Tracy Hazzard Designed 250+ Products Resulting In 1 Billion In Revenue From Costco To Amazon From The Dave Aladdin Show With David Aladdin

What's up guys? Grab that coffee out. We're heading to fourth quarter. This is the AMZ Secret show and your host, David Aladdin. We are live at the International Command Center Outpost 46 podcast 46. I built the show to jump past the basics and into the front lines of Amazon. Let's be the Elon Musk of Amazon. Let's be visionaries. Let's push ourselves to hit our limits and exceed our own expectations. I look to understand the person, their strategies, their secrets so that all of us can build leaner and better businesses. Today's sponsor is AMZ Secrets Keyword King. A new tool inside of our VIP platform that allows our community to create the most relevant, powerful keyword combinations while filling that 5,000 character allowable in your Amazon back end, thus giving you more relevant traffic and ultimately more sales per day. And also a big announcement coming soon. And today on the show we've got a special guest. Her name is Tracy Hazard, the CEO of has design ghost designer of 250 plus consumer products generating almost 1 billion on online and at retail. She is an Inc innovation columnist, co host of WTFF 3D print and podcast, and the co inventor of 37 patents. Wow, that's a lot of stuff right there. It is.

Well, it's been a long career already.

Can you tell us a little bit more about yourself?

Sure. So I went to design school. I have a degree in textile design and a from Rhode Island School design where I met my partner and my husband and he is an industrial designer. So we've been designing together for almost 25 years.

Okay.

We love this. Yeah, we love to design. We love to figure out what next product is going to be great. And it's kind of, kind of my secret. My, my superpower.

Okay. There's a lot. I, I noticed that you have 37 patents. Yeah. Before jumping too far ahead, how is the first time you filed out a patent, how long did that take and how long does it take you now?

Oh, gosh. Well, we don't always do it ourselves by any means. So we, I mean, you know, we've invented something for a patent in like hours. And.

We'Ve also taken years to go through and come up with something and refine it and get it to the stage at which we were ready to file a patent on it. It really just depends. We invented something around podcasting. We kept tossing around the idea of it, we talked about it. We were like, yeah, we could do that. And then all of a sudden we said, wow, this is really Valuable and filed it within days. So it just, you know, really matters on what your purpose is and what you're going to do. We practice something we call intentional invention. We don't invent or file a patent for anything we have no intention of taking to market. We must take it to market or it's not worth filing.

Agreed. I mean, patents themselves are expensive to file, and even protecting them is actually way more expensive to. To even do on its own. Have you ever had to protect one of your patents?

Oh, absolutely. Against Palm Computing and ideo, the largest design firm in the world. So, yeah, back in the early 2000s, we had a patent infringement case against them and we settled, of course, out of. Because you don't want to take it to court ever. But we got lucky with a bit of PR and the fact that Palm Computing wanted to go public. We got lucky that they settled quickly.

That's awesome.

But, yeah.

Are you allowed to disclose how much the settlement was for?

Oh, gosh. I mean, it was like, nothing. I can't even. I was just. Yeah, it was just for royalty. Like, it was like, they're gonna stop infringing. But really what it did for us was it enforced that our patent that we had was. Was, you know, the patent. And so it was valuable and it allowed us to then license and then eventually get our business acquired because of it. Otherwise it would have completely invalidated our entire business.

And how did you. A lot of the listeners today have patents. And what kind of value does that bring for the business in your eyes, in terms of acquisition? Did it substantially elevate your business in the acquisition process?

It depends on how good they are. So we practice something we call patent fortressing. So when you have a core patent in the middle of it, we circled it with every way possible that somebody might infringe on it, and we just filed $130, you know, provisionals. It's not like the expensive part isn't that part. The expensive part is us breaking your patent. It's kind of like patent hacking. And we go through and we try to break it in any way possible that other manufacturers are going to do it, and then circle your patent. So now you have a portfolio of patents which make it way more valuable. So we've done that for about three clients over the last four, three or four years. And. And they tend to go for about 3x because of that.

Interesting. I actually filed a few patents myself. And it's. It's a very tedious process, especially if you're doing a lot of it yourself.

Yeah, it is.

Okay, let's talk about the products that you've been designed and how did. Where'd you start off initially?

Well, we've been in the mass retail world for most of our careers, and I started actually working for a textile company and then working for Herman Miller. So I started on the commercial side of things. Herman Miller is the company that makes the Aeron chair that everybody sits in on all tech companies. It's like the iconic chair. And so I was there when they designed and developed it. So I had this great experience of understanding the product development process. And, you know, that translated into wanting to do it faster. You know, the cycles are a lot faster at retail, and that seemed really appealing to me. So after we closed our business and got it acquired, the one that we went up against Palm Computing on, then we really just started working in any possible way with mass retailers, and that's how we did it.

What year was that, by the way?

I'm sorry, what year was that?

Oh, gosh. Trying to get a timeline of everything.

2002. We would have started. We would have really started. Most of our mass retail work would be around 2002, so. So we've been doing a long time. I mean, we did some before that, but it was like, you know, we were selling our products into mass retail and it wasn't ghost designing for other people.

Very cool.

Okay, and so your first, technically, your first project was the Herman chair?

My first project was a bunch of automotive textiles. Yeah, there's a Chevy that still has my fabric on it somewhere. That was my first project out of school. But my first mass retail product was our stylus pens for handheld computers that were our own products that went into mass retail. That was my very first product. But my first product on Amazon was ironically, an office chair.

Oh, interesting. So you just pulled what you knew from your previous job and you used it for.

We were ghost designing a bunch of chairs for somebody and they decided to start selling them on Amazon. And that was kind of a new thing to be, you know, for them to supplement their brands. Most mass retailer, most companies that sell to mass retail only care about the really high volume. You know, we. We sell an office chair into Costco and it does, you know, hundreds of thousands of units. So when they decide that they want to do what is basically going to be like 4,000, 14,000 units a year on Amazon or something, it's like nothing to them. So for them to decide to do that, that was kind of progressive and shows you the power of Amazon at that time.

Okay, so you actually got into Amazon really early in the game.

Yeah, yeah, we did. I mean, but you know, when you're working for underbid brands, you know, that happens.

And yeah, I guess, like when you're an employee of a massive company, you're just like, oh, okay, they can do it, but I can't do it. But then eventually, at some point, you figured out that you could do it yourself.

Well, yes, I did, but I decided not to. That's the interesting part. So we don't do it. We don't actually sell our own products into Amazon right now. We do it for other people. So there was a main reason for it. I don't want to be in the algorithm business. I want to be in the design business. So I prefer to be the supply side. I prefer to figure out what. What people should be making, helping you get that made, get that sourced and get that out there and stay behind the scenes.

That's interesting. I've actually haven't brought in a guest yet that is on that side. What.

You talk about. You guys do a lot of. You do all of the design of the product. What advice do you have for our listeners in terms of design? Like, let's say if we were designing our own products, what would you recommend?

We do very interesting research. Massive amount of research. So seven out of ten new products fail. We have a. Basically the reverse of that. We have an 86% success rate. Our products, 13% of them weren't successful. It didn't mean they didn't sell a unit. They just weren't successful by my standards. So it's one of those things where when you do it, you have to do a lot of research. So you have to study the trends. You have to know what you're looking for and whether it's going up, going down, going sideways. You have to really look at that carefully and make sure that.

You'Re on the rise. Because if you're not, it's a waste of time. You'll spend all your time trying to get your rankings only to find out that you can't compete.

Interesting. I'm guessing you don't do just exclusively Amazon products, you also do retail and other type of companies.

Oh, yeah, we do it all. So, you know, the thing is that you guys on private label have a huge advantage. The mass. The companies that sell into mass retail that we work with that happen to have products on Amazon believe that their brand is powerful enough to be attractive to the customers on Amazon. So they don't Work that hard to get their ranking, they don't work that hard to get their reviews, they don't do what you do. You have an opportunity to outrank rank brands, which is why some people get acquired, some private labelers get acquired, but it's. You have to build your brand with the understanding of what's going to appeal to them to buy you out. And that's where I see it falling apart for a lot of people.

Interesting.

Okay, in terms of specific design, what do you recommend us not to do?

I recommend you not be safe with color. So don't take it too safe, because on Amazon, things need to sing, they need to show up, they need to stand out.

When you come in and you're going to have some knockoffs happen, they're going to take the safe route. And so not that every SKU that you have or every color that you offer should be that, but the one you work really hard to list, the one you work to be your primary listing, that one needs to sing, it needs to stand out. You need to have something special. So the thing. So not having a me only item, that's what we call it here, that's where patents come in or where special sources come in that no one else can get. Definitely stop going through Alibaba. You know, going that route to create something that becomes me only is the best way to create longevity. You work so hard to get your rankings and your reviews and you do all of that. And why should you do all that work for somebody to swoop in underneath you and take it away from you? You need to give yourself as much longevity as possible. That's where the money is.

Okay, that's a pretty awesome tip. And I agree. I actually, I think I do that subconsciously. I try to differentiate myself as much as possible from the other competition while still, you know, being a product that people want. That combination is, I find critical.

So the other, the other big tip I can give you is that think about women. You women are the predominant user base on Amazon. If women don't want to buy what you have, it will never work.

It's a good way to try to take your product into perspective.

Well, you know, I tell this all the time. Whenever I give a speech somewhere, I'm always, It's like, women are the predominant influencers of purchases across retail, everywhere, mass market, Amazon, anywhere you go, they are. And even including men's underwear. And this is the running joke. People always like, oh, no, no, that can't be the case. And I say, think about it. This way, when you first started to have underwear bought for you, who bought it? Probably your mom. Then when you were on your own, you might have bought it, but you probably wanted a woman to see you in them, so she was influencing your decision there. And then after that it might be your wife, your live in girlfriend, significant other, whoever that is, who buys it for you as well, or who you buy it for because she likes it. So women buy or influence most of the purchases. We're talking, well close to 90% of the purchases in the world today. So when you look at that, you better appeal to women. It is not a niche market.

Yeah, I actually heard one seller that he, all he does is he takes the object and he turns it into a pink version. And, and he finds that it's a pretty hot type of seller thing to do, which.

Okay, please don't do that. Don't pink and shrink. That's what I call it. Don't pink and shrink.

Oh, so you've heard of that technique.

It's a terrible failure. I mean, overall, it's a terrible failure. Our products that we create, we call them making them covertly feminine. So we give them some covert details that just really appeal to women. Whether it's a softer finish, better texture, a slightly off black color, depending on what it is. And all of a sudden it will sell good, 20 to 25% more than the SKU in the previous version of it. But a pink, it'll have a hit, but it'll die quickly.

It might work well in October, but that's about it.

Interesting.

That's actually an awesome tip. So softer finish, softer black, pretty much softer. Everything design the product more feminine, just cause the amount of women on Amazon pales or is a lot more than the guys that shop on Amazon.

But we also, you know, we want to see pattern, we want to see color, we want to see things that appeal to us. But we, you know, we're out there buying gifts for other people too. So it's not like we don't want masculine if it's meant to be masculine, but it has to make us go, that's the perfect gift for my husband. That's the perfect gift for my dad. So it still has to appeal to me to buy it, not be so appealing just to him.

I see.

If possible, can you describe a product that was pretty masculine and you've made it slightly feminine?

Sure, sure. Yeah. So I'll go with one of our office chairs because that's an easy. Everyone sits on a chair. If you can picture It. So when we first started designing office chairs, we noticed this phenomena. You could walk into an office space and all the women would be sitting on the very front edge of their chairs. And a lot of them would stuff, would bring pillows from home or stuff sweaters behind their back. So we dug a little deeper and I discovered that the office chair is designed for a 6 foot 2 male. I don't know about you, but not every man I know is 6 foot 2 either. So if the chair is designed for a 6 foot 2 man, and I don't know any women who fit that profile, really, then it's designed for all the wrong size. So we decrease the depth of the seat. We didn't make it smaller, it didn't look smaller. We, we created a herringbone pattern, which is actually a very masculine pattern, kind of like a chevron, that's a stitch pattern that went into the back of the chair. We turned it into an espresso color. And then the most important feature we did, we took flip up arms so you could scooch in closer to your desk. So when your legs are short and when you can't, your arms are shorter and everything's different. If you could scooch in closer to your desk, now you don't have to sit on the front edge of your chair. Your back doesn't hurt, you've got full support and you can continue to do your work. So all in all, it took us a year and a half to get Staples convinced to test it.

And when they finally did test it, it just sold out so fast because it was there amid a sea of black in this beautiful espresso brown color. And everything about it was just like, you know, appealing. And the minute you sat in it, you knew it wasn't your, you know, it wasn't your oversized, gigantic dad's office chair. And so it sold really well in its test. Then it went into full line and it continued to do better than ever, better than the average chair.

And we used to get tons and tons of things, oh my gosh, finally a chair that fits me and all of these things like that. But men loved it too. We would get these emails from men just as much as women where it's finally sized right for them. They love the flip up arms because it allowed them to game and do more computer work, whatever it was that they were up to. And, and so that's why we call it covertly female, because we built in those features. But men didn't notice the difference. It wasn't pink.

Interesting.

I Actually live near a staple. So I'm gonna have to take a look at that chair.

I'm actually not sure that chair's there anymore. It used to be there, but I'm not sure it's there anymore.

I'm just messing around. Okay, so you have designed over 250 products and they generate over 1 billion within the last 16 years. Correct.

Actually that's my stats from the last seven years.

Okay, that's even better. So.

What is it just like a few killer designs that generated most that revenue? What is the trend there?

No, I mean we do have one platinum record among the group and it's our chair that we sell at Costco. But we have a lot of juvenile products, a lot of accessories, home accessories, just kind of kitchen products. We pretty much do any area except for fashion and food. And we don't do anything that requires FDA approval. We don't do anything with chemicals. We don't do anything that's either too trendy, too in and out or takes too long to get approval. Like I don't have the patience for it. That's really my thing. So, you know, it kind of fits. Anything within that realm fits in our, our wheelhouse. We're also not afraid of really oversized products. We do a lot of like, you know, big TV stands and other heavy products. So we're not afraid, afraid of the sizing. We know how to make that work, which is a benefit for a lot of people. Size and weight is a scary thing for a lot of private labelers. But for us that, that doesn't bother us at all. So that kind of helps because that's a niche area in which a lot of people don't play.

And, and I'd say that out of that 250 though probably about, I'd say about half of them.

Were or are wildly successful in terms of they met every single metric because you don't end up on the shelf. And that's the thing is 90% of those were on the shelf at the retailer. So at Target or Walmart or Costco or wherever. And that doesn't happen unless you're gonna sell at the lowest, maybe 15, 20,000 units if it's a one time hit or it's going to be hundreds of thousands of units over the course of a year. So that's where the difference made is that these were not like in and outs and they were not, they were not, you know, small volume. So they may have gone online, but they went online and in store as well.

I actually this I saw this product, I actually ordered it. It was a TV mountain stand for a 55 inch TV for my parents house and I did the setup for them and I ordered that mount from Amazon and I noticed they actually packaged the mount that it's actually a very large mount, but they designed it in such a way that it was half the size of any existent TV mount that was out there.

Yeah, that's our specialty is what you just.

Okay, so you guys do that too. Cool.

Yeah. Because if you, if you ship something fully assembled, you can't be cost effective. So I mean just we can do, we could do a study. Like we actually quite a few of our patents are about how you take something apart and put it back together again in the most, in the easiest way possible. And that's just because of necessity, because of how it works at mass retail, every single cubic inch of space cost a lot of money. Because it sits on the shelf, it has a carrying cost. All of those things add to the dollar amounts at the bottom line. So if you're going to be cost effective, you have to make it as small.

That's awesome.

A lot.

Most of the time we're actually like we've been talking about in the past, we've been talking about choosing your products and designing your products, but not actually designing your products to be small, even though they can be actually large items. Can you come up with any examples of situations where you're able to take an existent invention or product and make it very small?

Interesting.

Well, we do have a patent on chair base that we did that with. Although we never brought it to market just for various reasons with the manufacturer. We treated it like it was a puzzle. We have this puzzle in our office that we absolutely adore and it's. We call it the polar bear. We've had it in the house forever. It was Tom's grandmother's and. And it comes apart by sliding all the pieces apart. And until you put that last piece in, the puzzle doesn't hold together. It's a three dimensional polar bear.

Interesting.

And so we think about that a lot of times when we're designing something. So is that a way to do it so that somebody doesn't have to like screw things together? That's like my least favorite way. And I'll only do it in an absolute last minute think requiring the user to do more work. But if you can pop a couple of pieces together and then when they are together, all of a sudden it's solid, then that's the ideal way to Go about it, doing it, you know, easy to assemble, not, you know, ready to assemble.

Yeah.

So any way you can do that, that way is the ideal.

Okay. So I, I noticed you mentioned 3D. Let's talk about 3D printing now, because I know you have a podcast specifically on that call. We do.

We have a podcast called WTFF. And FFF is the techie term for fuse filament fabrication or 3D printing. And my partner dragged me into 3D printing because we used it for a long time and we've been using it for years to prototype and to do other things. But we. He begged me and said, we gotta buy this 3D printer in our office. We need to skill build. There might be something here. And it took us about six months to get good at it before I would Instagram anything from it. And we've been designing in CAD for over, you know, at that point, over 20 years. So we were like, why is this so hard? Like, it shouldn't be this hard. But once we kind of figured it out and realized, wow, we can do so many things here.

We recognized in that it's going to change retail in a way that no one can anticipate right now. It's going to change everything to an on demand digital manufacturing world. And when it does, there's going to be zero inventory to worry about.

You just produce it.

Right.

That is going to be a huge cost benefit. But the real issue is that if people don't get started figuring it out today, then they're not going to be ready for it and it's not going to be tomorrow. It's going to be five to ten years from now where this is going to start to become in our mainstream. And you're going to realize it today. We think it's just plastic junk, but you know what, there's a lot of plastic junk that you buy already from Asia and other places in the world. So. So the amount of products that we could shift over to digital on demand is amazing. And with new metal technologies and ceramics coming on, we're not going to be able to tell the difference, except that we're going to be able to order, make to order sometimes what we want. So imagine if you had a place setting of, you know, plate, bowl, cup, mug, that kind of thing, and you broke one and you want to replace it later. You can just order one instead of an entire place setting. Imagine if you wanted it in your color now. You can have Target, can have the plain old white ones in the store, which is what's going to sell the majority of the items, but you can order online and have it delivered in two to three days. Green, blue, different edge detail. So all of those things are going to be possible in a digital on demand world, and they are possible today. The costs just haven't come down yet and the mass retailers are not ready for it yet. And that's really where we're working on trying to help people learn and understand how it's going to change the dynamic of their business, but more importantly, change the dynamic of the design of their products. So today we're actually talking to a couple of private labelers about doing some first run in 3D printing.

Interesting.

So that you don't have to tool for something. You can test it out, make a few hundred units, maybe even 1000 units. Check it out and see if this is a product that you want to go forward and make in large quantities and go for the tooling on it.

Okay, two questions before I have 100 more. That's okay.

What printer do you use currently for 3D?

Shockingly to everyone, we use a MakerBot, a Replicator 2.

Cool. Okay.

5Th gen. I'm sorry? Replicator, 5th gen. Yeah.

There's a bunch of printers on the market and they're all competing for everyone's attention. I think MakerBot got acquired a while back, right?

Yeah. They're owned by another company and Stratasys. And you know, it hasn't changed the quality of the printer. I think it's actually improved it.

Interesting. Okay, and then let's see. So you believe that at one point, like I could buy MakerBot 10 and mass produce units from my house.

Well, there's actually a great little outsourced company in.

New York that does that already. They use Replicator 2s and they are producing. So there's a Lowe's, you know, the DIY Lowe's, the home improvement store has a. It's called Lowe's Bespoke Designs and it's online already. But it's also a Chelsea store where everything it is 3D printed. And it's a test case of what's going to be the future for them. They're trying it out and seeing how customers respond to it. They have an innovation lab. So this is a result of their innovation lab and they're testing it out there and they're going to see how people respond to it. But every single item is made in that New York factory on MakerBot Red Book 8 or twos. So, you know, it's possible to do it today.

Okay, so I just like, googled it real quick. Replicator bot costs $2,000, correct?

I think so, yeah.

And these guys have like 100 of them in a room, is that what you're saying?

Actually, theirs are the more expensive ones because they're the Replicator 2s that you can't get anymore. They're older, the older models, but they have. Yeah, they have. You know, gosh, I don't even know how many Replicator 2s they have, but I know it's an entire farm of them. I wonder if I never counted them. But I've seen the floor plan.

Are you able to, like, sync them all so that you just hit one button and they all just start doing the same type of unit? I guess that's what they.

Not with that model. But yeah, some of them are. Some of them are cloud based and there's a lot of great software companies out there who do that, who do like, overnight scheduling and.

Monitoring and maintenance. So you could have one person basically monitor an entire farm floor of printers.

Interesting. Okay, what have you Created with.

With 3D printing? Yeah, so we, we actually, we don't sell much of our designs. We do have one little item on Etsy that we sell right now, and that's just because people keep asking us for it. So we had to have a place to like stick it with that. That didn't cost us a lot of money. But we have a 3D printed necktie and it's the most awesome thing you've ever seen. It's like, it's dimensional and it's very cool. It's on Facebook. 3D wow tie. You can look it up. Wow. Wow tie. And you can kind of look it up and take a look at it and everything. But we just, you know, it's a flagship kind of. We wear. Tom wears it to trade shows and. And we. It's a show off piece for us. But we also, every year we do a limited edition angel and we do a different one every year. And that's kind of our. Just at the end of the year, that's our calling card and we give it to clients and, and give it away at trade shows and for promotions and things like that.

Cool. And let's say, like, you're building a 3D tie. What is from scratch? What is the cost per. Like, you know how in cartridges for printers are around 15 to $30. What's a plastic cartridge for?

Plastics are pennies. This is the mistake that people think that the materials are costing. Now, don't get me Wrong. If you're going to do, you know, jewelry and you're going to do it in precious metals, it's costly, but it's no more costly than it is to make that product in the metal. Anywhere else, you would be doing it in gold or silver or whatever you'd be doing. But for the plastic, cost is so negligible. You use so little, and there's so little waste. It's actually more cost effective than injection molding or other forms of plastic. It's just that you're not buying it in enough bulk. So when you buy a roll of filament and it costs you 50 bucks, you think, wow, that was really expensive. But it'll take you a year to go through it sometimes or hundreds of hours of printing to go through it. So it's the design time and the design itself that is costly.

And that's done through AutoCAD. Correct?

We don't use AutoCAD. We use Rhino here. But there are so many different. In fact, on our podcast, we have, like, I don't know, half a dozen so far of software reviews that we've been doing over the last couple of months. So we keep reviewing new ones every time.

I want to pivot back because it kind of just hit my mind. You said you were selling a lot of units through Costco.

Yeah.

What do you think about Costco? How easy is it to get into Costco? Costco versus Amazon?

Oh, my gosh, it's incredibly difficult to get into Costco. However, if you're selling really well on Amazon or in other places, it's actually a lot easier. Costco wants to know that you can deliver, that you're going to be a good vendor to them, that you have a good selling product. They're going to want something unique, though, so the next version of it might be ideal for them. If you've got a 2.0.

They want to know your brand is already selling well with customers. And so if you've got something that's going there, that that actually is a little bit easier. But to walk in brand new, that's really hard. And it'll still even. That will probably take you a year and a half, even if you've got something great.

I had this guy approach me one time. It's about, I want to say, eight months ago, and he wanted to become a majority partner in my private label brand. And his main strategy was, I'm gonna get you into Costco. And I was like, what?

Well, the thing is that Costco, I can tell you from personal experience, Costco outsells every single other product that we've ever sold anywhere outsells it. But for us, it's lasted more than an in and out. And that's what happens to a lot of people is it goes in, it's in for a couple of months and then it's out again. But for us, our product has been in there, it got put into their standard line and it's lasted four and a half years. That does not happen that often. Now granted, we redesign it every year, like just make changes to the style of it, but that doesn't happen that often. That's why it's considered, you know, a platinum record. You know, when you say you have bestsellers or whatever, that one's our platinum record because of, because of that particular reason, because it keeps going in every single year. But even still, I can tell you that Costco's volume is. And the fact that they have such good margins, it makes it much more viable and profitable. And you're able to achieve your price points with them not taking this gigantic cut because they only take 15%.

Awesome. And so like an awesome product in Costco. What does the volume feel like?

Oh, gosh, it's hundreds of thousands of units. Yeah. I mean, per month, probably the smallest buy they usually do might be for a rollout or something like that. And it depends on how big the unit is or it's dollar price, but might be a 50,000 unit buy, that kind of thing.

Is that a per month basis or.

No, that would be a one time. Like if you were. A rollout is like sometimes, you know, if you go into Costco in the middle of the floor, they have like special. And it's like, oh, the, the furniture rollout or the fitness rollout or the pet rollout. And like there's pet food and there's all these accessories and all these other things. Those are considered rollouts and they're like two times a year. But it's a one time buy.

And they won't carry those items in their daily unless they do really, really well. And then they'll say, hey, let's carry this every day.

So you mentioned you're like the behind the scenes kind of team that you guys is. Does that mean you guys take an equity in every project you guys design?

Not every project, no. Sometimes we do fee based. We do a combination of fee plus royalty on anything we design. But our royalties are relatively reasonable and our products definitely sell more. So it's worth it. It gives you a better Chance of success.

We up the odds there. But we have a whole host of services. We do. So sometimes we'll just do the market research side of things and those are fee based. And sometimes we'll just do the sourcing. So I mean, we have our own team. We're not a trading company, so we don't work like that. We have our own team on the ground. We have our own rules about how we source products. And if you want to make something unique, you have to work that way. You cannot do it through a trading company whose goal is to try to sell you what they already have in their factories.

Let's talk about your team.

You have a team of two designers plus three virtual assistants.

Yeah, I mean, at any given time it fluctuates depending on the projects that we're working on. So yeah, it's really just the two of us plus one marketing assistant that we use for mostly our podcast. And, and then we have a team over in Asia that we, we, you know, it's up to three people at any given time. We bring them in and out on projects. They have their own businesses too, so it's just, they assemble together as needed. We also have additional designers if we need them, who do specialty things like renderings if we really need them. And when we're doing major productions or other things for 3D printing, we'll bring in a technician as well. So we just, we just fluctuate based on the projects and we try to. And that's why, because we keep it lean, we can keep our prices way down for the services that we provide. You know, you hire a big industrial design firm and the reality is, is that you spend, spend hundreds of thousands of dollars trying to invent the next, you know, iPhone. That's really what they're really geared towards. They're not geared towards doing small projects, small products.

So you guys actually design the project and then you create that mold and in using the 3D printer. Correct.

We don't always do it that way. No. Sometimes we just use our engineering staff. It's. Sometimes it's just easier. It depends on the project to do it with the factory involved in the process. Because a lot of sometimes things have to be developed that way. But we use our 3D printer here in our design process so that we can iterate really fast and come through a lot of design choices and make some decisions about it. But I mean, really our specialty is somebody coming in and saying we need to develop new juvenile, you know, gaming accessories. This is our category. What can you do what should we make? And our specialty is figuring that out. And then sometimes they just go to town with their own team and we just hand it off at that point.

See my, my one worry about getting like a 3D printer is like when I get like that kind of like creative tool, I just like will get stuck tinkering around with it for and not be productive at all.

I agree and I, that's why I actually don't. If it's not your day job, if it's not part of your design process, if it's not what you're gonna do, you're not going to do that for a living. Don't buy one. I mean it's the, it's a suck you in hobby. Yeah, the learning curve is really high on it. And even if you're really great at cad, you're going to be spending a lot of time working with the printer. And so, you know, we say that all the time. It's not like you shouldn't do it. I think it's amazing and it's great. But don't expect to be to making it a significant part of your business. So you've really gotten a good six months to maybe even nine months under your belt with it before you start thinking about how am I going to incorporate this in my business?

Yeah, I think I'd probably start building like Lego sets or it'd be distractions. Some expensive Lego sets.

Yes, exactly.

Okay, so what's your plan? Are you guys gonna continue just designing products and what's your scale out method from here on?

Well, you know, we're actually running a beta test of private labelers right now. So we have a, a core set of private labelers in this group that we're running right now. And we're running a sort of a.

An a la carte model of our business. I don't know, for lack of a better way to describe it. So because your business fluctuates in private label, so you have. I know. Because our business in mass retail, our fourth quarter is the best quarter of the year. Right. From a cash flow standpoint. So how do you budget or able to afford us? We developed this a la carte process by which you can do a little chunk, you can get a little consult, you can get a few hours of our time to review. Are you on the right track with the product planning that you've done? Is this what you should be sourcing? We've also done a flat rate sourcing model so that for a flat rate we can source it for you. We'll bring it all the way in. We'll QC it. It's included in the rate so that everything. But, you know, you paying for the inventory, you still have to do that, but we can do the sourcing at the time that's best for you. And then you place the order whenever you want. And the QC is already prepaid for.

That's awesome.

Yeah, so we're working on that. And if it works out really well, we'll. We'll expand it bigger. I mean, I can probably take a few extra people in there at, you know, at this point. Right now we're not at capacity, but. But we're really. Yeah, we're just beta testing it and if it works out, we'll go in a more global way. I think that I hear from a lot of private labelers that you guys are really concerned. You feel really comfortable with your keywords, and you feel really comfortable in the listings area. But the product development freaks everybody out and it's a big cost when you decide to develop something special. And so can you get more confidence in that process. And that's our goal, is to try to help raise that confidence level.

Agreed. I actually, I mean, I personally create optimization tools, but I always push my audience to invent inside of their specialty niches. So that's pretty much what you guys do. You design completely new products or you innovate on the existing products that exist already out there.

Well, and it's to maintain brand integrity. See, that's. I think what happens too often is you're like, ooh, the next shiny object. This keyword was really good. Let me go for this one. And you just. And if it doesn't fit your brand goal and your brand integrity, you're actually going to make yourself less acquirable. Your exit strategy will be at risk for it. You might make a short term influx of cash, but you might hurt yourself overall.

There's actually, there's like two plays going on on. Well, there's a lot of plays going on on Amazon, but the major one is let's just sell whatever sells and then mine. The way I like to do it is build toward the brand. So if it. Regardless of the keyword, selling good or whatnot, I still pick products based on the brand that I'm going, you know, that I'm chasing after.

So I think that's really smart. I mean, I was listening to you talk about that on your podcast, especially your one when you talked about you've been doing this for a year. And that's your strategy. I think that's really smart strategy. And the reason is because, you know, you work really hard to acquire those customers and you can build them into loyal customers actually very quickly. You don't realize it because you think people aren't loyal on. They're loyal to Amazon, but they're not loyal to you. And that's not true. We're loyal to products we like and if we've grown to like this product, we are likely to trust the next product that comes from that company. And so that's, you know, you've built that in and that, that's a value. It also makes, it makes you more acquirable because now you have brand integrity across it and now you're not a one hit wonder. No one's gonna buy a one hit wonder. It's just, it's highly unlikely. Unless your patent was so amazing and so good on it and it was exactly the right fit for a bigger brand to buy you out. But if you've got a portfolio of great products and you're constantly, you know, taking volume away from a bigger brand, you're acquirable.

One of my, I'm not going to say, but.

Someone said something.

Let's talk about brand building. What strategies do you have for the listeners?

I think that when you're thinking about brand building, it's, you have to have a flagship product that is the core of that brand building. But it's okay to have, you know, ancillary products around it. So, you know, if you're, you know, and I'm trying to think of like a way to describe it, this is, let's just say your brand is really about, you know, amazing coffee. And so you've got this great little, you know, coffee maker that is a part of it. And maybe it's, you know, kind of like a K cup thing. So you've got K cup accessories that go around it. And not all of them have to be originals as long as your core is. And what's the best part of your brand? What is the expression of your brand? And what you're about is the original. Some of those other items can be satellite, they can come in and they can go out as, you know, as needed. They can be money makers. But when you start going in and you're saying, okay, I'm about coffee, now let's be about tea. Those are two different people. So now you have to acquire another audience. So when you've worked really hard to acquire a certain type of audience who likes A certain type of thing. The next thing you have to do to expand your brand and keep building that brand is to think about, well, what else do coffee drinkers like, what type of person is this? And starting to get into that. And we talk about it like not quite like an avatar because I think that's a little too two dimensional and flat. We think about, and we always call her she. Of course we think about what she, why she bought it, what drives her, why she would talk about it with her friends.

What kinds of coffee does she put in it, what kind of taste does she have. Like you start to think about that and she becomes a full person, a full, well rounded person. And when you have that visualization in your mind, it makes it a lot easier to choose products because you're always thinking of her.

That's awesome. That's a very good knowledge advice.

I agree. I don't think the tea drinker is necessarily always the coffee drinker and vice versa.

Well, now you just have to like distract yourself and build a whole nother. And they might have different tastes and different quality levels that they require. Tea drinkers might be much more discerning. They might be, you know, and so you've got a lot of confusion in it. And we like to develop criteria at the end of the day. So we want to develop criteria by which does this fit our brand. And if you can't check everything off on the criteria list, we don't make that product.

I like the example you pulled out. I love to go into like the details. Because the thing is, actually most tea drinkers are not coffee drinkers. They actually choose tea as the alternative to coffee.

So in that regards, building the neck, if you were to build the next step into tea, it would have been technically a bad mistake in terms of brand.

Exactly, exactly. And that's what happens a lot of times. And then you get distracted and now all of a sudden you dump money into a product that you have to work just as hard to sell instead of it being an add on. And that's what you want. You want to add on, build on, grow it. So, you know, when we were hired to develop office chairs, the company was already making desks. It made a lot of sense for them to add us in, even though office chairs is a completely different manufacturing process, different set of factories. So there was a lot of complication there, which is why they hired us, because we already had expertise in there. So we helped them jump the learning curve there. But, you know, it's logical for them. Most of Them would go, well, we make desks and they're wood. Let's make dining tables or kitchen tables or whatever. But somebody who needs a kitchen table is totally different from profile from somebody who needs an office desk. So now you've got a whole nother customer acquisition problem. And so that's where people go wrong.

I actually.

Am about to launch another product that it doesn't have as much, I want to say profit, but I'm doing it in terms of the brand because I think if people buy this product, they're definitely going to buy the other products which that's where the profits made. It's kind of a different strategy on it, but it does call it lost.

Leaders at mass retail. Lost leaders. So you can go in. It used to be like you could buy like $5 DVDs. I mean this is way back when, but you could go into Walmart and buy $5 DVDs. But it was to get you in standing next to all the cool technology that was right there, all the new DVD players and to get you into, get you into the store. And they made zero money on them. Sometimes they lost money on them, but that didn't matter because they sold two to three times as many of the other items that made them tremendous amounts of profit.

The funny thing, I actually never have tried this strategy out yet. But for some reason I know it's going to work just because.

I like the product. The problem is it's big, so it decreases profits a lot.

There you go.

But it has that advantage of most people aren't willing to go into it. And it also builds the brand further. So.

It'S just, I guess it's something that people should look into to consider while they're building their, their brands out that it's not always about profit, profit initially. But if it has a goal to build in your brand bigger, I say go for it.

It's not an entry strategy. Let's be really clear about that. That's not an entry strategy idea. You want to do it with a. When you've got a product that's already doing the core of your business for you. So when you've got a, you know, a million dollar item in it and you're bringing in other products in order to keep boosting that and to keep your profit, how to keep your revenue growth happening and to not have to be so profit sensitive on it. So not having to bring your price down so you start losing margin. That's the time when you think about losing margin on an item that doesn't matter. That's either smaller or cheaper or whatever it might be losing money on that item to help drive more sales and keep the boost on your existing, existing item. Because once you have an item in there every month that you're selling it, it is more profitable because the longevity you're recouping, the cost of your development, time of your scale up time of all of those things, you have to look at that as that all does have a cost impact in your overhead. And most people don't calculate that cost. They only calculate it straight on cost of goods plus carrying costs and that's it.

So I used to walk into retail stores and looked around and I'm like, who are these people that like build these physical product businesses? Like, because I used to be like more into the software side and it just mind boggled me because it always looks so expensive to carry physical products. But when it comes to scale, it actually becomes very profitable and it could produce significant wealth.

What type?

Go ahead.

Margins are very low at mass retail. Don't get me wrong. Margins are very low. So there's not a lot of, there's, I mean it depends on where you are in the chain. The retailers are raking in money. There's no question about it. You know, when we talk about our billion dollars, that's our clients wholesale dollars going into them, the retailers are making twice that. So, you know, it's a lot more money on the retailer side of it than it is on the vendor side of it. And there's a lot more risk, Almost all the risk is on those supplying those, those products into the market. There's product liability risk. There's, you know, CPSC recalls. We've helped many companies who got subject to those and turned their business around and saved their businesses. But it happens and you know, so there's a lot of risk involved in that. And almost all the risk is on you to supply that. It's the same thing for you in private label. It's your business, it's your risks. You're assuming all of those risks. Amazon is not. So you know that it's no different in that world. But you have to. But the scope of it.

The amount of volume in it is much greater.

We have about seven minutes left. Let's try to, I guess I have a lot of questions, so. But let's just try to knock as many as we can out.

Sure.

Let's pivot into the recall section. What recalls have you gone through and how did you guys solve that?

Well, we've Had a couple of really big ones. We, you know, Tom was working on a project that basically batteries, you know, I wouldn't say they exploded. They, they leaked. Had a massive staples recall from, from that and had to pull the products in. You know, it's one of those things where this is where you double check and triple check and, and you make sure you have an expert. So they hired the company, hired an engineering firm to, you know, electrical engineering, to check all the batteries and do all of that. And then the client, the Staples, asked for a change to rechargeables. And that's a whole different model. And no one really, they weren't expert in that. And no one double checked their work. And so that's where you must get my, my number one role is get someone who's been there, done that again and again. Do not go for someone who's only sourced one time, who's only engineered that one time, who said, well, that's similar to something else we've done. We can engineer that. Yeah, no problem. When early on in our business, when we were making stylus pens, we had a plastics manufacturer right down the road from us and we thought, how convenient. They're an injection molder. They know what they're doing. They engineered the threads on the inside side of the pen. And shortly after we started selling them, I mean, we'd sold a few thousand units, they started exploding and popping apart because they engineered the threads backwards and so they would crack and pop apart and they were too thin as well. So I mean, what sounds like a simple thing causes a recall, causes a problem. So that's really where you really must hire properly. And don't think that you got someone. They must prove to you that they've done this before.

And how many units was that when you guys pulled the recall on the batteries?

Oh, gosh, I don't, I don't think it was that many on that. That wasn't my project. So I don't remember off the top of my head, but it wasn't that many. There's maybe, maybe a few thousand. What hadn't all fully shipped into the stores yet.

I could see it doing, you know, like it could be doing significant damage to the businesses. Yeah, imagine if that was like a lot of inventory.

I mean, this company was, you know, worth a few hundred million dollars. So for them it was a drop in the bucket and they were okay with recalling it, but, you know, they lost face with the buyers. So it does hurt.

Yeah, I guess one of the things that is not Talked a lot about is having inventory or having cash to back your business up.

Oh my gosh. Cash flow is everything. I mean, this is why big brands can, you know, eat you guys for lunch because they, they have better cash flow than you do. They make all the same mistakes. I say this all the time. They make exactly the same mistakes you do. I mean, they are not smarter. They don't have a better. In fact, they're probably dumber in a sense because their organization gets in the way of them being smarter and them realizing things fast enough. And so they make all those mistakes, but they just throw more money at it. And so they can, I call it adding more Runway. Just gonna add more Runway to take off and make their launch, you know, and they can still launch and they can still do what they need because they just have money to be able to work around that.

I think one of the biggest things that I've noticed is like for example, Apple has billions on billions of dollars just sitting in the bank just in case something happens.

Yeah, but it's more than that. I mean, the big difference between an Apple or any of those other companies companies is that they use their cash flow smartly too. They are always working on long term research. They have almost 20% of their of their budget allocated to R and D to product development.

That's awesome.

If you aren't allocating a significant part on your next product, you are in trouble. Yeah, you've got to have money to be able to, to develop it, design it and tool for it and buy the inventory. You got to be ready for that next product. So that's where cash flow really makes a difference.

Awesome. Okay, we are pretty much out of time. Is there anything that I left out that we didn't go over? Anything that you want to tell the listeners?

I think the one thing that I always try to tell people is don't get too attached to your product, to your idea, to your keyword, to your concept, whatever it might be. These are not babies.

You will not be able to see if your baby is ugly if you are too close to it. And so, you know, you've got to be able to see that this won't work. That's kind of my. When I said earlier that I have superpower, my superpower is when I, when somebody says, what do you think of this product? The first thing that comes into my mind is, oh my God, that's not gonna work. And I'm almost always right. I've been rarely wrong in that. So I can't See if it will definitely work for you. But I can see if it won't work. And that is you've got to be able to keep your mind open enough to the possibility that this is not a great idea.

It reminds me of, I'm sure you've watched like Shark Tank. It reminds me of Shark Tank episodes where the entrepreneur is just going on and then like Mark Cuban goes and says, how much are you in so far? And the guy's like, I just mortgaged my house out or I'm $300,000 in debt and oh my God. He's like, it's gonna happen. And it's, you know, every like the whole time I'm just like, why dude? You're gonna, you know you're digging yourself in this huge trench.

Yeah, exactly. You know, people think that, that it's cash or the wrong team or something like that. That is the problem in any startup. But the real big problem is about 54, 54% of new product launch fails or new companies, startups fail because they have the wrong product, product, wrong market fit somewhere in there. Either the market's wrong for what they have to sell or the product's wrong. And so you know, they've got a misfit there. And so that accounts for more than 54%. So you want to do that really early, you want to do it as fast as possible, you want to analyze that. That's part of why we're using 3D printing, because it's low cost alternative. You don't have to sink hundreds of thousands of dollars into tooling. You can test it out and Even if you made $0 on that first run, you would know if it was going to work or not.

Just before we close out, when it comes to, let's say there's like multiple different types of plastic in your mold or in the product that you're creating. How's that work when it comes to 3D printing?

Well, you can do, it's just like you do in regular, you can't, you can't injection mold in multiple, you know, multiple plastics. You have to have a co injection. And so there's, it's complicated and so the costs go way up there. More often than not it, you know, it's an easier thing to assemble them.

Or I think that's what you gotta.

You know, that's, you make them in two separate parts and you do it that way or three separate parts and you do it that way. You know, there's some amount of like you can, you know, Cover something in silicone or rubber, like so you can dip. There are things that you can do that accomplish those things. It's just a matter of really understanding your process, your plan, and your overall cost goals.

Awesome. Okay. Yeah, it was just one of the things, you know, I've been considering doing the whole 3D printing route and testing out my concepts and just being able to hold them and see what I could do to make them better. If people wanted to get a hold of you and also or your services, where can they reach you?

So if they're interested in 3D printing, it's 3dstartpoint.com that's the easiest way to find us in the podcast is there and everything. And for the rest of our business, it's hazdesign h-a Z-Z-E-S I g n.com and, you know, you can find me on LinkedIn and Facebook and just about anywhere too, so. And my columns are in Ink magazine, so you can find me there, too.

Awesome. Well, I appreciate you coming on the show. It's definitely been an awesome podcast. Slash. It was actually live for part of it, but then it got just shut off by my phone. Overheated.

Oh, no. Oh, so we were like live streaming?

Yeah, we were live streaming at the same time. Oh, cool.

Well, that's no problem. So I'm happy to come on and please let me know if you guys want me to come back again and talk about something else specific.

For sure. I think there's a lot to talk on 3D printing. I mean, you guys have a whole podcast on it, so.

Absolutely.

Well, David Aladdin, Tracy Hazard out sponsor is AMZ Secrets.

Keyword king. What if you could sell 10 more units per day on Amazon or 100 more units per day? The key to selling more on Amazon is driving more traffic to your Amazon.

Listing that's related to your listing.

Reviews help, yes. Quality photos help, yes. However, increasing relevant traffic is king. The only way to sell 100 more units per day is having at least 100 more people visit your listing per day. Keyword King leverages smart algorithms to assist you in building the best keyword lists for all your products. Not only will you hit 5,000 characters total and 1,000 characters per line in the back end for your Amazon listing, you will do so knowingly with the best combination of words. Right now you might have 3,000 characters filled up, and that's pretty darn good, but you really don't know for sure. And you should actually be at 5,000 characters. It's tiring, time consuming and cramped in Amazon's back end. Keyword King performs many tasks on the fly live while you are building your list and ensures your list is as powerful as can be. It intelligently eliminates spaces, duplicate keywords and other negative things that would hurt your sales. You can save an infinite amount of keyword lists, return to them later and compare which lists are performing best for your products. Best of all, it allows for a one click translation of your first and second rows to your fourth and fifth rows in Spanish. Over 55 million potential US shoppers are Hispanic in the US and they type directly into Amazon in Spanish. These keywords are often untargeted easy sales to add to your bottom line. It does this all while applying smart keyword cleaning algorithm. In the end, organic traffic to your listing is free. Getting free high quality traffic is the way to build sustainable long term Amazon businesses. Keyword King will destroy your competition using amzsecrets.com I hope you guys loved the podcast as I did.

Be sure to join our Facebook Mastermind secret group@amzsecrets.com FB. It would help tremendously also if you could leave a quick review on itunes. Every question has an answer for Amazon and finding the right one is critical to your success. AMZSecrets.com does this and it does it all for free. So why not See you guys all there.

This podcast has been directed by David.

Aladdin, a global King and Logistics strategy and secrets David Aladdin out.