Episode 86: From Punk Rock to 450,000,000 Shirts a Year, Ryan Moor with Ryonet

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

Momentum in sales, it's like a winning football team. You take the Eagles last year and they got all this momentum and they lose their quarterback and they still win the Super Bowl because that's what that, that momentum creates. It's, it's unstoppable. It's amazing. So you're kind of really looking at what created this momentum and trying to replicate that again.

Ryan Moore is the founder and CEO of Ryonet, a business he started in 2004 after printing shirts in his garage for his punk rock band. Since that time, Ryonet has grown to 120 team members, over 30 million views on their YouTube channel, and they've helped more than 125,000 screen printing companies. If you could count the number of t-shirts impacted from one punk rock DIY screen print garage startup, you'd have to pass 1 billion and keep going. After starting and educating most of the screen printers in the industry and having a hand in over 450 million shirts printed per year, Ryanette continues its purpose of growing the garment industry through its new products, education, and ventures. In 2017, Ryanette co-founded All Made Apparel, which is a living wage and sustainable apparel brand. Ryan will be a keynote speaker at SKUCon in Las Vegas on January 13th, where he will be talking about how to catalyze and carve a new niche. You can learn more at skucon.com. Today's episode is brought to you by CommonSKU, the effortless business management platform that powers you to process more orders and grow your business. To learn more or to start your free trial, visit commonscue.com. And now I kick off our conversation with Ryan by asking about that punk rock beginning.

I got into the screen printing business as a screen printer, as a DIY punk rock screen printer, printing shirts for our own band, a very archaic, you know, on a wood press, curing them in the oven, taking a mobile press on tour, being on Warped Tour and having these other bands kind of say, hey, you guys make your own merch, that's really cool. Can you teach us how to do that? So got into the supply side of the industry through kind of filling a need in the punk rock space of providing screen printing supplies to other bands. I ended up starting an eBay store and then a website.

So, so, so really these bands would come to you and say they weren't just saying, hey, print me some t-shirts. They were saying, hey, show us how to do that so we can do it ourselves too.

Yeah. You know, the punk rock ethos is DIY, do it yourself. We can do, you know, the whole tour is about that. So of course people are going to be like, You guys make those? I mean, how much does it cost you to make those? Like, I don't know, $2? And like, oh my God, how much Taco Bell and beer and gas could that buy us? That could buy us a lot when you're selling them for $10 to $15 a pop. And it fueled 4 albums for us. It fueled a couple nationwide tours. We did it for 4 to 5 years, pretty much full-time, 1 year in high school and then 4 years out of high school. So I graduated high school in 2000. Ryan had started in 2004, same year our band ended up dismantling. Actually started an e-commerce website. My dad invested, you know, about $10,000 in, in a website platform. I built it in my bedroom. And from that point in time, we were one of the first online companies to provide— we didn't start a screen print supply company, we started a start screen printing company because that's who we were. We helped people start screen printing. And so we started a company that allowed it to be easy to access a kit to start screen printing. And really, you know, kind of carved our initial niche in that space. Grew very, very fast from a bedroom company to about an $8 million a year company in under 2 years.

You just passed a lot of territory there. In a couple of years, you go from punk rocker, probably living out of a van, eating Taco Bell or whatever you can subsist on, selling these screen printing kits to other bands, beside it's a business, you're obviously seen some trajectory of growth at this point and the band had dismantled, so you're gonna do something anyways. You're basically selling this business in a box, not to minimize it, but you're making it simple for folks to just pop up and get into the screen printing business. And you go from a flatline number in the beginning to $8 million in 2 years. There has to be some reason for that kind of a leap.

I think some of it was market conditions. I think, you know, we got every business, I think at some point in time has to get a little lucky, but they also have to be prepared to handle that luck event. It's a great thing from a book by Jim Collins called Great by Choice. You know, it's your return on luck. So we had a luck event in the fact that there was a lot of, the economy was pretty good. There's a lot of business needed.

What year was this?

This is 2004, 2005. Okay. So in the '90s and in the early 2000s, the screen printing industry was very commoditized and it was outsourced essentially. So a lot of huge companies went away, but there was still this local work that needed to be done, still this soccer team, still the band that needed shirts, and they didn't have enough volume to go to overseas and get, you know, wait a couple months. So that need and the good economy, I think, inspired people to look online, which was now becoming a relevant, trusted place to buy things, how to start screen printing. And we built an e-commerce site and SEO and pay-per-click marketing around that, around that topic. And really got in front of all the eyes. I started 4 companies initially. So one was a screen print supply company, one was a t-shirt wholesaler, one was a direct-to-screen or direct-to-garment, like a custom ink essentially, and one was an herbal supplement company, believe it or not. And so they were all e-commerce businesses, but the screen print company and the t-shirt company did the best. The t-shirt company I ended up selling and then reinvesting and basically focusing on the screen print. So our first stage growth was carving out that niche online through pay-per-click marketing and SEO marketing. And really just, I got a return on ad spend that worked and then just started pumping more money into it and then building good content based around that, that gave us, uh, SEO as well.

So you had 4 businesses running at the same time. So you had 4 horses in the race and one clearly began to pull ahead of the others. What's very interesting is that you didn't take the path of becoming a contract decorator back then, because obviously you got your start selling these kits to other punk rock bands. And good on you that you recognized that selling the kits themselves would probably be far more lucrative and I'm guessing less complex.

It's funny because people say that. They're like, I, you know, I want to start a screen print supply company. I want to sell supplies. It's insane. So we get, we get about $0.10 out of every shirt sold. That's our take. So yeah, we've grown to be a pretty good-sized company, a medium-size, you know, we're about a $50 million a year run rate right now at 10 cents at a time. So we touch about half a billion shirts a year through our screen. And that could be on a Nike shirt, that could be on an Under Armour shirt, that could be on the Little League shirt you see next door. But that's a gallon of ink that costs 50 to 100, it costs more now, like 70 bucks. That can print 1,000 shirts, you know? You know, it's a very small percentage of shirts, but there's a lot of shirts printed. So it's— it was just a different take on the market.

Take us from 0 to 8 million in a few years and then 8 million to 50. What was that time span like? And then what were some of the critical decisions you made along the way?

There's natural growth boundaries, and they typically, depending on the type of business that you run, they happen at certain revenue points. I see it in the— in the print industry. I'm not sure. You guys probably see something different on the promo industry, but in the print industry, The $2 million, the $1 to $2 million boundary is a boundary in distribution. E-commerce, we found our boundaries at $10 million and at $20 million. So once we got to—

when you say boundaries, you mean these are— you're hitting a wall in terms of your growth?

Yeah.

Yeah.

You kind of get to a point where you're like, okay, now we need a whole different type of infrastructure to be able to go to the next level. And it could be how you market, it could be what you sell, it could be the systems that you run things on. So the first kind of cap that we hit, and we hit it during a recession too, so that might have had some kind of play in it, was going from like that $8 to $10 million range, which we stayed at for a good 5 years. You know, it was very slow growth from $8 to $12 million. And what we did to change that was we really invested in education and distribution. So we vertically integrated a lot of things. We brought the controls into us. We started, we started to expand to different regions of the country. Country outside of the Northwest. We're, we're from Vancouver, Washington, which is a decent place for apparel, but as far as number of shirts sold, the population here is just not huge. You got Oregon and Washington. Um, and so we expanded to the Midwest, we expanded to California, which is the biggest market in the U.S., and then, um, we really focused on education as a need to, you know, basically help people learn how to screen print. So we were selling all these kits And we started making videos. And then when YouTube popped out in 2006, some of our customers started to put our DVDs that we would publish on YouTube and then started our YouTube channel, which now is one of the biggest channels in the, in the screen printing space. We have like almost 30 million views and 75,000 subscribers that is really centric to learning how to, you know, start and grow a screen printing business. And that really helped us at physical training classes. Virtual training through video and really focusing on helping our customers grow helped us get to that, that next stage.

Really focusing on helping our customers grow helped us get to the next stage. That's critical. But you're, and you're exactly right, the promotional products distributors typically have those same kinds of thresholds that they hit where they hit, whether it's $3 million or $5 million, where they have this choice to invest, reinvest back into the infrastructure of their business because what got them there to that point will no longer take them further because of the funnel theory. They're just trying to run too much through the same system and output. Output is not going to see significant growth.

Yeah, then it's what we sold. So when we started selling automated equipment, the ticket price went up. We went from selling manual equipment that has ticket prices.

I see. So before that, it was screen printing ink and smaller unit prices.

Yeah.

And then we started selling— so when you're able to capture, like, you go from selling just t-shirts to now you're selling the entire sports package, you know, where you're selling the bag, the backpack, the equipment, all— everything that player might need to, you know, run, you go from a $10, $20 sale to a $300 sale. And it's, it's a game changer. You're selling, you have the same client, you're just able to sell them more. So that helped us get to that $20 million stage. And then after that, it was really systematizing and investing in infrastructure, ERP systems, you know, e-commerce systems, you know, people systems, process systems, all that stuff. Along with product development and expanding the product categories has allowed us to continue to grow since then. But it's interesting, those caps and then the choices to stay where you're at or to invest, because when you invest, your profit goes down, the risk goes up. And, but it's always just like, I think there's some entrepreneurs that have that tolerance that just want to go, go, go, go. And then they just have that, they have a, they've been able to build a good team around them that helps implement it. Because you have the, I don't think, you know, there's people that are great about going, there's people that are great about dreaming, there's people that are great about doing. And so I'm really fortunate to have a team at Rionet that has helped implement and kind of build things around where we've been able to, to go and to continue to see that happening.

Often when I'm talking to successful entrepreneurs, they look back over a period of years and they're able to, because of the limitations of audio and because of the limitations of bandwidth in terms of people's attention, will truncate these stories down into this, I grew from 0 to 50 million and here's a few of the things that we did. Along the way, what's kind of lost in the storytelling are these low-water marks that were high-risk, highly emotional, and very difficult decisions. And I'm interested in this reinvestment topic for just a moment. Was there a moment when you hit that $10 or $20 million threshold where it was go for broke? You have this drive and this risk mentality anyway, but take us back to a few of those moments. Is there one that sticks out and what was the decision-making process like then?

Yeah, so 2012, we hit our $20 million mark. We're actually, we're about a $25 million a year company by this time. We were just not, we knew we had to have better systems. We had to have better product. We needed a better location. So in 1 year, we vertically integrated with a manual piece of equipment that we sold called Riley Hopkins. So we bought that company. We decided to change from selling the world's largest, you know, automatic press, which is an M&R press, and bring a brand new piece of equipment called a Rock, which was made in Europe, never been sold in the US before, but it was different. It was unique. It was technology driven. We invested in our ERP system called NetSuite, which is a cloud system that really is a big investment. And we moved. So that year was— we bought a building, we moved. So that year was insane.

We saw— well, the expense, the capital, the outlay that you had at that moment had to be huge.

Yeah, it was. It was like I saw our 12-month trailing, you know, profit go from pretty healthy to almost nothing, you know, because it was just an ERP system alone. You know, we're well in millions of dollars into this system, and that alone can cripple a company, you know. So that was definitely the mantra for that year was stay hungry, stay foolish.

Right. Steve Jobs. Well, you know, my friend Rod Brand also highly recommends entrepreneurs always look at this trailing 12. So you're viewing your trailing 12 for new entrepreneurs. You know, that's the last 12 months of your history. Was the business on the ropes at all at this point? Or now that you look back on it, of course you can tell the story pretty easily, but back then?

Yeah, it was, I mean, it was, we had to make some hard decisions at the end of that year that was basically like, we can't do all this. This is, this is crazy. You know, so we had to shut our LA branch location down, which was a good move because it was in the most competitive market, a very commoditized market and a market that we weren't winning in. Our business model wasn't working in. So we shut that down. We changed how we did that. And we made a couple other moves that allowed us to, at that point in time, I think I had 14 different companies and a lot of them were built as vertical integrations into this supply chain. That was another move that I decided to do is like, we have this one company that is literally like 95% of all this, 90% of all this revenue and it's driving a lot of revenue from these other companies. And what I would see in these other companies is those caps. A lot of those companies would get to the $1 to $2 million cap and now that company has to choose, do I invest in system Do I invest in infrastructure? Do I invest in, you know, inventory and locations? And those are all other moves that, you know, what did it make sense to make all over again? So we absorbed and/or sold all that. So location. So that's, that's what we did at the end of that. And now it's really all driven off this one group, which is a much better way to do things.

Well, here's that, by the way, this is key for entrepreneurs listening to this episode, because in the promotional products industry, you can do all kinds of things. You can be all things to all people. It's the biggest trap you can get into. And what— so what you did in that time period were two things. You right-sized the business, obviously, and focused on where your, your profit is really coming from. And then focus—

you got this laser focus, uh, back on the business, I would say, back on what we did, which was we went from starting screen printers to growing screen printers. And our mantra, you know, whether you're starting or you're, you know, we call it powering the print. Whether you're starting, you're, you're going to the next level, you're kind of reformatting or reinvigorating an old business, whatever it is, if you want to grow, we're there. You know, that is, that is what we're about, and that is who we align with as a customer in the screen printing space.

That seems like a really strategic moment for you when you determine you're not just selling to every screen printer in the world, you're selling to people who are interested in growing.

Yeah, because they have the same mentality that we do. We're growing, changing, innovative company. And so when you align yourself with the same type of customer the same mentality, then things that happen around that, you know, we, we understand each other. I understand when our customers are frantic and, you know, they need a piece of equipment right away, or they need an order, they forgot to do this, and we got to bail them out. You know, I totally get that. And they understand when we mess up because we're in this— we're in a very similar spot. And yeah, we frustrate each other, but we're also the same, so we get it, we're cool with it. And we help each other be better.

And I've got a question that just may be a strange aside, but have you found that qualifying the distinction between selling every— any average screen printer and those interested in growing, have you found the qualification hard, or are you able now to detect the pulse of a prospect or client and just connect immediately?

It's become a lot easier. We kind of set, we kind of set our whole company culture and everything around that. So the people that we get, if you go to a trade show, a screen printing show, the way we set up our booth, who's in the booth, the people that we have, our customers in the booth printing on press, the music that's playing, it kind of thrives. And you go to a competitor's booth and the culture and the people and everyone there are totally different. And then you go to another competitor, same thing. So this industry, and you see this in any industry, so the promo space is very, you should align with people that believe what you believe and the customers are gonna come to you because of that. You're gonna form stronger relationships because of that.

And I'm very interested in psychology behind this. It's the subconscious or beneath the surface decision-making process that's going on. They're attracted to that energy. They themselves want to grow, and you're entering in a different kind of language, a different kind of conversation than you would as just, hey, you're my vendor, give me a quote on something. It's a totally different conversation.

Yep. Yeah, the focus is not on what's this gonna cost me. It's like, what is this gonna do for me? How—

where's this gonna take me? For your sales growth, obviously then has been quite a journey, an enviable journey to many that would be listening, an admirable journey. What type of sales growth goals have you set for yourself and what have you learned about sales growth that you can pass on to other entrepreneurs?

There's one year in our company's history. I think the first, the first two years was just crazy. I didn't, I didn't even know what sales growth was because we were growing so fast. It was like, hey, we could do this and we hit it. You're like, it's awesome. But after the recession, I think in 2010, we set a sales growth for like hitting $20 million. We hit it. It was like awesome. But every single year since then, we've set— we've never hit a sales goal, you know, but we always—

you've set a sales goal, but you've never, never hit it.

Like it's always been too high. It's always been. But you know what? We typically hit it the next year. You know, we typically see the month run rate happened the year. For instance, if you know your month run rate, if you're a growing company, I love achieving new month run rates because you're like, let's say you hit $1 million a month for the first— your average month is $700 grand. You hit $1 million.

For new entrepreneurs, this is basically— this is the average of your trailing 12. Yeah.

Run rate. And all of a sudden you hit it out of the park. You do $1 million a month. You grew like— that was like 30% or 50% month over month. And you're like, Wow. And you like kind of like looked at like, what happened here? Like, why did we do so good? You're like, realize like you added a product or you changed, you added some customers or you went to a trade show that was, you know, killer. Like, okay, great. Let's do more of that. You know? And so I love hitting those new levels because it allows you to really analyze how you got there and then replicate that. So every single time we've done that in those growth years where we set this too high lofty goal, what we'll typically do is we'll hit 1 to 2 of those month run rates. That will allow us to actually achieve and/or overachieve that goal. And then the next year we catch up and we say, okay, we did this, this, and this in those months. The other months we didn't do this, so let's do more of the things that worked. And then typically hit that growth boundary the year, the following year or two after it. So I recommend setting higher goals than you can achieve because that is a way for you to continue to push. And it is— I will say, I did a talk, we kind of do TED Talks at RyanNet where we like We bring everyone together and then we do a talk at one of our— for people that are more risk adverse, it can be stressful. That can be stressful. One of our accounting managers was like, that's all great stuff, Ryan, because I was showing him my goals. You know, I was showing the entire group, like, the goals. He's like, you're not going to hit half of that stuff on there. Isn't that like super defeating? I was like, no, not at all, because I'm going to hit half of it. And then the other half is either not going to be relevant anymore and/or I'll hit it next year. You know, if you shoot for the moon, you know, you hear that you land in the stars or whatnot.

So, you know, when you consider often then promotional products distributor business, when you look at those trailing 12s, often you have a choice because maybe this is the case with your business. But in this business, you can have an outlier sale that suddenly jams your average month. So you could have had a 6 or 7-figure sale inside this average 12 months. That jacked it up and then you have a choice to make. You can either say defeatedly, well, that was just a, you know, happenstance, one-time occurrence, or you can look at it and go, okay, how do we repeat this again, either with the same customer or with a new customer? And that's what you're talking about because you had to have the similar spikes in your business as well, even though you probably had a lot more residual business built.

Yeah, absolutely. And that typically that happened in lump sections. So our business was diversified, so it didn't have like that one big customer or that one big thing., but what we did is we had its momentum and momentum in, you know, sales is so, it's like a, it's a winning football team. You take the, the Eagles last year and they got all this momentum and they lose their quarterback and they still win the Super Bowl, you know, because that's, that's what that, that momentum creates. It's, it's unstoppable. It's amazing. So, so you're kind of really looking at what created this momentum and trying to replicate that again.

How do you rally your team around this? Is this like a— you mentioned the TED Talks. Is this— how many employees, first of all?

So we have about 120 team members and then about— it's about split. It's about 60 in sales and marketing and about 60 in business support and operations.

Okay. So how do you rally your sales team around these goals? What does that look like for you as the leader? I'm sure your role has shifted from day-to-day operations to the leadership aspect of where we're going next. But how are you inspiring your team and keeping them on track with these goals?

It has totally shifted because I'm not the one setting the sales goals anymore. Our sales director and president kind of set the goals. So they, they get the team together and rally. Team builds the goal. They each come to the table every single month and say, hey, I'm going to do this. And then you take the sum of that, you kind of average it out. You take the outliers out, the bottoms up, and you say, hey, team, collectively, we said we were going to do this. Can we do it? The team said, We could do it. And then we have a stretch and we have a baseline. So our stretch is like, we're going to knock it out of the park and hit a couple of grand slams along the way. Our baseline is this what it's going to take to win the game. And that's derived up from the team. And that's how I did it when I was running sales. And that's kind of what, what has continued.

I love that stretch. You have your stretch goals, you have a baseline, obviously, but then you have— these are shared goals.

That you're arriving at as a team. Yeah, share goals and everyone can, everyone commits, you know, openly to say every, at the end of the month, we use Slack, but you get on the Slack channel and say, hey, I committed to do $200K this month and I missed it. I did $150K. This is what happened this month. This big sale pushed. This month I'm actually going to pick that up. I'm going to do $225K and it's going to happen with bam, bam, bam, bam.

And everyone does that beginning and end. But with CommsQueue, the customers can see there's a lot of transparency built into the software. So you can actually see it becomes an exciting and fun competitive race, so to speak, as you can see your colleagues' progress.

That's awesome. Yeah, I think what gets measured gets managed. So, and that's why I love sales, you know, because it's the easiest thing in the world to measure. You know, it's like you either sell it or you're done, you know. And so you can look at the scoreboard, everyone's looking at it all the time. It's the in business, it is by far the easiest thing to measure. That's what can create the momentum. And then from there, like, nothing happens. I don't think anything happens until somebody sells something. So whenever we have a new product or if it's feeling dead, you know, it's like not growing, it's like, well, why aren't we selling? Let's go sell it. And then we sell it and then everything else comes to play because now we have a reason to go build it. We have a reason to market it. We have a reason to make it better or improve it or advance it. But that's not going to happen until there's a person out there that sells it. There's a quote from Zig Ziglar that is just probably the most inspirational sales quote that I've ever heard. Maybe I'll look it up and read it because that's what excites me about, you know, what you guys are doing with, you know, educating because it's so, so sales-driven. You wake up every day and you're like, I can change my own destiny. I can change the whole destiny of our company or our industry, whatever it is, it's all up to you.

It seems as if, as I'm looking for patterns in the success of an entrepreneur, it seems as if one pattern that you found was you are driven. I say that in a positive way. Driven, highly motivated. You built a company, you are obsessed with growth, but then you also found through your own customers a way to keep that passion alive by investing in those people that are investing in growth. So this momentum, you use the word that you have personally has been injected back into the business. In a funny way, you found the whys, not the whats of what you sell, but the why of what you sell. And that has exponentially grown your business.

We've really been able to take things to a whole new level, and especially we just started this clothing brand called Allmade. We started the brand with 10 customers, you know, and whenever I look at a new product, it starts with one person. And so got the opportunity to go to Haiti with a nonprofit company that was developing a cut and sew factory there, but they needed work. They developed this whole infrastructure, but they, they couldn't sell enough t-shirts to really support it. So knowing that we're in the t-shirt industry, they asked us to come there. And so we go there and it's like, wow, there's never been like, I've always been on this side of the industry where we're putting ink on shirts. And I've never seen the people in the areas of the country, the world that make those shirts and how depressed they are because of The end of the day, you're buying a shirt for relatively a dollar and some cents, you know, the average shirt that sells $2, you know, whatever it is. And then a very small percentage of it goes to the hands that are actually making it and the rest goes to— it's a very commoditized space essentially. And so very inspired to maybe have the opportunity to change that, but I didn't know if anyone was going to buy it. So try to find 10 very different customers, some that are customers currently, some that aren't, and see if they would buy it. And pitched 15 people, and 10 said, well, I'll go to Haiti with you and explore that. And developing synergies and stuff, we do all of our training classes, we help people learn how to screen print. We don't teach them. Every single one of those training classes that we do, our customer, we've aligned a partner, teaches it. That is screen printing every day. They're bringing, inviting people into their shop because they appreciate the help they got along the way, and they want to, they want to You know, give that back.

You're obviously relying on this network entirely for that educational component.

Yeah. Every single thing, every single thing that we do is aligned with a customer. You know, the more we can do it, you know, from social media to videos to education, the more we can actually empower our customers to help share what they know. We don't know it, you know, we don't know anything. We're driven by somebody asking a question. You know, we're driven by somebody having a problem saying, hey guys, I need help. I can't figure out how to make this work. Like, okay, we'll help you figure that out. And so that's shared community problem solving, you know, essentially. And then, and sharing that knowledge, helping other people grow is awesome in any industry, I think.

Do you have a favorite customer growth story?

Favorite customer story? I think one of the coolest stories is a, a company out of Rockford, Illinois called Rockford Art Deli. And they basically started out as a manual screen printer. Developed this niche in that town and really catalyzed the town around 805 is the area code. So 805 Pryor, they have a store, they do work for a lot of other stores and boutiques and coffee shops and sports leagues and schools. And they've really made a community around a screen printing business. And they have free print day every, I can't remember, it was this summer. Literally like thousands of people line up, bring a shirt, come on their press and, and print a shirt. And, you know, it's local pride. So they were able to catalyze a local community in around the concept of decorating a shirt, you know. And so their, their growth into a bigger team and now automation has happened over the past 14 years. They started a year after in business that we started. Jared and his girlfriend Brittany have done an awesome job. So it's just really cool to see that.. But yeah, I mean, 1,000 of them.

That's cool. Yeah. Yeah, that's cool. That's a great story. We were talking earlier and you mentioned a surprising statistic to me because you have your finger on the pulse of both the screen printing, the contract decorators, and then the promotional products business. You have those of us that are obviously distributors. You had mentioned, and I think this number was from SanMar, 70% of the apparel being sold is actually going through a distributor and that's not necessarily directly through the contract screen screen printer.

Do I have that right? That's a number that I didn't know, but, you know, SanMar, you know, we were up visiting them. We do a lot of education and stuff, kind of collaboratively back and forth. I've learned a ton from them, you know, over the years. And so one of the things I was asking, it's like, wow, like, how do you do all this stuff? Because I was seeing a lot of product in their catalog and in their warehouse that, you know, we don't typically see in a screen printing shop, you know. And it's like, well, that's basically just, you know, it moves— most of this stuff moves through the this promo market. And if you look at who's buying garments, you know, that those connections and how many people, how many distributors there are versus screen printers and what their competencies are, the promo space has really developed the sales competency and the systems and tools. What you guys bring to the market of is allowing this to happen easier. The screen printing community has really developed a production mindset where you're, you have some companies that develop their own little niches and some companies that have some sales competency that start to be built. But most of the time it's focused, very, very much focused on a technician's production mindset. So producing the stuff that other people are selling. I was meeting with Blue Frog yesterday. He's one of the large decorators in the San Francisco, California area, and he loves working with— he's like, I got these, these distributors that they're— I have like my top 10. They're like, and I love it. I was like, would you ever want to do that yourself? He's like, oh no, no way. I just want to print more shirts. You know, he just open up a new facility, he's like, there's more business for me to empower them to go get.

That's what he's good at.

So he recognized they're his sales. Yeah, absolutely. And extremely excited to help them succeed, you know. So I think it's a good, it's a good synergy. And, you know, obviously there are, there are promo companies that are developing their own screen printing facilities and decorating facilities. There are decorators that are developing their own sales channels.

So you have crossover in both. Allmade Apparel, what made, what led to the decision behind, I mean, you kind of covered this a little bit, but tell us a little bit about more Allmade Apparel.

You know, knowing that, you know, having this like big aspirational growth, and I remember once we put a growth mark on the table, I think this was our 2016 growth mark, we're like, we're gonna be a $200 million company by 2016. Physically impossible, by the way, in the screen printing space. There's not enough ink that's sold. I mean, we'd have to like buy 3/4 of the industry and like, and, you know, completely dominate the world, 'cause there's not enough ink, wasn't sophisticated enough in business to know that that goal is not a realistic goal when you're selling this.

Ryan, one interjection, one question then about that. I was gonna ask this earlier. How big is the contract screen printing business in terms of volume?

Do you have your hand on that number? Ooh, that's a good question. So you can kind of do the math backwards a little bit. So in consumable supplies in North America, we garner about $300 million and that's 10 cents a hit range. Okay? So that's 3 billion-ish prints, imprints. Which think about 2 billion shirts and items sold, a lot of them are getting multiple imprints. So that's where you kind of get that number. So you go to 10 cents. What is that? The average, you know, contract decorating price go for? Let's call it 80 cents or a dollar. You know, so now you're— now you kind of back that up and you say, okay, we're doing 3 million hits at a dollar, you know, at a dollar to, you know, each. It's 3, 3.5, $4 million a year, you know, probably in that range.

Yeah, yeah, it does make sense. It's interesting, very interesting, uh, to look at those numbers.

But there's so much crossover that people aren't just doing kind— they're selling packages and they're— so it's kind of hard just to pull that number out. But we've definitely done a lot of work on the back end of, you know, what the opportunity is in the screen print supply, you know, space. So we knew how how many shirts we were touching, you know, how many shirts were being printed with our inks, were on our presses. And we also knew that, like, I never was passionate about a t-shirt. Like, it was great growing and building Ryan at the beginning, but the shirts that were available to print with my band in the area of the country that we were with, I never would wear them. The ink that we would put on them I thought was, you know, thick and didn't feel good. So I wouldn't wear the work that we were doing ourselves. We would just sell it So I never was passionate about the t-shirt or what became of the t-shirt until like I really started to get involved with water-based printing and American Apparel, who we helped start their print division. And like, oh, now we're getting on these blends and we're getting in this fitted, you know, different— and it's a soft ink and I can run in it. And it's like it becomes a part of you. A t-shirt is an amazing thing when you put on a shirt and it feels great or it says a message that you believe in or a team that you support, whatever it is. That's what's the main amazing cool thing about this industry is we've created all this infrastructure and business around giving, you know, millions and billions of people a year the opportunity to have that experience. So if we can help a better experience through a better printable shirt, a better fitting shirt, that was kind of like a, wow, that would be cool. You know, American Apparel, such a cool brand, um, such an awesome story, but kind of like being a back-end partner to them, you could just see the writing on the wall, like, oh, that's just not going to end well, you know. And it didn't. So it was like, originally I was thinking, man, like, if there's a way to save this cool thing and have it not, you know, not end the way it did, that would be so awesome. And I always wanted to get into the blank business because of that opportunity to grow and make a better shirt to print, better shirt to wear. But never knew— I always knew it was going to create a— take a lot of money. It's going to take a lot. We were never in the position to do that. And through this nonprofit that we met at a trade show, and I was talking, I was talking at the show about how like these t-shirts and what we do in the world might seem rather vain because really no one needs a promo item. Do you have to have it to wake up in the morning? You have to have that coffee cup with a company logo, or do you have to have a t-shirt? You know, no, you don't. But really what all that does, it allows somebody to be their identity. It puts— it allows somebody to grow a business, creates jobs, creates economy, puts kids through school, pays mortgages. We're not curing cancer, you know, but guess what raises money this next month to cure cancer is millions and millions and millions of pink shirts with white ink on it, you know. And so that is a cool thing to be a part of. And literally the same day I met this, you know, nonprofit that was saying like, hey, we want— we've been trying to take care of orphans in Haiti for 12 years. We realize that we're just putting a Band-Aid on it. Most orphans in the developing world aren't orphans. They're given up by their families because they don't have the enough money to take care of them. So if we can give them an economic system to take care of their own children, we can now no longer need orphanages. And so they started this t-shirt company. They have other companies down there that try to create these living wage jobs. The average factory worker, which there's a lot of shirts made in Haiti and it's very similar in different areas of the world, they make about $4 US a day depending on the dollars-to-gourd ratio. And it's just not enough to take care of your, your family, you know, when only 80% unemployment employment. So you typically have one maybe person working out of that household. And so they started this, and I went down there. They invited me to come down there, went down there. I took my family down there, and we just decided as a family like this would be a worthwhile investment to kind of go to the next stage of our business. And ended up getting about 10 customers involved. We started the brand Allmade. It's been going for just about 2 years now. We took about a year to put the whole program together, launch the product.

We've had— it's 100% of the garments being made there.

So we have, we of one, the first hiccup in the whole thing was, you know, building a living wage supply chain or building a sustainable or ethically produced supply chain was like the fabric, because 70% of the shirt cost is the fabric, not the cut and sew. 70, 80%. So yeah, we could be giving these people these great jobs in Haiti, but then the fabric's made with child's tears in Pakistan. So we needed to vet out. So we found a US supply chain. Uh, actually it was kind of the demise of American Apparel that allowed us to we have— we just tapped into that supply chain that was sitting there already in the US. And so we're using US fabrics, and then we decided to build it with a sustainable component. So realizing like most shirts that we sell, a third of their weight is chemicals, you know, literally a third of the weight of that shirt. If it's a 6-ounce shirt, 2 ounces is chemicals that are used to grow and process that cotton, which is a very hard plant to grow. And so chemicals— we use a lot of oil. It's a very wasteful— just Google how wasteful fashion is. It's is the second most wasteful industry on the environment. So we decided to start making better choices in, in how we build it. So we use recycled polyester versus virgin polyester. We use organic cotton, no chemicals. We use modal, which is, uh, has 6% of the environmental resource base that is needed to grow cotton because it's grown from sustainably harvested trees. It's a better shirt to wear. We have 3 platforms, great printable shirt that we always wanted to start a t-shirt manufacturing company for. And wearable shirt. It's made with sustainably, you know, sourced materials that does not take from the environment but gives back to the environment. And it's made with a socially conscious supply chain that pays people what, what it's worth.

And so you're exporting these USA-made t-shirts down to Haiti where the cut and sew takes place, and then importing those back into the US?

Back into the US. We're opening up Canada distribution. We also have— we do have 100% USA-made shirts for the 100% USA-made component because there are certain people that want that. So we kinda do both, but it's whether it's US-made or whether it's the factory that's making the fabric, whether it's a factory in Haiti, we try to pay living wages, sort of, you know, certified living wages, fair trade, and then make a good quality product that is good to wear, lasts longer, doesn't need to be thrown away. A lot of that environmental footprint is because of How many garments get thrown away? That promo shirt or that t-shirt that you got at a trade show that ends up in the trash or just the bottom of the— gets donated because you, you never want to wear it because it's not a great quality product.

To close the loop then on this part of it, going back to Haiti, what does supporting that community look like now? And I'm— maybe that's a revenue number, maybe that's the number of families that you're supporting down there now.

How is—

how have you closed the loop on this through your sustainable product?

Helping sell better products, helping consumers choose better products that last longer, that do more through them. You know, I think business has the opportunity to set up and do things right to be able to have the biggest impact on the world as a whole to solve major problems that we have in society or that we have on— within our environment. There's not enough donations. There's not enough nonprofits, you know, in the world. There's no way to fix it. We have to fix it through creating a responsible ecosystem of commerce that through what we do empowers and gives back versus takes. It's been hard for me to understand what that does, but I think it's much— if you put it back into your perspective, right? Look at your career, and I'll ask everyone that's listening to this to look at— just think back in your career, think back in your life when you made the sports team in high school, or when you got your first job, or when you knew that that company that you started was successful, or you made your first big sale. The confidence and the resources that that gives you to go do more is so impactful. It's a game changer for your life. And then what have you done because of that? Look at the places and other people that you're affecting because of that good thing that happened to you. And it creates this momentum, it creates the snowball of success. And so what that does is poverty is not a— you know, we think of poverty in the first world of like, we don't have money to buy food, or we can't pay rent, or, you know, we don't have a car. We don't have clothes, we're hungry. It's all like very tangible things, but really poverty is a mindset. And once you crack that mindset, the whole world becomes now a whole— it's Maslow's hierarchy of needs. Once you have those basic needs taken care of, you're no longer worrying about where you're going to get food or how to take care of your children. Getting the chance to talk to these team members that we have sewing down there is amazing because you're like, hey, what do you want to do? What are your dreams? And before, I had no dreams, but now I want to go start a bakery, or I want to develop my own clothing line. And I was like, wait a minute. Like, first I was like, what, you don't want to work here the rest of your life? Like, no, I don't want to work here the rest of my life, which is great because what they're going to do is they're going to go out there and they're going to do that bakery, they're going to do that clothing line, and they're going to hire people, and they're going to know how they were treated when we hired them and what we paid them. And hopefully they're going to do the same thing for the people they hire. And then it's gonna open up seats for other people to have that same experience. And it's gonna change the mindset of the— you and the areas of the— that country which has been devastated by social, economic, government, physical hurricanes and earthquakes. You could have one area that is complete devastation, trash all over the place, people living in horrible conditions, to literally 2 blocks down the street, there's no trash, You got a thriving community and the difference is mentality. It's in the mentality that we're able to give. So the more, you know, shirts that we make, the more jobs it creates. You know, we have about 100 people down there now full-time. At our high point, we had close to 200. We've ramped down production a little bit. We're ramping it back up. So our goal is to create that. But it's awesome because it's not just that one job. It's all the different areas that affects— is affected by that one job. It's a game. It's a mentality shift. And it's It's totally different than what other people are doing. I was getting in an argument with a guy that he has 8,000 employees that work for him and they sew for big brands. I won't mention the names, but they're the big brands in the industry. The big brands don't own factories there. They contract with factories because why would you wanna associate yourself with that? You know? So I'm asking him like, "How much do you pay people?" He's like, "I pay them minimum wage." "So you pay them 350 goods a day?" He's like, "Yeah." I'm like, "Is that enough?" No, I'm like, why don't we pay them more then? He's like, can't. It'll mess everything up. And so I'm kind of like arguing with him back and forth. It's like, we pay people this way. He's like, oh, you can't do that. They'll mess everything up. It's just the system that is honestly that they're, they're trying to create a business model based on the $0.20 the big brand pays them to sew, which is nothing. You know, we pay 3.5 times that much to sew down there, which is a lot. But it also— I know what it does because of it and the quality of the product that we get out of it.

So Ryan, it's been awesome to have you on the program. Love your energy, love the success of your business, the way you think, and just hearing more about your journey and how exciting it is, how you've changed lives. We are thrilled to have you at SKUCON and speak to the promotional products distributor audience. I think you'll find this an incredibly progressive and energetic audience that gets that we sell experiences above all. And can you give us a little glimpse into what else you'll be sharing at SKUCon?

Yeah, if we can use those experiences to make not just a better experience and a better product for your customer, not just selling the cheapest pen that is available in the catalog, you're now creating that stronger relationship, a better business. But then if we can do that together to create a, a better society, a better city that we live in, and a better, you know, planet and world. Then we can now have this big change, this big movement. And all of a sudden, you're not just a promo company. You're now solving these pretty awesome problems that are out there to go solve. Who doesn't want to do more business with you? Take that niche and then just own it. Just lock it up because now you're so different than everyone else and you, you have this very symbiotic and amazing relationship with your client. It.

You guys are doing amazing things together. Yeah, the flywheel effect that it creates in your business from transforming from a product-driven business to a purpose-driven business is incredible, and we can't wait to hear more about that as you pack that for us at SKUCon. Ryan, this has been a treat, man.

Thank you for joining us on the SKUcast. Yeah, thank you so much for having me and very much looking forward to this.

Thanks so much for tuning in to this episode of SKUcast. Be sure to keep up with our latest content by subscribing to SKUcast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.