Latest / Beyond Fulfillment Podcast / He Started With $20 on eBay & Built Discount Vape Pen: Mark Pitts's Road to a Million Dollar Empire
Transcript
- 0:00Foreign.
- 0:06Mark Pitts, welcome to Beyond Fulfillment.
- 0:09Thanks for having me, man.
- 0:11Absolutely.
- 0:12Very excited to talk to you today.
- 0:14So Mark, you are the co founder of Discount Vape Pen.
- 0:18And that's a company that's been in the Vape Pen space for, for over the last decade.
- 0:24And you've got quite a, quite an interesting, almost a classic entrepreneurial story of how you got started and how you, how you grew and scaled this company, which is quite, you know, it's what I think all the entrepreneurs
- 0:38listening will really resonate with.
- 0:40But could you just, just to set the stage for our listeners, can you talk about how you got started and how you got here?
- 0:45Yeah, absolutely.
- 0:46So around 2007, you know, I graduated high school, so I go into college, 0708 went in for marketing.
- 0:57And in the course of that, probably a couple years in, this is Also, you know, 2007 is the beginning of the iPhone.
- 1:07So coming into school, I'm very excited about marketing.
- 1:11I'm wanting to learn about apps, I'm wanting to learn about products and these things like that.
- 1:16These things are very new.
- 1:18And I learned that wasn't the, in the curriculum.
- 1:23Curriculum, excuse me, curriculum yet.
- 1:26And so I decided to try and venture out on my own and I left school and a couple years after that I met a friend and he showed me this, this device.
- 1:40And this is during the time where I'm pretty much just throwing things up on, on ebay.
- 1:44I've learned about, you know, sites like Alibaba, Aliexpress, where you can start sourcing some random products from, you know, all over the world.
- 1:53So I'm playing around with ebay, trying to make a little side hustle there.
- 1:57Gives me this device.
- 1:59It's a battery.
- 2:00He's telling me what they're doing with it out in California and I'm like, oh, this, this, this is pretty cool.
- 2:05I've never seen anything like this.
- 2:06Over here.
- 2:08Let me grab a couple, you know, spend about 20 bucks, put them, put that on ebay.
- 2:15And that thing is one of these vape pens.
- 2:18Put that on ebay.
- 2:19It goes right away.
- 2:21And, and in my mind I'm thinking small at the time, like, oh great, I might have something that could make me a couple hundred bucks a month, get rid of my phone bill, that type thing.
- 2:31And every time I spent 20, then I'm spending 40, then I'm spending 200 and it's just going, going, going.
- 2:39And that's when I look at my partner, the other co founder, because we were both doing the same thing, putting products up on ebay.
- 2:47And we were like, you know, this might be something.
- 2:51And put.
- 2:52Put a couple more dollars behind it and started what we got today.
- 2:56Okay.
- 2:56Love that.
- 2:57And so much to unpack just in that short little intro.
- 3:01So let's just start.
- 3:02So.
- 3:03So you go to college, you're excited, right?
- 3:06You're in marketing, you're going to college, you want to learn.
- 3:09It's like the time the iPhone just comes out.
- 3:11Apps are now a thing.
- 3:12It's new.
- 3:13You're a young kid, you're ambitious, and then you find out they're not even teaching that in school.
- 3:19Yes.
- 3:19It was nowhere in there.
- 3:21It was.
- 3:22I was learning more from magazines like Entrepreneur Mag from Inc.
- 3:27Than I was in the classes there.
- 3:31You don't really even get into your core classes until a couple years in, only to find out that they're still on billboards.
- 3:38And what the difference between a slice of life commercial and, you know, a testimonial commercial.
- 3:47And I'm like, well, when do we get into the.
- 3:50To the apps like, this is taking over.
- 3:52And they had no answers for me.
- 3:54There's nothing in textbooks yet.
- 3:57So I, I was like, I could either continue with this and maybe it doesn't take me anywhere.
- 4:04Maybe I'll land a job somewhere that I don't really like because it's not doing the thing, or I could just, you know, get going on my own.
- 4:15And that's.
- 4:15That's kind of always how I've been anyway.
- 4:19Even as a, even as a kid, you know, I was always into, like, I was always into business.
- 4:25You know, I'm looking at business books.
- 4:27Some of my favorite, you know, movies back then were, you know, like the game.
- 4:32Anything really business related.
- 4:37Those were excited me.
- 4:38So I just, I just left, you know, probably about my third year in.
- 4:42Halfway in, I was like, I can't do this.
- 4:45So I took off and then tried to just try to hack the Internet on my own.
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- 5:37Wow.
- 5:38Yeah.
- 5:38And that's a whole other conversation we could have about the relevance of college and how is it keeping up with the way the world's advancing, particularly for business and entrepreneurship.
- 5:49But okay, so you, you decide you're out, you're going to just figure it out on your own.
- 5:54You get into this affiliate marketing, e commerce and ebay and all these sites are starting to really rise to prominence around this time.
- 6:03So you're playing around, selling some stuff and you come across the vape pen, which had just recently been invented at that time.
- 6:09Like you said, you spend a few bucks on it, you throw it up online, it sells right away, you buy more, sells right away.
- 6:18And again, it's starting to, starting to take off.
- 6:20And initially, like you said, you're thinking small, maybe a few hundred bucks here or there.
- 6:24But then as it continues to grow, the light bulbs went off somewhere and you realize this is really a thing that could, that could really grow.
- 6:32You had a co founder who's now your co founder you're connected with at that time.
- 6:36So when those light bulbs start to go off and you think this could be a real opportunity here, like what, what happens next?
- 6:44So the next thing there.
- 6:45Well, at that time, me and my co founder, we were already at the mindset of, you know, we want to create some sort of business.
- 6:55We had tried our hand in something way earlier in the food industry, like try to do like a, like a little coffee sh.
- 7:04Deli, but that wasn't us.
- 7:07So we were still searching and you know, I guess, I guess what was going off in, in our minds once this product started catching on is like, okay, I think, I think this is the thing we've been looking
- 7:21for.
- 7:22You know, maybe we can really take another stab at, you know, enterprise basically and see if, hey, maybe we can turn this into a local shop.
- 7:33Right?
- 7:33That was, that was really our next step was a local shop and you know, to have our listing online on Google.
- 7:42We weren't so heavy on the E commerce.
- 7:47Even though the website came before we actually were able to open our doors in our brick and mortar store.
- 7:54But the brick and mortar was the, the idea at the time to go for, you know, the next level just to see, you know, what, what we could drum up.
- 8:06It wasn't so big as it is now.
- 8:10There, there were shops few and far between.
- 8:13Smoke shop and vape shop were two very separate things and, but we knew that there was a demand for it.
- 8:19I had been to, you know, a couple vape shops Myself had.
- 8:24Conventions were already happening.
- 8:26So I'm like, all right, there's.
- 8:28There's definitely something here.
- 8:29And that's where.
- 8:30Where we got started, we just decided to start buying some office furniture and like, some display cases.
- 8:36And we get.
- 8:37We got started there.
- 8:38Okay.
- 8:39All right.
- 8:39So you're thinking brick and mortar, you know, and this is during the rise of E Commerce, so maybe you might not have even.
- 8:46Right.
- 8:46It was so new at the time, right.
- 8:48Like, it's.
- 8:49It seems almost natural to still gravitate towards brick and mortar.
- 8:53So you, You.
- 8:54You kind of throw it together and you get the open up.
- 8:57How did it do when you first opened up?
- 9:00It was.
- 9:00It was very interesting, right?
- 9:03We.
- 9:03We always understood the.
- 9:06The idea of, you know, if you build it, they will come is not really a thing.
- 9:11We understood that.
- 9:12But with this thing in particular, it had such like a magnetism to it.
- 9:18If you remember the.
- 9:20This in the beginning, everybody would go out and they.
- 9:23They'd use them and they blow up these huge clouds of smoke.
- 9:26And it kind of like is.
- 9:27Where is that coming from?
- 9:29Usually get that.
- 9:30That look like, who is.
- 9:31Who's doing this?
- 9:33So when we first got it, we.
- 9:34Sometimes we'd stand outside in front and we, you know, use the vape blowing up these huge clouds.
- 9:40And we happen to be in a little plaza with a.
- 9:44With a pizza place next to us.
- 9:45So it had some traffic on its own.
- 9:48And, you know, little by little, but not very much long after, within about probably six months, we had.
- 9:54We started to have regulars.
- 9:56And you know, for us, that's like, you know, we got something like.
- 10:01We got regular guys who come in and they come and chat with us.
- 10:05We're.
- 10:06We're building something here.
- 10:08We didn't know how big, but okay, we.
- 10:11We have something that we can continue to pour into.
- 10:15And.
- 10:15And then, you know, within about a year, we had it.
- 10:18We had a nice, decent, decent flow in there.
- 10:22And it was nice, you know, people pretty.
- 10:26From all ages, really, because a lot of people were getting away from cigarettes because of the smell.
- 10:31So we had all ages coming there, and it was kind of very much like community driven, if that makes any sense.
- 10:40There's just people from the local area and they.
- 10:43They'd hang out there.
- 10:45Of course they'd spend, but they'd hang out there.
- 10:47And, you know, we kind of became a little staple in the little town that we ran.
- 10:51Okay.
- 10:52And given that, like, you were so new in business, right?
- 10:56Just kind of recently out of high school, dropped out of college.
- 10:59You seem to have this natural entrepreneurial spark.
- 11:04Even after some early failures, we're still always looking out for, like, what's going to be the next thing, what, what kind of business can I get into?
- 11:10And then you find something that starts to take off.
- 11:12How did you navigate, like, all the things that come along with learning how to operate a real retail establishment and all the other aspects of running a business maybe that you, you had, you'd have to learn on the
- 11:26fly.
- 11:27A ton of, a ton of trial and error, really.
- 11:30We didn't have any, you know, any large loans.
- 11:35We didn't have any kind of backing.
- 11:37So it's all bootstrapped, right?
- 11:39It's me and my partner.
- 11:40It's our own money.
- 11:41So when that's the case, you are a lot more cautious in spending.
- 11:48And that is, you know, a good, a good thing to have, at least from my experience, when starting a business.
- 11:56If you start off and you, you walk into a, a business, you open your doors for the first time and you have a huge loan behind you and you still got some of that, that, that investment in the
- 12:07bank, you're not so, so aware of your spending, and then you cut, you fall into traps because everything doesn't work for everybody, right?
- 12:19So what worked for my shop might not work for another shop.
- 12:24And if we had started with, you know, some, some sort of, you know, investor, whether it be the bank or somebody private, we might have looked at other shops and kind of copied what they were doing and could
- 12:40have, you know, broken down a lot sooner than, you know, how we started.
- 12:47Just because we, we were going off of someone else's experience, that it isn't our own.
- 12:53We're not, we're not very conscious of how we're buying.
- 12:57And, you know, that's, I hope I'm answering the question, but that's, that's more or less one of the things that kind of helped us along, that we were not backed by anything.
- 13:10It made it tougher, definitely.
- 13:12Especially when you're trying to maintain inventory and trying to figure out what it is that people are interested in the most when there's seemingly new devices and products coming out every week.
- 13:25You know, it helped us, help us grow in the right way, I should say, by just being fearful of making the wrong decision.
- 13:34Okay, so you're saying the fact that, like, again, you had no formal training, any of this, you just had to figure it out as you go.
- 13:41A lot of trial and error, and the fact that you're bootstrapped and you didn't have a huge budget or huge backend.
- 13:46You really, you really felt the ramifications of every financial decision right away.
- 13:51So therefore, that caution really, I guess, helped you early on by not maybe making any foolish investments or spending too much in this area, in that area, and just being very frugal as you kind of scale the business.
- 14:03Is that fair to say?
- 14:03Absolutely.
- 14:04Absolutely.
- 14:05Okay.
- 14:06Well, during those early years, too, especially when it was challenging and just trying to figure all that out, was there ever a point in time you thought about giving up?
- 14:14No, I was much more stubborn when I was younger, you know, 13, 15 years ago.
- 14:22So at that time, I'm thinking, you know, we're just going to win.
- 14:25We're going to figure it out.
- 14:26We're going to.
- 14:26We're going to put this together.
- 14:28There's.
- 14:28There's no way out at this point.
- 14:30And.
- 14:30And part of that is that I never really wanted to work for some sort of corporation or anything like that or have to go back into that.
- 14:41So it was also one of those things where we were looking to find, you know, some freedom in some sense.
- 14:48So to quit this meant to go back to a way where, you know, our schedule is determined for us and things of that nature.
- 14:58Okay.
- 14:59All right.
- 14:59So then as you're growing and scaling, what was the inflection point where things really started to take off for you?
- 15:06Yeah, so we.
- 15:08We started our store and the website not at the same moment in time, but they were both in about 2014.
- 15:17So by 2015, when we would have, like I was saying, we had some regular customers at that point.
- 15:25We had a daily, constant flow, you know, but now we've got some.
- 15:31Some actual stock that was, I want to say, after the holidays of 2014 and beginning of 2015.
- 15:38That was the time when we were seeing actual, like, revenue beyond what.
- 15:45What we would spend.
- 15:47Right.
- 15:48So that's the point where we're looking at the, like, scaling up, like, okay, now we really need to take things to the next level.
- 15:57We need to really dial in on the E commerce side because, you know, we are getting more traffic from online sales.
- 16:07We still had ebay running at this time, by the way.
- 16:10So we had a website and we had ebay running.
- 16:13And now we're learning about e commerce and our branding and, you know, pretty much owning everything that we put out.
- 16:24And I believe that's when we cut our ebay site and our ebay store, I should say, and started to go just solely e commerce via our website and, you know, started making the store a little bit more robust,
- 16:43adding the Products, employees, that was, that was that period of time.
- 16:49That's what we've seen.
- 16:52So you're getting some real growth, right?
- 16:54You decide to just cut ebay and stop paying the higher commissions and just direct it all to your own site.
- 17:00The store is doing well and now you're actually hiring, you're hiring employees.
- 17:04What was that like for the first time when it was just you guys kind of bootstrapping your own money and now you're actually scaling up and hiring employees.
- 17:12How did that change things?
- 17:14Excuse me.
- 17:15That was interesting.
- 17:17We didn't do it in the way that most people do.
- 17:23I guess most companies do.
- 17:24There wasn't, at that time, there wasn't.
- 17:26You could still like get a newspaper and find a job.
- 17:28But we weren't doing anything like that.
- 17:30Indeed was very, very young.
- 17:33So we hadn't used any of those tools online.
- 17:37It was all kind of off referrals.
- 17:41So one of our first customers actually became our first employee.
- 17:45He was so knowledgeable of these, the product itself, and he was there every other day.
- 17:52And it was like it was a no brainer for us.
- 17:54Okay, we're gonna get you in.
- 17:57And we started with him, and then through him we got a couple of our other employees.
- 18:02Just because it only made sense.
- 18:04You know, it's a very technical product.
- 18:07Especially at that time when there was not much information out about it.
- 18:11You kind of needed to know some, some of the, the components in a different way.
- 18:18You need to know a little bit about electricity.
- 18:21You need to know about resistance and voltage and all this thing.
- 18:24So if you knew this and this is the thing that you did, chances are your friends also notice.
- 18:29So our first customer became our first employee and some of his friends became our second and third employees because they all already knew this.
- 18:38So it was easy in the beginning.
- 18:42Plus, you know, it helps when the product, you know, you want the product, so, you know, you can, we can work out, hash out a deal way in the beginning when it was like we were trying to figure
- 18:54out what do we, how do we pay someone for this?
- 18:58You're kind of like a, like a, like a tender, like a bartender in a sense at that time.
- 19:05So that's, that was, that was pretty easy for us actually, until the later years when we started using.
- 19:11Indeed.
- 19:11And things like that.
- 19:12Okay, all right.
- 19:13And just with the regulation around that time with the product being so new.
- 19:18Right.
- 19:19And everything, kind of almost like a wild west type of vibe when it was kind of coming out, like, how did you handle the regulations around that product?
- 19:28Well, There really wasn't any.
- 19:30It really wasn't any until about 2018, 2017, 2018 there.
- 19:38The tobacco departments at this time were pretty much just New Jersey.
- 19:43We got sales, you know, in different states, but the bulk of our revenue was coming from our brick and mortar store.
- 19:50And the first, probably like three years or so, and there really wasn't anything on it.
- 19:58They didn't know how to.
- 20:01I don't.
- 20:01I don't know how they end up coming up with this, but they didn't know how to measure, I guess, nicotine, if I'm looking back on it, which took them so long to create regulation.
- 20:14So we just tried to stay on top of what was already there for regular tobacco.
- 20:21Right.
- 20:21For.
- 20:21For cigarettes and things like that.
- 20:23So we, you know, got our regular licenses, and there really wasn't any.
- 20:32Any issue.
- 20:33And that was probably the best part of the.
- 20:38The industry because everybody had a chance to figure it out and to grow before, you know, getting slammed with all these.
- 20:47These regulations that to this day they're just kind of like making up new tax numbers every.
- 20:52Seems like every day.
- 20:54Yeah, it's.
- 20:55I see.
- 20:56I get notifications all the time at the.
- 20:58The new.
- 20:59A new rate somewhere.
- 21:00It's like, wow, you're still doing this.
- 21:03What.
- 21:03So when that finally happens, right, when the regulations catch up and they start making all those, you know, those new rules, like, how did that impact the business?
- 21:14Yeah, I mean, it was tough because now we had to do so many more steps on the administration side.
- 21:23Like, now you got monthly paperwork where you got to calculate all these things, you know, decimal points of.
- 21:32Of amounts of nicotine.
- 21:34You got to have different licenses in every state.
- 21:37So it didn't.
- 21:37It wasn't this way until they made vape its own license.
- 21:42Then they started making licenses for the certain, certain containers of nicotine.
- 21:51So you get.
- 21:52You got free E juice.
- 21:55That's one type of thing.
- 21:57Then you got the pods beginning.
- 22:00We didn't even have disposable.
- 22:03The pens that you see at the gas station, those weren't even there yet until probably 2019 almost.
- 22:11So it was just once it started, it just never stopped.
- 22:15And then every year there's.
- 22:16There's something, you know, new that's just kind of chopping at you, chopping at the industry.
- 22:22Some people have not been able to hold up with it and got out.
- 22:29And, you know, that's.
- 22:31For us, that's.
- 22:32That's one of those things that could be a good thing, could be a bad thing.
- 22:36Right?
- 22:36There's, There's Less competition, sure.
- 22:40But you also shake out a lot of the bad actors and, and hands that aren't moving properly so that the whole industry can continue forward.
- 22:51Okay, so then what, so what, what did you do in response to that?
- 22:55Did you just continue along the same trajectory with the, the vape and, and just, you know, handle the regulations and continue to grow?
- 23:02Absolutely, absolutely.
- 23:04So, you know, we, we filed, did everything that we were supposed to do and kept moving along and kept, stayed up with the trend.
- 23:13There's obviously room in the industry where it doesn't have to involve tax products in this way outside of sales tax.
- 23:24Like the devices, for example.
- 23:26Devices come out all the time.
- 23:29They get trendy, they get interesting.
- 23:31At that point, there was a lot of things like mods.
- 23:37Mods were one where devices where you had to literally twist canthal wire and, you know, try and get it light, and people would have all these conventions and parties on it.
- 23:49So there are still areas of it that were unaffected.
- 23:54It's just the nicotine part that was the part that was hurting a lot of people, and you don't have to go that route.
- 24:02So we, you know, just, just, just leveled us out by having more products than anyone else, as opposed to having all these different nicotine flavors that were problematic because they got to go through whatever process of being taxed
- 24:20or make it into the market.
- 24:22There's a lot of, you know, like, form threads about different flavors and who's making it and you shouldn't buy this.
- 24:31So we kind of put that on hold a little bit and grew elsewhere.
- 24:36Okay.
- 24:37All right.
- 24:37And so where is the company at present day?
- 24:39Now, Right now we are completely online, discountvapin.com so we don't have brick and mortar stores anymore, and we are making a shift.
- 24:52Right.
- 24:52So these regulations are just getting more difficult to comply with.
- 24:59Not that it's impossible, but by the time, you know, I would say probably a year or so from now, the thing that attracted people to vape, which was having, you know, still being able to get your nicotine without
- 25:19the cigarette and everything that comes with the cigarette, the bad smell, the, you know, major health problems, the having to go outside in the cold, if you, if you need just to relax a little bit, if you want
- 25:35to, if you want to use, you know, smoke a cigarette or anything like that, that's going back.
- 25:42It's going back to what it kind of was.
- 25:45So the only things that are really going to be able to be bought as far as nicotine from a vape is the cigarette tasting, smelling thing that you were trying to get away from.
- 25:58So for us, we're continuing to pivot into devices.
- 26:05There are so many more choices for devices, especially with the rise of dispensaries.
- 26:11Many dispensaries do not hold devices.
- 26:16I'm not sure exactly if they're allowed to have both things, but many of the dispensaries don't have it.
- 26:23And we have always maintained that relationship with the different device brands.
- 26:28So we're in a good position to be a supplier of those, those materials as opposed to being in nicotine or in thc.
- 26:37So we're moving away from that and just becoming solely a device company.
- 26:44Okay, so you're leveraging your existing relationships in your history really to specialize in the one area that's not going to be impacted by these regulations where you can just niche down and that's, that's going to be where your
- 26:57niche is.
- 26:58Right.
- 26:58Okay.
- 26:59All right.
- 27:00And Mark, as you look back at this whole journey, right, the way you started dropping out of college, just kind of messing around online, coming across something, you know, continuing to take this messy, imperfect action and, and, you
- 27:13know, starting with a twenty dollar investment, selling it online and then scaling that into a multi million dollar company that's been around over a decade now.
- 27:23When you look back at all that, what's been the best part of it for you?
- 27:28Probably the, the freedom knowing that I'm in, in control of not just my schedule like everybody else would like to, you know, point out, but you're in control of your, your, your destiny in a sense.
- 27:40You know, there's no, there's no one above my partners and I to tell us that we can't do something.
- 27:49You know, sure, we're, we want to work within the limits of the law, of course, but no one makes our schedule right.
- 27:59We can expand or consolidate anywhere we want.
- 28:05We could move if we want to.
- 28:07We get to be with our, our families and not be, you know, confined to someone else's, you know, schedule of our time.
- 28:15So that's probably the best thing in, you know, all things aside, you know, there's a lot of stress in it, but I wouldn't change anything about, you know, I would start it where we are now.
- 28:30Okay, Love that.
- 28:31All right.
- 28:32And Mark, if people want to reach out, learn more about discount vape pen or you and your own story, or just connect with you online for any other reason, what's the best way people can find you online?
- 28:42The best way would be to go right to the website, discountvapen.com we have a live chat.
- 28:48A lot of times I'm in that live chat.
- 28:50So you can.
- 28:51You can jump in there and you'll see my face pop up.
- 28:54And it's not a bot, it's really me.
- 28:57Or you could go to my LinkedIn page, Mark Pitts, hook me up.
- 29:03Okay.
- 29:03All right, we'll link all that in the show notes for everyone as well.
- 29:06All right, Mark, thank you so much for taking the time to be here and sharing all this incredible wisdom from your journey with our listeners.
- 29:12We greatly appreciate it.
- 29:14Absolutely.
- 29:14I appreciate you having me.