaborations that we do with other knife designers. And those tend to do really well. So...

Chase Clymer  

That's amazing. So I'm always curious about the marketing funnel for businesses that are more "drop" oriented

Could you kind of maybe spread some light on how you guys handle marketing, retargeting, and just... 

If you're carrying inventory for longer periods of time or just a drop to help younger entrepreneurs understand the differences between a more traditional business and a drop model?

Yong-Soo Chung  

Yeah. So the drop model is --I'm sure, a lot of people know already-- basically, you drop quantities, limited quantities, at a certain time. You do a lot of hype around it. 

So you work with content creators to say, "Hey, this is dropping on this date at this time. It's going to probably sell out fast." So it's driving this hype around it. And then you drop the item. 

It tends to sell out but not all the time. But typically, it does sell fast. And then, yeah. And that's pretty much it. It's almost like an event, right? 

So that's the drop model. 

And I would say that it's worked out really well for us, because we do this on a weekly basis. And the community itself is... They're used to these drops from makers. And so we just fed off of that culture already. 

These small makers are making things and they're selling out within a few seconds. And so there's a sense of rush and excitement that happens around this. And so people really... 

Some people get really upset if they don't get it, but that's part of the fun. So people would essentially wait around for a drop. And then if they don't get it, it'll get really upset. But then they'll try to get it next time. 

And I feel like this model works really well if you're able to keep refreshing your product on a consistent basis, rather than ordering a huge quantity of a production run and then trying to sell that through paid ads or something. 

And that's one thing that actually we should talk about. We got banned on Facebook ads pretty early in 2017. And so we couldn't... 

We didn't have a paid advertising channel. And so we had to get creative with "Okay, how do we drive up hype? How do we drive up demand for our products?" And so this drop model really helped with that because people were spreading the word about it. 

Wow, can you believe people are buying these $600 flashlights and literally, it would sell out. And so they were like, "What's up with these products?" 

And so that really helped us build awareness of our brand, instead of running these paid Facebook ads or whatever to get customers. 

So yeah.

Chase Clymer  

You took the question right out of my mouth. I was gonna be like, "Where does paid ads play into this model?" And what I've heard time and time again, it kind of doesn't. 

Yong-Soo Chung  

Yeah. Honestly, we don't do a lot of paid ads, if anything. We work with some content creators now where they... 

We pay them if they're a really big content creator. So those are, I guess, technically paid. But they're are a little bit more like partnerships, I would say where we send them products, they create awesome content for us, and we use them. And so that's a little bit different. 

But yeah, the direct performance marketing Facebook stuff, we haven't done that in, what, 6 years now or so. 

So yeah.

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Chase Clymer  

So if I was the venture to guess, your greatest asset to the business is your email list?

Yong-Soo Chung  

Yes, it is. So yeah, everything gets funneled into the email. So we drive traffic to our website and then we really want to get your email. And so we have this really fun, spin the wheel game when you... 

And we're actually A/B testing about constantly. And so we actually have two versions of that running right now. 

And actually, we're developing a third version right now. And we're going to A/B test that one against whichever one will win the first test. 

But essentially, we try to get your email address because that is probably the most valuable asset in terms of... 

I know SMS is also valuable but we found that SMS is not as... I don't know. 

It's not as powerful in terms of the engagement and the options that we can do like add in personality and all this stuff with email. So email address is really important. 

We have a really robust welcome flow. So there's about 10 to 11 emails that go out after you sign up. 

And our goal is to nurture them, introduce them to the brand, make sure that they know that we have top customer service, give them testimonials from past customers... All that stuff. And our goal is to have them make a first purchase. 

That's a really important goal for the welcome series.

 And then after that we have a post-purchase series, but we divide that into two. And so we have a series that... 

If you only purchase once, we have a long series for that. And the goal there is to get the second purchase, obviously. But it's a very... 

The second purchase is almost just as important as the first one if not more, because once you get the second purchase, it gets a lot easier after that. 

And so the second purchase is really, really critical. So that first purchase flow of the first purchase is very, very long, and it's also very enticing. 

And so after that, we split it up into anyone who's purchased more than twice or more than once, let's just say, they are introduced to our loyalty program, our referrals. 

And so at that point, they know who we are, they're comfortable with us, they're usually pretty happy with us. And so we introduce them to our loyalty program. So they can... 

At that point [they] probably [can] redeem their purchase points for gift cards and we say "Hey, by the way, you have X amount of points in your account. You can just redeem it and you can get whatever. A gift card." 

And so that flow is to separate it from the first purchase email. But yeah, so that's... 

Email is really important.

Chase Clymer  

I definitely knew I struck on something there because you definitely went off a little bit. (laughs)

Yong-Soo Chung  

Yeah, I did. Yeah. 

Sorry. I got too excited about email. 

Chase Clymer  

No, no, no, no. It's absolutely fine. Now you guys are doing something a little unique, too. You've got a paid membership

Let's jump in and talk a bit more about that. 

Yong-Soo Chung  

Yeah. So the paid membership is a new community that we launched at the end of last year. 

And what we found is that because we have such a strong community, we want it to have a place for the enthusiasts of our community to be able to gather and to talk to each other. And so that was the main point of the community. 

And so yeah, it's $9 a month to join for the basic tier. And then we actually have a higher tier, which is $99 a month. And that one gives you 3-hour early access to our gear drops. And so... 

But in that one, we don't actually open. So that one is typically just closed like it's sold out. And so we open them rarely. 

And we give the $9 tier first access to this higher tier, whenever it opens. And so we have this play on the supply of membership. 

And yeah, it's a place where people can come and we have a really robust buy/sell/trade area. 

So there's a lot of scammers in this community now where they're trying to just sell whatever and they don't actually have the items. 

And so with having this paid membership, we're able to reduce that altogether. There's a lot more trust. And so ultimately, we're just trying to serve the community.

We do a lot of product drops inside that community itself. So it actually never reaches the public. And I find that a really interesting model, because we're able to essentially have a separate site that only paid members have access to. 

And I think that's a really... 

That's a development that I can see happening more and more in the future like having a paid community that only gains access to a specific collection, for example. And so we're really trying to push that further and further. 

And as our community grows, obviously, we'll have more leverage and more buying power. And so we can work with makers or production partners and do some really cool stuff just for that community in larger quantities. 

So yeah, we're wrapping that up now. And it's been pretty good so far.

Chase Clymer  

Yeah. It's the dream of a lot of direct consumer founders that have more of a one-off purchase or anything like that. 

It's like, "How do I build a recurring revenue subscription element into my business?" 

And memberships work, right? 

But you have to be able to do it right. And it's wild to see the success of yours and, and what you're building over there. 

I know that our audience would be mad if I didn't ask "How are you doing that? What technology is it using if I wanted to explore it as a nerd?”

Yong-Soo Chung  

Yeah, it's a Shopify plugin that we use. It's called Loop. And it plugs into... 

Well, actually, it doesn't have any integration with Discord. So we do that a little bit manually. So it has the customers themselves, like their profiles. 

And then we work with a VA in the Philippines who make sure that we follow up with them. We have an email flow for people who get that tag on Klaviyo

But a lot of people, they don't really... 

Sometimes they don't check their email or whatever, so we have somebody following up with them to make sure "Hey, by the way, please join this because this is where all the good stuff is." And so that's happening. 

And then after they join, we also make sure that they understand all the different features and benefits of a membership. 

So we let them know, "Hey, you can sell your stuff in our community. Buy/sell/trade, you can [do] whatever. We have exclusive gear or whatever." 

We let them know what the benefits [are] so that a lot of people... 

They typically fall off if [they] don't know what they're buying into. And so we want to make sure like, "Hey, this is it. Please let us know if you have any questions." So yeah.

Chase Clymer  

That's the developer in you there. It's preventing churn by answering questions and forcing adoption. (laughs)

Yong-Soo Chung  

(laughs) I guess so. Yeah. Yeah. 

Chase Clymer  

Awesome. Let's... 

Before we go here, let's talk a bit about your podcast. 

Let people know the types of interviews you're doing and where they can go to check out and hear more from you.

Yong-Soo Chung  

Yeah, so the podcast is called First Class Founders. And essentially, it's a place where I want to share my lessons and everything that I've learned over 8 years. 

And I have a very specific philosophy on how to do business and that's been just like... 

It's obviously changing all the time, but I just feel like there's a lot of misinformation out there in terms of how to start a company. 

For example, I don't believe [that] you need to raise funding for anything unless you're building rocket ships or something crazy like that. 

But yeah, it's a place where I share my lessons. And it's been a fun journey so far. I launched it in November and it's always fun to grow a new project. 

So yeah, firstclassfounders.com is where you can find the podcast. 

Chase Clymer  

Awesome. Now, is there anything I didn't ask you about today that you think would resonate with our audience? 

Yong-Soo Chung  

I think if you're just starting out, then the important thing is don't spend too much money or too much time on something that doesn't have initial traction. 

And so just like how I did the initial testing with buying stuff off of Amazon, it's always good to test things first before you buy a lot of inventory. And so that's one thing that I would say. 

I think consistency is also really important. 

So we have our weekly gear drops as our consistent...Our marching, 20-mile march type of thing. But it's... 

It can be… 

Consistency, it doesn't have to be every single week. It can be bi-weekly or whatever. But over a long term, it should be more or less consistent. 

And I think that's a really important thing, because your customers expect... 

When they sign up for your email, they have expectations. And so if you don't send them an email for a while, they're not gonna remember you and they're not gonna care. 

So you need to make sure that you nurture that relationship. 

So yeah, that's all I have.

Chase Clymer  

Awesome. Thank you so much for coming on. If I want to learn more about the products at Urban EDC, where should I go?

Yong-Soo Chung  

Yeah, so it's urbanedc.com. And you can also... I'm also on Twitter @YongSooChung. Y-O-N-G-S-O-O-C-H-U-N-G. 

So if you want to hit me up there, I'm also available.

Chase Clymer  

Awesome. And we'll make sure to link to all that stuff in the show notes. Thank you so much for coming on the podcast today.

Yong-Soo Chung  

Thanks, Chase. Appreciate it.

Chase Clymer  

We 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. 

You can subscribe to the newsletter at honestecommerce.co to get each episode delivered right to your inbox. 

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Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.

Until next time!