Could You Invent The Next Snuggie? Find Out How With John Hurley from Allstar Product Group

How do you make business problems disappear? Wrap them in bacon. For business owners, marketing execs, and anyone trying to grow your business, pump your profits and make more while doing less. Welcome to Bacon Wrapped Business with Brad Costanzo. Sizzling hot business advice guaranteed to make you fat profits. Every week our chefs will serve you proven recipes for ramping up your revenue. Now here's your host, Brad Costanzo.

Alright, welcome back to Bacon Wrapped Business. This is Brad, and if this is your first time ever listening to the podcast, I want to let you know that you can subscribe. If you're on itunes and you found it there, just hit that little subscribe button and you'll never miss an episode. If somehow you found this on the website, the blog, and you're listening there, just click the button and if you're using Apple, you can subscribe right there. And if you're using Android, we're on Stitcher elsewhere. So just to let you know that there's a lot of shows that I do, but every single one of these shows are with people that I interview that I am personally curious about. I don't interview people just to fill up the itunes space with air and I don't do traditional interviews. Every single person that I talk to is somebody that I have a very personal curiosity and desire to learn from because they're either doing something that I want to know how to do or they have a specific knowledge that I think can be useful to you as well. And today is no different. I'm going to welcome John Hurley from All Star Products Group, who maybe you're familiar with All Star products or at least you're familiar with some of the products they've launched. They use direct response tv, also known as infomercials, to launch consumer products. But more than tv, they also use retail, Internet, social media and PR to launch and integrate these products into our lives. You may be familiar with some of their brands, like, well, Snuggie and my favorite, the Bacon Bowl. I haven't personally used it, but for obvious reasons I'm going to like it. Now, John Hurley worked on the creative team where he developed many of the infomercials you see on television and then the direct response department where he worked closely with the web and TV vendors to run their commercials and launch these brands, many of which, as I've already mentioned, have become household names. It's John's job to find the next big hit, potentially the next Snuggie. My former guest and now friend, Stephen Key, who you may have heard on a Previous episode, who's a renowned expert in licensing, introduced John and I and I asked John to be on the show so I can figure out what it takes to launch a household product to a truly massive audience. You'll want to listen to this because maybe you have an idea now that you could take advantage of or maybe hearing what it takes to create one of these ideas spurs one that could quite possibly change your life. Who knows? But we're going to find out. I'll be asking John a lot of questions that I want to know and I invite you to listen closely and eavesdrop on the conversation. Now, I personally have experience with most of the digital and Internet channels of E commerce, but this is a pretty new area for me. So without any further ado, John Hurley, welcome to bacon wrap business.

Brad, thanks a lot. Thanks for having me.

Yeah, absolutely. Man, this is going to be fun because, you know, I've interviewed an expert in direct response and drtv in the past and some of the folks who've listened may have heard my interview with Ron Lynch. But I want to ask you some more questions as it really applies to, you know, what it takes to come up with the idea, where you find these ideas, what it takes to really make it in drtv. And more than that because I also realized that it's much more beyond just TV now. It's a fully multi channel marketing space, but I could spend a lot of time tell me your backstory, tell me where you grew up and everything else. I want you to tell me a few of the surprising or inspiring success stories that you've been privileged to see over the years. And working at All Stars, what's been some of the cool things that you've got to be a part of.

So it's a good question. We're in a space where we're trying to find a needle in a haystack. We're in an industry where.

You'Re trying to get someone off the couch to order something while they're watching TV where they're not in a buying mode and then also to push to run that commercial, earn enough money back and sell enough products at retail. It's a very difficult thing to do, especially again when they're not in that buy mode. So we're looking for items that are unique, solve a problem. And one of the really unique and neat stories I've been a part of, actually you mentioned Stephen Key, one of his students, a good friend of mine, good friend of mine now, been working with him for about four years actually had an item. He listened to something similar like this, a podcast, just an informational presentation about what we do and what we look for. And he had this item, it was great. It was called Clingo at the time. And, you know, it was sitting in a retail box, and it's just a neat item, and you just couldn't. You didn't know what it did, you know, sitting in a box. And he said, john, I need to all start to tell this story. And if anyone here is familiar with, or anyone listening is familiar with Clingo or now Gripco, it's a sticky car mount. Cell phone car mount.

And oh, yeah, I absolutely. I had the grip go, yeah, yeah.

I mean, you would never know by looking at a box. You'd probably walk right by it. And that gentleman brought us the item and said, I need you guys to kind of, you know, to really tell the story, show the magic. And he sent us a product video in, and he's going through all the criteria that we went over. And one of his demos, he actually took his phone, stuck it to the grip go, shook it out the window, and attached it back to his dashboard or to his windshield. And without the phone moving, it was that aha. Or that wow moment that really grabbed All Star, you know, myself and the team here. And we actually ended up using that same exact demonstration on the commercial. And here we are millions of units later doing very, very well. So it's a. Yeah, I mean, you see those success. You hear those success stories all the time. You know, it's very fortunate I get to work with them hand in hand. It's really neat bringing a product from maybe selling a few thousand a year to mass market and selling millions on the shelves at every major retailer.

That's awesome. So what was his background before? Was he just a kind of a little tinkerer, inventor? Did he. You know, what was.

He has a background in lice, so inventor, product developer. Really, really creative, smart guy, and just had a background his whole life in developing items anywhere from kids toys to kitchen housewares to obviously an auto item, which we have now. But, yeah, he's an inventor, product developer. Just a really creative problem solver. Yeah, I think that's the key for direct response. It's having products that solve a problem. You know, we. Going back to what I mentioned before, trying to get someone off the couch is difficult. You know, you're. You're probably at the end of your workday, the last thing you want to do is order something off a company that you don't know of. But if we're solving that problem for you and we're making it worth your while, that's what gets those people to get off the couch in order is that problem solution.

Right. So All Star, would it be safe to say that most of the products that you guys sell, they're generally like household either I hesitate to just say household products because obviously this one's a car product, but they're general consumer products, relatively lower priced. What would you say is the price point? The minimum, maximum. That or I guess is the sweet spot for making it with like All Star or just in drtv?

Well, it's a good question. There's two forms of really direct response. I mean, there's long form and there's short form. Long form meaning those 30 minute infomercials on Sunday morning, you know, or whenever they air. Right. Those really are the shows.

Yep.

Compared to a short form spot where it's just a two minute infomercial. So short form, since you have limited space to sell the customer, sweet spot is anywhere between 10 to, let's call it $29.95, maybe up to $39. The long form though, obviously with a real true 30 minute show, you can really sell the customer and try to push that price point. You could go 100, couple hundred dollars, three or four easy payments of 40, 50 bucks, something like that. That's more common in long form.

Okay, excellent. And then where do you guys typically find your ideas? So like, do you, does All Star have their own product development department that you guys are coming up with potential ideas or are you working exclusively with the population out there of inventors and marketers and product developers, etc. To just try to help them bring their ideas to market? Or is it a mix?

No, we wish, you know, we're out there going to trade shows like anyone, just trying to meet and greet and also trying to see what's out there. But I mean, really, at the end of the day, we rely on our partners, our product sources, our inventors, our product developers to bring us their items. You know, we're great marketers, we're great at pushing retail, but we do look to, you know, the outside. We don't, we don't really develop our own products here. I mean, we're fully capable of taking an item that if we need to change it and you know, maybe if we make a different color, maybe make it, you know, do something a little bit different, we're fully capable of doing that. We do have in house development and Sourcing. But we really do rely on outside sources to bring us the item and kind of start us here, which is why, you know, I'm so excited for this conversation today because, you know, the industry is so unique. We're looking for such a unique item. I know there's a lot of great mines out there, a lot of great product. A lot of great products that came from those mines. We just need to find them.

Yeah, it's all outside.

That's awesome. And this is spurring so many questions. I'm trying to get to them all.

How do you know? Okay, obviously, you mentioned the powerful demonstration, right? So that's the home run. Whenever, you know, you've got a powerful demonstration and direct response that speaks. You know, that's probably 80% of it, right? Like, okay, I can get somebody's attention on this, and I can make them want it. How do you know? Because there's a lot of products out there that a lot of us have seen that. We usually either have one or two reactions, which is, oh, my God, why didn't I think of that? That's genius. That's amazing. That's brilliant. I would buy one of those. And there's other ones. Like, I can't believe that they're actually selling that. And sometimes they do. Incredible. The Snuggie is a great example of. It's a robe turned backwards for the most part. And it just killed it with the right kind of marketing, which I love. But then how do you know some other stuff is innovative enough?

Such as? Okay, so I'm flipping through your products right here, right? I don't even really know, but. Or maybe you can even come up with one. What was it like a product that you just. You're kind of even baffled by its success, but it was really successful. I don't hate to put you on the spot here, because I didn't put. You know, nothing made it come to mind. You know, like, okay, a great example. I don't know if the bacon bowl is a good example.

I have. I think. I think I have one. The Forever Comfy seat cushion.

Okay.

It's a gel. It's a seat cushion with the gel core. I mean, a really quality product. Great product. Soft.

And I think it shows the power of direct response. It shows the power of prom solution. I mean, looking at it, you would never know. You probably say, oh, that's just like a million other gel seat cushions. Or not even just a cushion out in the market. But it was the commercial, it was the creative behind it. Kind of explains the customer. What makes this different? It's the gel core. That's what makes it different. That's what makes it more comfortable. That's what makes it bounce back. That's what makes it durable, keeps you cool. Right. So it was. So, yeah, so it's a matter of looking at something and saying, okay, it has all these features, but can we play these features up? Can we talk about these features in a more constructive way to really sell the item? And, yeah, I mean, I think looking at it when I first saw it, I'm saying to myself, God, that, that, you know, we have some work to do. But with the creative and our team here and the production company coming together, I mean, there's so many times after we see the commercial, we're like, you know what? That looks great. And you know what? I get it now. You know, I understand it. And, you know, they're clearly explaining the product. So if you had to ask me one example, that'd be it.

Nice. You know, it kind of makes me think of. You've seen Wolf of Wall street, right? The. That scene where he's like, sell me this pen. What it really is. You can take an ordinary object and when you know how to market the features and benefits and do it the right way, you can really sell anything. So I wanted to bring that question up, one, to remind me not to overcomplicate it, that sometimes a simple product can be, you know, sold correctly, can be a mega hit.

Yeah, I mean, I think.

It'S getting harder and harder just to sell that ordinary item. I mean, one of those, you know, one of our biggest criteria for an item is it's got to be unique. You know, if the consumer feels like they could buy if they're watching a spot, right. At whatever, let's call it 3:00' clock in the afternoon, 9:00' clock at night. And they're. They're saying, oh, that looks cool, but, God, I think I could get that at CVS when I go there tomorrow. Yeah, you know, that's, you know, we're trying to gain that response. We're trying to make money back on TV so we can then run more media down the road and push the retail side of the business through there. So that uniqueness is so important. It's something that we can't stray away from. So those simple products, while they're great and we can play them up and.

Talk about them, there has to be something there to.

Yeah, there has to be a unique selling point. And at the end of the day, you know, two minutes doesn't sound like too much time to talk about something. But if it's not unique and doesn't have this magical feature, two minutes forever.

Right.

It's pretty long.

That's true. And you know, and I know this from talking to some other, you know, other people like everybody from Steven to Ron to, you know, whatever, that it doesn't necessarily have to be a unique product, but it can be a unique twist on a product. It can be a unique feature of an existing product, like many of these things are.

Right. It's the pitch. You know, sometimes it's even as far as, well, that's being pitched to do something outside. Well, how about we bring it inside? You know, wow. You know, it just, it could be as simple as that and kind of going off that a little more. Yeah.

I mean, there's thinking laterally and thinking how, you know, if.

Yeah.

How could I improve this, change this, make it use in a different way kind of, you know. Okay, so let's go on that thread of thinking. So let's say I think of. Oh, we'll use a good. I mean we'll use that same example like the forever Comfy one or anything. Any product. So I've got this idea for a product. First question, at what point do I come to you, do I have to have a prototype of it? Do I have to have a patent? Do I have to have all of this, you know, super locked down, intellectual property protection or you know, what, what do you see most of the time? I mean, obviously you can do that, but it's super expensive and there's provisional patents and etc. Etc. But what, what's really needed.

Yeah, so the, you know, we do require a prototype and it's. And don't get me. I'm not saying professionally boxed up perfect. No, just a proof of concept prototype. I mean if you have that, that's great.

A drawing won't necessarily.

Yeah. So drawings and kind of even a cad usually not enough. Yeah. Some kind of proof of concept. Just because, you know, we're evaluating a product, whether we're going to invest in this product, we need to know if it's going to work and kind of kind of go down the road of is it going to. Is going to perform, you know, is it going to fulfill the promises that we make?

When you guys see so many, so many pitches and ideas, I'm sure that, yeah, I mean, if you just looked at drawings all day or concepts, you, you know, it'd take forever.

I Mean how many drawings and concepts you look at sound great. Yeah, exactly. Until they're finally put into practice and there's something there, it's, it's really hard to evaluate. So, so some kind of prototype. And I say even as far as, listen, if you can make it, build it, we understand that it's not finished. We understand we might have to finish it. Work with you on finishing, that's fine. And then from an IP standpoint, there's no requirement to have any patent protection whatsoever to work with All Star. We do sign non disclosure agreements. So as far as your product being safe here, it's not leaving, you know, it's not leaving this building, it's not leaving my desk. So we do evaluate products that have no IP whatsoever. You know, we. And if it does go to retail and it goes down that road, you know, All Star works with you to at the very least get a pending on there so that down the road you can also tackle it as well. But as far as ip, no requirements there, you don't have to have a pen. It's great if you do. And as far as prototype, nothing crazy finished, but we do need to show some kind of proof of concept.

Okay, that makes sense. So I've got my idea, I've got a product and it's, I think there's something unique to it. What's kind of the, what's the process look like from. Okay, so I contact you and we'll even give people, if they have an idea, we'll give them the ability to do this at the end of the show. But they, let's say they contact John Hurley and they, you know, you guys start a conversation, set up a meeting, the kind of. That works.

Yeah. So, you know, I asked and yeah, we could, we could talk about this later. But you reach out directly to All Star. You could ask for me direct and we just have a conversation. You know, I kind of get into, you know, we can look at the item together. I'll go through, you know, the category history, kind of why we like it, why we wouldn't like it and really from there just kind of learn about the item fully. So I could, you know, so I can fairly evaluate it and just explain the process as far as, you know, the timelines that we have and then take the item here. We meet weekly on new products. So I'd lump those into our meeting and we would discuss them as a team here.

Yep.

Everything is, you know, everything is group based. You know, we, you know, I act as a funnel here. Obviously, I need to evaluate and make sure they're right for us. But the real serious items we talk about as a group.

Okay.

I mean, we get to that point, we talk it over, and then I'd get back with some. With feedback, whether positive or negative. You'll hear from us, no matter what, personal feedback on your item as far as if we're going to move forward or not.

Okay, so what about people who. Because one of the easiest, especially from my perspective and that of a lot of my friends who, you know, in E commerce, that it's a lot cheaper and easier just to, you know, just to start selling some stuff online and seeing if you've got a market there. Is that. Is that actually preferable if somebody comes to you and says, here's my product, it's good, I've got some sales online, here's what I'm doing. And now I want to use you guys to scale versus people who are wanting to start with direct TV and all this other stuff.

Yeah, well, I mean, I think from a product, from an inventor, from a product developer, from a creative person, I think having that sales history is extremely important, whether you're going to direct response or any marketer or any kind of licensing route. Right. You're proving to someone that there's demand there. I mean, that's what we're trying to figure out. Is there going to be demand? If you could say, listen, I sold 5,000 of these over the course of yada yada, or I sold out on HSN or I sold out on a catalog, whatever it is, or Home Shopping Network, whatever it may be, that's helpful, certainly helps your case, certainly provides a little more information to your product and kind of proves to us that there's somebody home. But at the same time, though, I would never discourage someone to come to us direct with their product because we can evaluate based off of what we're looking for pretty easily. We're great at evaluating items and if we think there's an opportunity there, we'll go after it either way, whether it has history or not.

Okay, cool. So then let's talk about probably the big one, which is, hey, man, I don't have hundreds of thousands of dollars to fund this infomercial and hope on a wing and a prayer that it works. Well, what does the. You know what, what kind of financials are necessary? What kind of structures can be put in place to help somebody who's got a great idea but isn't flush with cash to get this off the ground? Because I Mean, we all know creating a high end infomercial can be pretty expensive. I mean, into the hundreds of thousands of dollars. Maybe $50,000 on a, on a shoestring, maybe even cheaper than that if you're really good. But let's talk about the, what the numbers look like and what's possible.

Sure. So every deal here at allstar is a licensing agreement. In other words, for the lengthy agreement, the product source, the inventor, the developer will allow All Star to market, distribute and sell their product over that time of that agreement. There is no investment whatsoever from our partners. The value that they hold is the product itself. So in that licensing agreement, we pay a royalty, a percentage of every sale. So you will literally never pay All Star a penny. We end up paying you royalties quarterly from the time that the product's being sold, both at retail and on tv.

Okay, excellent. Because that was one of the things I wasn't even sure about because I know you can find direct response agencies to say, I want you to produce and market and all this and I'll pay you to do it. But you guys don't operate like that, Right. Everything's a licensing agreement.

Yeah. So we are a true direct response company through and through. Cool. We're a 60 person company in Westchester County, New York. Fully full creative team here, merchandising, obviously, direct response. We source, we manufacture overseas and we have our sales team here selling. So we do everything from A to Z.

Cool. So this is literally, this is for, this is ideal for the person who has the idea, can get it prototyped, can spend a little bit of money on. Yeah. Getting the prototype up, maybe testing the market, just getting it going. But once it's ready, they come to All Star and then, and if it works, they just collect checks.

Yeah. We're a one stop shop that invest in you. That's great. We're not asking for a penny, you know, we're not saying, oh, it doesn't work. You owe us the xyz. You know, there's something, there's. But unfortunately there's a lot of those out there. You know, we're one of the few.

All the risk is on you.

Yeah, we look to, we understand that and you know, we're gonna, we're gonna go after it. The value that you hold is your product and we're gonna invest in it.

Okay. And then there's probably, you know, various performance clauses to where, you know, the IP reverts back to me, the developer, if you guys don't achieve certain goals, etc. Yeah.

There's. So there's royalty benchmarks, minimum royalty benchmarks that are outlined, the contract, you know, that protect the product source, the partner. There's. If there's one thing I want to get across to everyone and I think it's important, especially when you have a product and you kind of have your, you know, it's like your baby, right? It's your kids. You know, we're as transparent as they come. I mean, there's really. We have tried to involve every one of our partners as much as. Really as much as they want to be involved. You know, we're open book. You know, there's not. There's nothing we're going to hide. So as far as royalties, you know, we pay them. You could put you on the line with our cfo. He'll run through those with you, he'll explain those to you. And from a creative standpoint and from a TV standpoint, in a retail side, you know, we provide updates as far as what's being sold, where they're going, developing the product, making sure it's perfect. You know, we're going to ask you for your invoice, your input. We're also going to ask you for creative input. So, you know, we almost require participation from our partners and we're happy to show what we're doing here.

Nice. And then I know that a lot of people that I've talked to who aren't really familiar with licensing get a little bit shocked by the royalty percentages or the range, and they think that that's. It sounds low, but can you talk about what the range typically is for a. And I know this kind of depends on multiple factors, but what can people typically expect if they come to you? They've got a good idea. I mean, you know, this isn't set in stone, but is there a range of royalties that they can expect?

Yeah. So I would say I have to give you a range. Let's just call it anywhere between 2 to 6%. Somewhere in that range is that of gross sales. So that's on. Yeah, so that's on the retail side of the business. So if we had this conversation 10, 15 years ago, you know, most of our business would be done on the floor and you know, just kind of traditional direct response marketing. Right. But now if you go to every major retailer, there's as seen on TV sets. I mean, we're really selling everywhere, even in places that don't have those as seen on TV sets. So most of our business is done at retail. So, yeah, that's that's on the, that's on the wholesale side. So for example, you know what we sell the product for? Every time we sell a product at that price, you receive that percentage that royalty.

Great. So you sell the pro, you sell my product to Wall, you know, CVS for $10, they retail it for 20. I'm going to make between 2 to 6% of the 10.

Correct.

Okay, yep. And then what about on any sales that come in through.

Like, you know, the actual commercials?

So there. So, and that's.

So the directory side, the direct response side, you know, we're on every direct response campaign actually losing money. Every direct response marketer, for the most part see, they're trying to break even or trying to lose as little as possible on tv. Really what it is, it's a form of advertising. I'm not going to say we don't pay royalties on direct response, but we can certainly, you know, we can certainly negotiate those.

That's not where the money's made.

No, no, they're going to be much lower there. Those royalties are much, much lower. That's why we pay the higher percentage on the retail side. That's where, that's where our business is.

Right. And that's one of the things that I, when I started studying drtv and just the entire industry that I this, that was kind of the big surprising thing to me is that the majority of the money is made by using DRTV to launch a product and get it, get brand awareness so that it can go into retail channels a lot easier because that's what the cash is created.

Yeah, I mean we hope, the idea is, you know, we hope we're gonna get some orders on tv. Right. I mean that's obviously why we're there. But the hope is that when they get to retail they say, ah, you know what, I remember seeing that last week and you know what, I kind of wanted it. Here it is right in front of me. They pick it up off the shelf and they buy it. So we're hoping that we build that awareness and that people are familiar with the product even before they get there. And when they see it, it's a no brainer.

What about when they buy online? Because I know that the industry shifted quite a bit to where 10 years ago. You know, I would imagine it's like 70, I'm making these numbers up, but 70% of the, you know, sales would have been from the phone. But now I would imagine it's 70% or more is either online or in retail stores versus on the phone.

Yeah, so we're definitely. And you know, so each. So that royal. So going back to royalty real quick. When I say doctor, I'm sorry, I didn't specify direct response. That includes both TV and the web sales.

Okay.

They're both of them are just small part of the business, I think going. And if we're talking about, you know, is it more web, is it more tv? It really depends on the product. It depends on, you know, the target consumer. If it's an older item, if it tends to skew more, you know, just a little elderly maybe, you know, your phone's going to be higher than your web. But if it's a hot item like hot buns or hot hues, you know, mobile and web is going to be much higher than phone. Phone. It's just kind of the customer, you know, what are they familiar with doing? What are they, you know, what have they done in the past?

Okay. And so the royalties there will be in line with the ones on the tv. So they're not going to be as much. And I bring this up not only just to satisfy my own curiosity but for, to manage expectations because I guarantee that you guys deal with this where you get a product developer who thinks this is the next 100 million dollar product and then you tell them I'll give you 2 to 6% or whatever and they think, oh well, you're robbing me. And they don't really understand a. What all goes into it. And they also don't understand money that can be with a hot product when they don't have to do all of the other stuff that you guys have to do.

Well, we're talking, you know, so we're not, we're looking to sell millions. Yeah, we're going to invest. We're looking. So that's 2 to 6% per unit on millions of units which turns into a real number. And as far as. Yeah, they. We get. Yeah, and you're right, we get it all the time is, you know, John, 4%, 3% is that, you know, that's not fair. Well, you know, yet there's not only the manpower here, it also goes into a campaign. But you know, you have to remember at the end of the day we're going to retail with a hunch. Right. We're going knowing that we're getting response. But at the end of the day, the consumer's king. When you get there, you're not sure what's, you know, we have formulas in place that say we're going to be okay. But it's never set in stone. So before you get there, you know, you're spending, you know, hundreds of thousands, if not millions on media just to build the. Build awareness. And then since you're building that awareness and you get to retail, you want to make sure you have enough product on the shelves to sell as many as you possibly can. So let's just say you're making half a million units to start, you know, at a. At a cost of goods of couple, you know, whatever it is.

It's a lot of startup costs.

Yeah. So you're in, you know, without really having real substantial sales, you know, millions of dollars. And that's the risk we were willing to take without really giving you, you know, without having our partners or any of our product sources take any of that risk whatsoever. So hence that percentage. But at the same time, we're more than happy to pay that percentage on millions of units. And that turns into, like I said before, a real, real number.

Yeah, that's got to be fun to change people's lives with the royalty checks that come in from kind of an idea. What can people do to, you know, what can people do with their product before they're talking to you? Or what are the. What are some of the ways that people can get the higher end of that royalty percentage? So the, you know, the 6%, is it based on the product? Is it based upon the fact that, hey, I've come to you, I've already established that I've sold, you know, several hundred thousand dollars worth of this on E commerce channels, and now I want to come to you to scale it up, you know, what, what helps give that.

Sure, that's a great question.

Yeah. So it's. How do you. I guess, in other words, how is there less risk on All Star's part? Right. So, yeah, if there's. So if you're fully patented and we already know that, you know, again, we don't require it. But that's great, you know, that's just more protection for All Star if it's, you know, like you said, if you've already got. You already have finished prototypes working that are, I don't know, let's just say it's electric and it's UL approved already. I mean, that, that investment's already been done and you've sold thousands of them. I mean, how much that saves in both time and, you know, investment on All Stars part is huge. So it's those, you know, so when you're looking at. You're saying myself, you Know, how are you lessening the risk for All Star? I guess in a way, you know, how are you kind of helping us out in a way to get it to market even faster. So if you have those things in place and it's, and it's a great category and it's has some proven success in the past and we just feel really strongly about it, obviously, you know, those royalties could go higher.

Excellent. Okay. And that makes sense.

So have you seen, I was just curious about, you know, the types of product developers out there. Do you guys see the 8020 rule in effect where 80% of the products out there are being developed by 20% of the product developers and you know you're going back to the same group every time or is it really just all over the board.

A lot of like one shot deals like hey, this guy had a great idea, he did it, versus people who actually create do this for a living and pumping.

I could tell you from the context of All Star. Yeah, and I'll give you it's going to sound cop out, but it's true. It depends year to year. I mean, honestly does there's been years where 80% of our product has come from inventors and product developers that might have one or two hits. And there's other times where those have come from. Just even some large companies, large cookware companies who look to partner up with an All Star to bring those products to market because again, they're not really in the direct response space and they might have a great kitchen or cookware item or auto item that demonstrates really well and they just want to kind of increase the revenue stream and have us pay them a royalty on their product. So it's really a year to year thing. But we have a lot of great source that bring us multiple products, I must say. And I think goes back to, you know, the relationships that we build here, the transparency and just how it's a nice working environment, it's a good group of people here.

Nice. Are there any trends you're noticing now going forward? Whether it's in the product side, in the marketing side and the distribution, like the, you know, what's new, what's changing in the market that you, you've seen because you've been doing this for a little while.

Yeah. So I think from, from a direct response standpoint, you know, the higher price point items are actually gaining more traction.

We're noticing that we're able to, you know, get the same response we would on maybe on a, on a less expensive item at a Higher price point, which is encouraging for us. So we're looking into those categories, into those products that, you know, might cost us a little more. Like I said before, it was, you know, rule of thumb a couple years ago was that 1995 was probably the highest in short form. But now, as I mentioned before, $29.95 is growing. And for that reason, so, you know, we're seeing price point changes. And like anything, as the consumer evolves, we have to evolve also. And I think, you know, for example, the Internet, I mean, the reviews on products, making sure people are happy, make sure they function. It's becoming more and more important. Not to say we wouldn't before, but, you know, there's, you know, social media and reviews and, you know, the way people go about their business can change your product in a heartbeat. So it's kind of staying on top of, you know, the product on top of social media. It's really going that way. So I guess, you know, those are probably the two trends I'm seeing.

Okay, excellent. Now, a couple other quick questions here. Typical cost of the product to the. What's the typical markup to make this work? So product costs $5 to create. What do you typically need to sell that for? Or what's the, you know, what's the, you know, the kind of the benchmark markup you're looking for? Is it like four times? Five times?

Yeah. So rule of thumb is any is, let's say five to six times. So for example, in the past, if it's a $10 item, we probably wouldn't want to go above $1.50, something like that. As far as, you know, manufactured in bulk, you know, same. And obviously as you go up, that's the same thing. So for 1995, you know, you're talking 3, 350 somewhere around there. And again, manufactured in bulk. And, and that's the thing too. And I don't want anyone to be scared away saying, well, I don't know what it's going to cost to make. Well, I don't know if, you know, I have to get a quote now. No, we.

That's what you guys do.

Yeah, we're pretty good at looking at something saying, I think we could do that. And kind of at least knowing we're in the ballpark. And if we have to kind of go down that road to figure it out, we will.

Okay, so here's the part that I really want to know about because I've always been curious. And this is the things we don't see. So we see the commercials, we see all that stuff. And you know, coming from a guy I've been in the, you know, the direct response online side, I know the importance of a back end, but I never see the back end of most of us who aren't buying the, you know, the products on, you know, via the phone, et cetera, aren't seeing that. Do you guys do much or can you. How much can you reveal of the back end marketing that All Star does? Because when you get somebody to call in or buy online, now you've captured that information, it's not just being sold at retail. And there's a fortune in back end marketing, whether it is from ethically renting the buyer lists, which is commonly done, versus cross selling a lot of the other products you guys have, whether it's telemarketing and getting on the phone or doing that via email and direct mail. I mean, do you. Is there much of a back end marketing component to like All Star or is it we do all of our stuff up front in order to get us into retail and get out of the direct to consumer as much as possible?

No, there's certainly a back end marketing aspect to all of our campaigns. Most of it's items that are related to the main product. Okay. At a great price. So if it's a personal care item or let's just say it's a foot care item.

Yeah.

And this is completely making this up. But maybe we'd sell like a foot bath with it. Right. If it makes sense and to kind of go together with that way. It is, it's definitely a big part of the business there and. Yeah. And also pushing some of our items and trying to sell our items on the back end also at a great price. It's. You're trying to build a revenue, just trying to reach. If you have the consumer there, it just kind of makes sense to see if they were interested in more of your items that might make sense. Sense for them.

And do you do that? Yeah. And do you do that past the point of sale? Like do you do that once they're, once they're a customer? Like Will, I've actually done this before. Like I've, I've ordered something. I can't remember if it was online or over the phone so that I could just snoop and see if I can get on their mailing list or, or their telemarketing list. And I didn't, they didn't do any back end marketing. I can't remember what it was And I was a little disappointed. But like, do you guys do anything past the point of sale, such as, you know, do I get direct mail, Do I get.

Any phone calls?

So we've, we've certainly, I'm almost certain we've explored it, but it's all opt in. It's not, you know, you have to totally, you have to prove it totally ethical.

Yeah.

You have to be something. Yeah, exactly. You have to be fully prepared and fully, you know, you have to accept that option.

And we're talking to other marketers who totally understand the, you know, the concepts of the back end. So. And permission based.

It's also a big part of the business and I think the industry as a whole as far as a compliance standpoint and being user friendly also is at the forefront of that with editable carts and Amazon orders. I mean, we try to make the ordering experience as easy and as simple as possible. There's no surprises. Yeah.

Nice. Excellent. So.

I'm crossing off questions as I go, but this has been awesome. Are there any.

What'S a recent hit that you guys have had in 2015? Is there anything that's kind of stood out as a.

Fun or successful.

Yeah. So, you know, some of just a handful or just a few of them, you know, we're launching a few new ones. Some of them been on TV already, but some in the past. You know, you have your catch caddies, you know, which is kind of the. It goes between your seat, your center console and your car to catch your fries.

That's one that blows me away. I'm like, somebody thought of that.

Yeah.

And then they got it to market.

I mean I use it, I love it. I'm a car. I'm a, I'm a car.

Not.

I keep, try to keep it clean and I absolutely love it. You know, it doesn't, doesn't stick out. It's not ugly. It just kind of, you know, just looks, just looks like a, you know, it just looks like a, like it belongs there. Purse pouch, another neck that goes in between your car seats. You know, you mentioned before, Bacon bowl, eggtastic was big for us also and it continues to be. You know, I think when we bring something to market we pretty much. Not that we know, like I said before, because it's up to the consumer but pretty good idea. It's going to do well there because of the marketing, the way we push it and the way we sell it. So. Yeah. And you could check out all those products@allstarproductsgroup.com All Star MG. There's all of our rollouts. All of our products are listed there by year, so you can see them and watch the commercial.

Nice. Okay, I gotta ask you this because once more, I'm on your site. The perfect arch. The self groomer and massager for cats. Tell me that's successful.

Oh, it is.

People have to see this to believe it. Okay, so it looks like a, A wiry pipe cleaner that's made into an arch with like, probably wiry bristles and that cats can go underneath it and scratch themselves.

Right. I'm not, I'm not kidding you. I. It's. I. A friend of mine had one before we even did this and just absolutely, I mean, it's been a staple in their home forever with their cat, and it absolutely loves it. To the point where, you know, in order to get the cat to play with them, they have to take it away. I mean, absolutely loving it. Yeah. I mean, keeping their house clean. You know, the catnip goes in the center to make sure that they kind of stay, you know, they go towards it. But such a great item and demonstrated so well on tv and a real problem solver, you know, a true. You know, you could see the fur, you can see the hair on it. It's pretty amazing. And I'm watching it now on mute.

As we're doing this, and it is genius. But I mean, it's a overgrown pipe cleaner stuck into a cork board. And this is making somebody a lot of money.

Yes. Yeah. So it's those, I think, again, going back to what we talked about before. Right. It's a simple item, but with the. It is truly unique. You know, I not seeing it before. I mean, it's, it's unique, it solves a problem. And it's in a great category, which is pets, which to us is a category that has mass appeal. Most people have pets or majority do.

Well, let's talk about those categories. So there's pets, kitchen.

What are the cat like, how many categories? Is it too many to kind of rattle off or is it big primary ones?

I think, you know, some of the, some of the big ones for us are the autocad, you know, automotive, okay. Housewares, you know, any kind of household item, problem solver, you know, your personal care items. And also, you know, we've had a lot of success with, you know, personal care, but also targeted towards the teen tween, you know, early 20s, younger market with the hot buns, hot hues items. You know, we're one of the few marketers if the only one, maybe the only one that's been able to reach that demographic with, you know, the market that we have and the products that we're offering.

Yeah, because a lot of people ignore that demographic because they don't have as much money. Right.

Well, it's just, it's, it's, you know, traditionally it's those who are watching more tv. Right. Maybe the, it used to be maybe an older customer, the 40, 50, 60 year old customer. But we've been able to, with some of our targeted marketing and our social media being able to target that younger customer to really sell these items.

Right. Like I said, like hot jewels and hot stamps, like body jewelry and hair bedazzling things.

It's all about being trendy too. You know, you have to be ahead of the trend and be there when it's ready. You know, hot buns was huge. You know the sock bunch of sapang maker huge. Absolutely enormous.

That's so cool. So for my listeners, like I'm talking to myself on this, but like when you're thinking of ideas, take a look at what is already out there. I mean you could probably have a lot of fun with this. You know, grab, grab an item and think about how, how could I improve this? What else could it be used for? Think laterally, maybe get really high and do it. I guarantee you some of these things were, you know, were marijuana inspired. Like, man, I could totally use this pipe cleaner to scratch my cat.

Well, you know, it's about solving, go throughout your day and say, hey, listen, I, you know, God, I'm having this problem or what problems do I have and how am I going to solve it? In a simple, unique, kind of, you know, inexpensive way. And if those, if you get in that mindset and think that way, there's not a doubt in my mind we'd find a winner together.

Right. You know, the other, the other thing this kind of brings up, I had a recent episode with Greg Jacobs and some of the people listening may have listened to that. So one of the things he has done and he's started to teach some of his clients how to do is to use, to combine Kickstarter or actually Indiegogo and some of the crowdfunding campaigns with items that you can source overseas, like let's say on Alibaba. And he goes, the real key here is to find the, you know, look on Alibaba, do a bunch of market research, find out kind of what's hot and what fits these criteria and then think, okay, well if I'M sourcing this from the manufacturer. How can I take what they've got and improve it in a way, make it somewhat unique, put my own spin on it, more than just a private label, but not totally re engineering it, because if you're dealing with the manufacturer, often for relatively affordable price, they can customize it to the way you want it. And then he's saying to use.

He's also talking about thinking laterally. How can you create a.

How can you create something unique and different that you can then do in essence, like your own version of this at a much smaller level, which is get funded via the crowdfunding campaigns in order to take your stuff into the next level? I actually think this may be a decent introduction that I could make between you and Greg. Greg is a good friend of mine as well, because I know that he recently launched a training course on teaching people how to do this.

So his people.

This is just coming to me, so I'm kind of thinking out loud here. So his people have an interest in developing products and getting them funded via crowdfunding so that they can launch them into E commerce and retail, etc. But the one thing they're not doing is taking the next step like yours is they could have come up with a great idea. And honestly, crowdfunding is. There's a lot of intricacies to this, and you have to. Coming up with an idea is one thing. Initiating an entire marketing campaign, whether you're crowdfunding or Facebook advertising or whatever, is a totally different one. If you're interested, John, I'll make that introduction because I think the two of you guys would hit it off.

Oh, I would absolutely love that. Thank you. And I think you nailed it on the head. I mean, it's. Yes, the product is very important. Right. And then the product itself is extreme. You know, what problems it solves. And just having a great item is important, but it's also about the execution. You know, how do you, you know, getting it there, doing it correctly, having the retail relationships, having the relationships with anyone that, you know, anywhere where consumers are right is so important. And I think that's where, you know, the All Star comes into play. You know, we're great marketers. We're great. We can get a product out there, we can sell it, and we're excellent at that. We just need. We just need a hand from our. From our sources and from product people and creative people to bring those products here and kind of work together to bring it there.

Nice.

Yeah, No, I would absolutely love that introduction, I appreciate it.

Absolutely. Okay, so here is where myself and my listeners can continue to potentially help you. So the things you're really looking for, the ways that we can help you do your job better is obviously if you have an idea and you want to get in contact with you, if you. And we'll give that contact information here in one second.

Other ways that we can help you besides just introduction to people with ideas, are there any other resources you're looking for, partnerships you're looking for people you're looking to hire?

Anything out there right now that you guys are like, oh man, this is one of the things we're trying to find a nut you're trying to crack.

I think from my standpoint, it's product based, it's networking, it's meeting creative minded people, people that are in the business of product. So anything from. Yeah, so welcome. And there's also ways we could work together as far as if there's any networking possibilities of linking us up with anyone from an inventor, a product developer to even a larger maybe product development company or even a real product, consumer product company that might need help marketing their items. But from helping All Star, it's product based and it's also the networking and the people that we know here and the more relationships, the better.

Love to meet everybody, talk to everybody and see if there's a way, not only if they can help us, but if there's any way we can help them.

Nice. These are some areas I can hopefully help you with offline as well as any of my listeners who are intrigued and are still listening and want to see, see where this goes. John, what's the best way to get a hold of you?

Brad, we can.

What's your, what's your home address and your Social Security number?

My license number. Now, I think the best way, you know, there's two ways. I have no issue whatsoever with people reaching out to me directly via email. And I could give you that email address and we could. There's also another way. You could go to the website. It's all starproductsgroup.com that's all star mg marketinggroup.com so it's either All Star Products Group or All Star mg. It'll take you to the website either way. And then there's a simple My Invention tab. You click on that tab, go through the process and if you reference this podcast, you know, I see all those submissions, but if you reference the podcast, you know, I'll know it's coming from, you know, your group Brad's group and we go from there. But as far as personal email here at allstar, it's John J O H N H. So John H@Allstar, a l, l S T A R M as in Michael, g as in go.com so johnhlstarmg.com and again, just reference the podcast and we'll have a discussion and we'll go from there. Beautiful.

Well, John, I really appreciate your time on the show and I thank you. Yeah. And I appreciate everybody listening to this. Hopefully I fulfilled my promise of, you know, digging in and getting the questions that you probably had maybe without even knowing it because I learned a lot on this and I actually, I had no idea going into this if what model All Star followed. I like a model that it's a, hey, listen, we are, we are a one stop shop. We just pay you. You don't have to. We're not asking you to fund all this. Other things. That's, that's huge. And that's a, that's a tremendous resource for people to just know that exists. Because if you have an I, there's nothing more discouraging than when you have an idea that you think is really hot but you have A, no idea how to do it or B no money to do it. Or maybe you know how but you don't have the money. Or maybe you have the money but you don't know how and they really don't need that with you if they have the idea and they can get the ball rolling a little bit. Sounds like you guys are a tremendous source for them. So don't hesitate to use this as inspiration. If you have something right now, call John or go take a break. Go do some things in your free time. And while you're daydreaming, grab a product and think, how can I improve this.

If I've got this back Scratch pipe cleaner, whatever, what else can it be used for? And take a look around your life and think, because you never know where the next snuggie idea is from, which is quite literally turn a bathrobe.

Around. And you know, it's beautiful that we live in a time and an age where somebody can make, you know, millions of dollars off of that idea. So if this has been helpful for you or if you have any feedback for me, if you have any questions for me, you can email me directly@askbradakenrapbusiness.com let me know who else you'd like to see on the show. Let me know if I missed anything. If you have anything to add to this to me or, John, shoot me an email as well. And I dare you, I double dare you to leave a review on itunes that I will read and love and cherish. I dare you to do it. You know, see, I'm applying this psychology, John. I'm trying to get them off their butts to do it. We know how hard it is to get people off the couch and take action.

Exactly.

So I'm not asking for money. I am asking for love. And you can do that by sharing the show, talking about it with your friends, and sending me an email or leaving a review on itunes. Guys.

It has been a pleasure. And John, I look forward to connecting with you offline. To everybody else, I look forward to seeing you on the next episizzle of bacon wrapped business.

Thank you, Brad.

Thank you.