Todd Cook 00:00
But let me tell you, it's stressful because when you're burning cash like that every month, you know, and I invited my brother in to work with me, and all of a sudden, Dad, we're all arguing. You're like, Guys, this is like, but Todd, you said sales were going to start next week. When are they going to start? So just keeping everyone calm and not freaking out is probably the biggest thing!
Andrew Maff 01:15
Hello everyone, and welcome to another episode of the E comm show. As usual, I am your host, Andrew Maff, and today I am joined by the founder and CEO Todd Cook of SlumberSource, Todd Cook, the founder and CEO of SlumberSource, you're also the founder and CEO of yourself, right? Doesn't that count?
Todd Cook 01:31
That's right, yeah. So good. Thanks for Thanks for having me on.
Andrew Maff 01:34
I know you and I have already been like, All right, we're getting deep into this. And I'm like, wait, we've gotta, I need some of this on the air, because I hate it when all the good stuff gets talked about right out the gate. So super excited totalk to you. SlumberSource, very cool, very differentiated concept your background is crazy. Because, unlike a lot of people we have on the show, you have a fantastic background in what I kind of refer to as, just like traditional marketing, yeah, you had a ton of retail and now you've kind of started to pivot into the E commerce space, and you've taken a lot of what you learned into that large scale retail element and brought it into E commerce. I don't want to tell your backstory. That's why we brought you. So I'm going to give you the floor. I always like start these off stereotypically, tell us a little bit about yourself, your background and how you got into SlumberSource.
Todd Cook 02:24
Yeah, thanks for having me on. Appreciate it. Just yeah, my background, since I was a little kid, grew up in and around brick and mortar retail, specifically home furnishings. You know, there were these, this, and the full line concept still exists. I guess there's stores like rooms to go, and others are you can go and get a lamp, get a okay, but this thing was sort of about this model was sort of in the 70s. Late 70s was on steroids. So we moved to Dallas in the late 70s. My dad immediately went to work opening these big, full line furniture stores in Dallas, you know. And I remember having, we had, like an in house, the gals that were putting together all the newspaper ads, you know, it was all very old school with the cameras. You know, you'd move the stuff around, you'd put the icon of the sofa here, and then shoot it. And it was just crazy. And you think about, Wow, all that time just to put that together. And then fast forward to the era of what I would call specialty retail, which is instead of, you know, kind of looking at a brick and mortar store that sells everything, you know, lamps and everything, and look at it and say, Where are most of our turns? Where are the margins? Where is the volume so far? So well, it's typically in the mattress section, which in this case was like 18% of the store. Like, why? What are we selling? All this other stuff. So I think I go to Seattle with my dad, we get a bunch of these stores open. And I think there was roughly 50 stores in the Seattle area, and then Portland, about the same number. But the key thing people always go, Well, you can't, why would you go and open a bunch of stores that's that's crazy, like open one? Well, the problem is you want to go in with the mindset of hitting and dominating, as far as gross rating points are concerned, TV, radio, newspaper, how can we dominate there? And the reason for opening all these stores is you want to be able to advertise that spend across those stores on day one. Literally, yeah, you can't say, well, let's open one store and we'll see how it goes. So he did those stores in Seattle, Portland. Those got sold and then, and I was like, Well, hey, I want to try to do it here in Texas. So took a few years to figure out how to make this work in Texas. Could we make it work here? Just because it worked there, it may not work here. And you have to look and say, Well, you know, what are, what are the kind of the key markers? Well, the competitors here in Dallas were low hanging fruit. So you have that, you know, but, but the key thing is, can you, can you come in and spend at the level? And I'm trying to remember, I know, back in Apkin when we did the numbers. Mm. It was ugly. So to come in and say, what do we have to do to rattle the bell, to make tons of noise and to dominate in Dallas, Fort Worth, which I think is the number four right now, DMA in the US?
Andrew Maff 05:11
Yeah, believe that.
Todd Cook 05:14
So, you know, I think we were right out of the gate, which is crazy. Most people don't have the stomach for this right out of the gate. I think we're spending 350, 400,000 a month. And keep in mind that, you know, what are they saying? Shark Tank, we're pre revenue. I always hate, I always love that they just go, we're pre revenue. So you know you're forecasting to say you're going to see the mailman come in your stores. I think on day one we open 20 in Dallas. To give us some idea. Specialty, you're going to see the mailman for the next, I don't know, 3-4-5, 5 months, and meanwhile, you were just burning cash like crazy. But at some point, without anyone freaking out, eventually you got to keep everybody calm. Those two things will intersect, and you'll start to get that share of mine, you know. But obviously it's like, when's that coming? When's it gonna happen? So? But that was really fun, spending time building out those TV buys, building out those radio buys, spending time, you know, putting together newspaper ads, running these double trucks, and trying to figure it out, you know, an opening and arguing with the Dallas Morning News on Monday, like, hey, you know, we paid for we A2 and A3, What are you guys doing, putting us on A6? So there was always this Monday morning quarterback arguing with all the stations, and, yeah, for placement, all that kind of stuff. But that was fun.
Andrew Maff 06:36
That is crazy, like you never hear anyone. I mean, in my eyes, that's like, you're almost going from A to Z, right? Like, not you get a lot of people like, I'm gonna launch a store that goes well, launch another store, and then we'll scale from there, then maybe a franchise. You said now we're gonna open up like 20 stores, like, right away, and then we're just gonna own TV and radio in this area and just blow it out of the water. And, yeah, to your point, that's a huge risk, but obviously it worked out. So then, then what happens? Right? Because now you've started to kind of go, are, do you still have all those stores? Or, you know?
Todd Cook 07:13
No, so those were sold in 2014. Almost all of those stores, collectively, there was a big chain on the east coast called Sleepies. I think they had 700 stores down the West Coast. Those all combined into different those rolled up into other retailers. Anyway, long story short, mattress Vermont, Houston, basically owns all those guys now, but I think they have 300 stores now. So they went through, just bought everybody. This is years and years ago. I do believe, just because, you know, you always hear this, at least when it was like, Hey, I think we do the same thing in Dallas. Ah, no, that was a Halley's comet that will never work, nope. And it really took going to the vendors and showing them, you know, whatever the Simmons, you're at X percent penetration in Dallas, Fort Worth, we will guarantee to take you from six to 15 or whatever it is. So you're putting these deals together with these vendors to get their buy in. And otherwise, you know, you would never have the enormous ad budget, but, but you got a lot of people your report that are expecting, hey, sales are eventually going to what we do call maybe drag the anchor. You just gotta drag the anchor. So we're gonna drag the anchor, and then eventually it hits. But let me tell you, it's stressful, because when you're burning cash like that every month, you know, and I invited my brother in to work with me, and all of a sudden, Dad, we're all arguing. You're like, Guys, this is like, but Todd, you said sales were going to start next week. When are they going to start? So just keeping everyone calm and not freaking out is probably the biggest thing.
Andrew Maff 08:48
Yeah. And so it's not, at least the website as it now. It's not like just traditional mattresses. It's not, you know, like a mattress firm. You're actually in more of a specialty area?
Todd Cook 08:59
Yeah. So this is totally different, like not even in the same galaxy, what we're doing now, you know, when you have guys online. So the online space once they figured out how to roll pack mattresses, it's been many, many years, probably 15 years ago. You know, you had these direct to consumer guys, like Casper, Purple, all these guys, right? So that was a really, that was really amazing, because they could FedEx to your door all this great stuff. What really ended up killing a lot of those guys, the roll pack guys. I mean, now you can go anywhere, go to Costco, get a roll pack mattress and walk out the door, you know, $500 King mattress. What killed those guys, specifically Casper, is that, you know, they would have these 90 day. Hey, 100 day or six month. If you're not happy, call us no quick. And of course, everybody and their brother, they would, if it was 90 days, they'd call on day 87 and be like, Yeah, I'm not sleeping too good. No problem. We're refunding your card now and then. And then the Casper folks would look and be like, oh gosh, ma'am. Yeah, so go ahead and keep your mattress. We're not gonna be able to pick it up. And, yeah, that became a major problem somewhere in the order of 30 or 40% of their volume was just going right down the trash. People were getting refunds, and ultimately, I think Casper got sold for like, pennies on the dollar. I forget when. Yeah, this is totally different. So this is home care beds, which, at the time, what we're trying to figure out, it was for a family member we need, like a home care bed. What's a home or a hospital bed? What is that even well, it's like basically a hospital bed, but doesn't typically look like a hospital bed that you could have in your home, but under the hood, it's got all these crazy functions and features, the up and down and cardiac functions and everything you would have like in a hospital, super heavy. I mean extremely heavy there. I mean 800 pounds on a pallet. Pretty sophisticated you're running. It said a typical Adjustable Bed might have two motors to actually a head motor and a foot motor. These will have four or five or six actuators, right?
Todd Cook 11:06
And but the bigger thing, when we noticed we were trying to get a bed for a family member years ago, is like, called one of the bigger stores and said, Hey, we just need to get this bed delivered, installed, set up, whatever they're like, whoa, whoa, whoa, whoa, whoa, we don't work with dates. We don't work with times. We and anyone. I'm sure even you would agree that when you're in home care or anything around health related, high degree of urgency, mom's out of the hospital on the 15th. Can you deliver on the 16th? Yeah, yes. This was like a foreign concept to these guys. So to me, that was really, that was, that was the end, if we can figure out how to deliver the equivalent of a custom piano from what it wherever the factory is, because we go straight from the factory. Let's say you're New York, New York, or Brooklyn, or wherever the factory is. We're going to San Diego. How do you do that? In four or five business days, delivered, set up, installed, so quickly, went to work building out a platform to manage these guys. Because to me, that was the key. Maybe most people would look at it and say, We got to hire 50 sales people, and we got to add 1800 moreSkus on the site, and we're sitting there going, now we're going to stay in this lane of incredibly hard to deliver products. Which are these home care hospital beds, which are really insane. If you saw them on the pallet, I mean, it would look like you're getting a Volkswagen delivered, right? Yeah. So with that in mind, people still, customers are still, you know, they're not going to be empathy. Have empathy in terms of like, hey, look, I paid eight grand for this hospital bed, we need to deliver on the 15th or whatever. And they can even see on the page it'll get the algorithm will basically show, depending on where they are, anywhere between three and six business days. But that's delivered, installed, set up, and these are our guys which make which is totally unique. So typically, when a bed like this would land maybe with a competitor. They don't really have guys in the field, or they'll make the mistake and go out and find these, like turnkey white glove companies. You may have read about some of these. None of those work, because what, I'm sure we don't do that. I think we stuck our fork in the light socket on that a couple times and got burned, you know, is, you know, yeah, we, you know, we do pianos. We do we can everything. Oh, this is great. This is awesome. I can just sit back. We don't have to worry about anything. And, of course, you know, then, until the, you know, it's like the customer called Todd. You got a minute, yeah, what's going on? You said these two guys were the best install technicians in all of Las Vegas. Yeah, they're pretty good. Why? Well, clearly not. Because he's in the family room with my husband with the manual spread out saying, hopefully we can figure this out. So, you know, you sort of on these things, and you realize, okay, okay, okay, you got to bring it all in house. So all of these processes customers, obviously, many customers will call with questions, because when you're getting ready to spend on average, our average tickets, probably closer to eight grand. It's not uncommon to have an order that's like 30 you know, but either way it, unless you don't have maybe a soul or something, if you're selling a bed that's 10 grand. If you're not running a little bit paranoid and concerned and worried about what could happen, then maybe you shouldn't be doing this. You know, I love a lot of guys. The reason I started at E commerce site so I didn't have to deal with customers, but we flipped that on its head. The minute you order you're getting calls from us just to kind of pre game. Hey, thanks for your order. So you live in the Boston area. Just want to make sure so your two story. Okay, great guy. Okay, as soon as it leaves the factory, we'll be calling. So we are literally calling two three times a day, the day of the delivery. It's like customers on the phone with the driver, with the technician, with the everyone's on the phone like we just do not let anything fall through the cracks and that might seem overkill, but it's allowed us to really kind of build this reputation of, hey, these guys are there when they say they're going to be there, which doesn't maybe sound unique in it, in itself, but that's was the was. That was the real Aha, years ago, like going nobody, these stores don't care when this stuff gets delivered and they're selling hospital beds. How is that possible? And so that was the real like, you know, epiphany, or whatever.
Andrew Maff 15:26
Yeah. And so now, being the E-commerce side, obviously, your background being more on the traditional marketing side, when you went into E commerce, what was your approach from a marketing perspective? Like, how, how are you getting this product in front of the right people?
Todd Cook 15:39
Yeah, right. It's so tricky. And honestly, even if you were to ask me, like, who is the demo, or who, that in itself, is tricky, because typical order, let's say, from Miami. Let's just take pick, you know, come or customer orders in Miami or whatever. There's so many, typically in most orders, you have the adult children. So let's say the parents are in their 80s. They live in Miami. Adult children live in Wichita, Kansas, and they're in their 50s. They're involved. But sometimes it's the caregivers that are starting this whole thing. So you have so many people involved, you know? And sometimes we have, we're the ones that have to come in and say, but guys, let's take a chill pill. Look, I think I would recommend going this way or that way, not this way or that way. But you get a lot of a lot of so who are you appealing to? Well, obviously the adult children. Sometimes it's the actual the end user, who's, you know, not necessarily, it's, it's not always just assuming they're in their 70s, 80s, 90s. You have people with mobility issues, much younger than that, that need these beds and there's cool technology in a lot of these things, where the bed, the newer stuff that's hot and cool now, is where the bed rotates, descends to the floor, and you can exit right so that's kind of cool. A lot of cool stuff. But again, all of that requires you know that your technicians are on their game. These beds are constantly being changed. As far as the, you know, just re engineered and so that we're always having to keep them in the loop. But how do you then advertise to these folks? How do you figure out what to do for us? It's just been kind of hit or miss. I think, you know, obviously we'd love to do other things, but I think we've just sort of been spending a lot of time with our SEO optimizing. We rank pretty high on everything home care bed related. And, of course, kind of have our pedal to the metal on AdWords. That's great, you know. And, and also, you know, really, when it comes to just like, we get a lot of referrals too, just because, not only from the factory, but from customers that are, like, where they'll call the factory, or they'll call an even another store, or whatever in the or they'll one of their friends say, and they'll call in these stores, and the stores like, oh, we can't. Like one of these items we sell Pottery Barn sells the same thing. They can't deliver for an install for two months. We're doing it in a week anywhere in the US. So things like that, I think, have become a big part of the driver, you know. And I'm grateful that we get a lot of these referrals where people, you know, say, Hey, you guys did a great job for my neighbor or my grandmother or whatever. We'd like to maybe talk to you about getting a similar bed delivered here in the Philadelphia area. Do you guys do that? Yeah, we probably delivered 40 beds there last week, you know?
Andrew Maff 18:31
Yeah.
Todd Cook 18:32
So anyway, so it's, I think it's, again, finding something that's different and broken, in this case, very broken. And I think this is probably true of anybody was like, your butcher box guy you had on, or anybody going in there. And I'm sure all these guys know, I'm not, we're no different, you know, we're told that that's never going to work. I've got this book back here, the Netflix book, you know, it's kind of cliche, but, you know, it's like, where the title of the book is that will never work, you know. And, there's a fine line, I think, between kidding yourself starting a business and kidding, you know, like my wife said, my tomato sauce is the best and I'm going to quit my job and go open it. No, don't do it. You know, like it's like my accounting teacher used to say, if it feels good, don't do it. And if things are good, it's only temporary. And I love those. It's kind of negative, honestly. But if you sit there an accounting teacher, yeah, great accounting teacher, she Yeah, she was she loved these stories about where she'd go into companies and they'd say, Oh, they went, Oh, they thought they were profitable. They thought they were profitable. Wait until I get a hold of them. And then she would do this whole thing, like, here come the feds. You guys just lost money, and she'd underlined six times anyway. So, yeah. I mean, trying to, trying to find our path still.
Andrew Maff 19:52
Yeah. I mean, you know, it's a, it's a challenging space, because you have the, you have that issue where the customer is, is typically not the consumer. Usually there's someone else doing the searching for it.
Todd Cook 20:05
That's right.
Andrew Maff 20:06
Then you have the issue of, you know, it's a higher price point product. So certain marketing strategies, you do them, and if they don't work, right away, yeah, burn cash pretty quick until you hit like, one or two sales, and then all of a sudden, you're like, oh, wait, this actually does work. It's just it's much larger ebbs and flows of price points. Like, we work with a couple, we work with several different brands that have certain products that are eight figures, right? I'm sorry that eight figures, five figures, so like 10k plus, right? And so the issue you run into is, once you do get a sale, all of a sudden, you know, depending on what you're spending, yeah, you get two or three sales that week, the numbers look fantastic, and you have a slow week, and all of a sudden, it's like, why are we burning so much cash? So it's giant ebbs and flows are an issue. But to your point, you know that solution that you've solved on the operational side is what's really allowed those consistent referrals to come in because, to your point, yeah, you know, if I'm trying to put myself in the customer's shoes, if I was purchasing this, like for a parent, or something like that, yeah, I wouldn't trust a company that specializes in these things, like yours, versus, like, to your point, like a Pottery Barn, where it's like, what do you got? It's more, yeah, it's almost more of a medical device. So why Pottery Barn?
Todd Cook 21:28
And that could be a problem. Imagine the Pottery Barn poor, but nothing gets them or that. But imagine they're delivering, they're used to delivering sofas or whatever. Those guys sell these days, you know, yeah, and so, so the, you know, they're like, Oh, stop, 16. Oh, what is this? Oh, have you ever done? No, Mike, we'll figure it out, you know. And then they're in there. It's not always that simple, because a lot of these beds are pretty sophisticated in terms of the rail systems, and you just need the guys need to be even. And one other point I would make is that delivering and installing in these bigger cities, the Phillies, the LA's, the San Diego's, the Orlando, a lot of these guys, we have full time on our dime, like because we're doing so much volume with them. But I was thinking about this the other day. Are not probably, our volume is somewhere, probably close to 40% of our sales are literally in the middle of nowhere. So that adds a whole other element of how do you deliver 800 pound, you know, VW Beetle on a pallet across the country? And these customers, let me tell you, they don't they you're looking at the map saying, hey, they're in the middle of nowhere. But they're not looking at the map thinking they're in the middle there's like, look, I paid for delivery and setup. I don't know guys, if you have to fly it in here on a helicopter. So we've been able to really grow our middle of the No, middle of nowhere strength, if you will, just our ability to kind of go anywhere, which is kind of cool. So there's that.
Andrew Maff 22:57
Yeah, that's awesome. What's the game plan going forward? Do you think, like, expansion into new products or into just a different line? Like, what's your thought with where you're taking it?
Todd Cook 23:09
Yeah, I mean, there's always this new, newer technology coming along with these beds that are really cool, like these rotating beds seem to be kind of hot now, just more or it reminds me, I had a call about a month ago, and had a customer that bought this for his mother and so, and I remember him telling me, like, we, you know, we have five caregivers, you know, or something like those. Oh, great, great, you know. And then he calls me, you know, sometimes I think these people assume that these beds are just like, it's just, you can just fire your caregivers. You don't need anyone. We're just gonna put mom in this bed, and Mom will see you in a couple of weeks by the caregivers can leave and like, Dude, don't hire, don't fire your caregivers. You still, mom still needs help. Yeah. So I think just continuing to hone in on the categories, or these category killer models that continue to be popular and, but I think, you know, the demand is obviously continuing to grow for home care beds and, and the thing is, Medicare doesn't really get involved. You know, this is the thing. So all of this stuff is out of pocket, right? Used to be 100 years ago, you could call and be like, oh, I want to get hospital bed in a store like ours. Evidently, I was never in this business years ago. But you say, Oh yeah, we'll process your new hospital bed through Medicare. Nobody does that anymore. I wish it was that way. It'd be great. It'd be better for everyone. So it is out of pocket for these customers. So that adds to sort of the like, Hey, I spent 10 grand on a bed. You know? Course, they're going to be a little hyped up, a little nervous, so it's our job to keep everybody calm and calling them constantly, you know, as it's making its way there, and as opposed to them just looking out the level lures, remember the level lures, those old blinds, look out the levelleures, and be like, Honey, look, the guys are here. That would never happen with us. Customers know, days in advance, we have to plan, do a lot of planning, so it's, it's a major event when we're delivering, because it's such this big. And a lot of times the family's out front and they're like, Oh, my God, this is so great. You know, finally, mom will be able to sleep better. So it's, like, a big thing, you know?
Andrew Maff 25:04
Yeah, very cool. Todd, this was awesome. I don't want to take time and you're super busy. Amazing story, amazing background, amazing way that you've tackled all of the nuanced issues with the business. I'd love to give you the floor, let everyone know where they can find out more about you, and, of course, more about SlumberSource.
Todd Cook 25:37
Yeah, just go to direct your browser to slumbersource.com, and we're only hospital beds, home care beds. We know everything about these beds, and we'll take care of you. Just call us. We'll answer all your questions about what you think you might need, what the caregivers think you might need, what you don't think you need. And you know, we'll get calls from the family will say, look, the doctor just told us we need to check every single box. So we need a bed that does this, this, this, this and this, we have that. Or if you just need a bed that does this and this and this, we do that too. So we're here to answer all your questions. It was great talking to you!
Andrew Maff 26:15
Beautiful. Todd, thank you so much for being on the show. Thanks for having everybody tuned in. Thank you, sir. Thank you as well. Please make sure you do the usual thing, rate review, subscribe all that fun stuff on whichever podcast platform you prefer, or head over to the Ecommshow.com to check out all of our previous episodes. But as usual, thank you all for joining us. See you all next time, have a good one!
Narrator 26:38
Thank you for tuning in to the Ecomm show. Head over to Ecommshow.com to subscribe on your favorite podcast platform or on the BlueTusker YouTube channel. The Ecomm Show is brought to you by BlueTusker, a full service digital marketing company specifically for E commerce sellers looking to accelerate their growth. Go to bluetuskr.com now for more information, make sure to tune in next week for another amazing episode of the Ecomm Show!