Latest / Talk Commerce / Shading the Competition: Ecommerce Success Secrets with Joe Earley
Transcript
- Brent Peterson (00:02.666) Welcome to this episode of Talk Commerce. Today, we have Joe Early from Tefosi, the best sunglasses in the world. Joe, go ahead, do an introduction for yourself. Tell us your day-to-day role and maybe one of your passions in life. Joe Earley (00:15.812) I'm Joe Early. I am the president here at Tifosi Optics, so that means I do whatever Elizabeth, my wife, who I work with, tells me to do. And passions in life definitely have been family, but I love to ride my bike, so I've been cycling for 30 plus years, and that's sort of what started and led us on this journey. Brent Peterson (00:35.118) That's awesome, good. Joe, before we get started into content, you did volunteer to be part of the free joke project. So all I'm gonna do is tell you a joke. I should have picked a bike joke, but I didn't. I have a different style of joke. It involves some physical movement, but not a lot. So I'm gonna tell you the joke. All you have to do is say, should this joke be free or do you think someday we should charge for it? So here we go. What do you call a one-legged hippo? A hop-o? Joe Earley (01:05.469) Yeah, I think you have a tough time charging for that, Brent. So it's got to be free. Brent Peterson (01:05.682) Yeah, I know that was definitely sorry. Yep. So, so Joe, tell us, I'm a long time, I'm a long time customer of yours. And I love your sunglasses. So tell us a little bit how you got into it. It's a very competitive space, right? So tell us kind of like that journey, how you got into it and, and where you're at now. Joe Earley (01:23.1) Thank you very much. Joe Earley (01:35.156) Sure, yeah, so it's been almost 21 years now we've been shipping product. And our background, my wife and I were independent sales reps in the cycling industry. So we sold to your local bike shops, your local running stores, some outdoor stores here all in the Southeast. And we sold lots of different products. We sold helmets and clothing and bikes and nutrition and sunglasses. And for those of you who don't know what an independent rep is, when you're independent rep, that means you're a, what's called a 1099 rep in the wholesale side of things. You get paid commission only, right? So if you sell something, you make a commission. If you don't sell something, you get nothing. So we were selling a great sunglass brand at the time, but we would make this good commission when we go by and sell the first time. We sell them a display of 24 pair, a 12 pair. And then we come around once a month to see our retailers and they'd have sold a pair. And we're like, Brent, look, it's hard for me to stop the car to sell one pair of sunglasses. How could we sell more sunglasses? And consistently the feedback we got from our retailers was if they had something nice that was a more reasonable price point, they thought they could sell more. The brand we were selling then was $100 and up with a lot of the products being $150 retail. And this was 20 years ago. And so we started looking to see, is there something we can rep that was already out there? We're calling friends in other territories that are sales reps and say, hey, do you see something like this? And consistently the feedback we got was no, or yeah, but it's just not very nice. And at the same time we had a customer at the time, Performance Bike, who is a big mail order company out of Chapel Hill, North Carolina that we were selling to. And they did private label sunglasses. And they had three lenses and came to the case and retailed around 50 or 60 bucks. And I was talking to the buyer there one day and I'm like, how do you do with these? And they were like, really well. He's like, somebody should- do this for the regular independent retailers. Yeah, somebody should. As an independent rep, you have a lot of time in the car. So you've got a lot of miles behind a windshield and you got a lot of time to think. And somehow we thought this would be a good idea. So I came home to my wife and said, hey, what about this? She was running our office and we were doing distribution for one of our companies on the East Coast. So we had built a warehouse here. So we had the shipping, pick pack ship knowledge. We had the sales knowledge. We just didn't have a product. Joe Earley (04:00.904) and we thought this is a hole in the market. So we went and found a product, found some products to offer, and in 2003 we launched with 24 total SKUs. And the first year we opened up about 500 retailers that carried the product, and the next year went to around 1,000. And now in the US we have about 3,500 retailers that carry the product. And that can be from your local bike shop, to we sell to running specialty retailers like Fleet Feet Sports, or... your local running stores to golf. We sell to all the Edwin Watts golf locations out there and we sell them outdoors. So REI carries this in all locations, places like Academy Sports, the sporting goods space. So we've been pretty blessed to be successful, but our model has been to offer this very high quality sunglass, but at a value to the end consumer. People talk about it all day long. You've had your brand you plug in the name, you know, they cost $150. You get them and you love them and you drop them within the first month and that scratch is always right in the worst spot. And you have this pit in your stomach, like, oh my gosh, that was $150, I just ruined it. And you know, we found that there's a, you know, a lot of consumers out there that want that quality, but they just want a more reasonable price point. And so that's what we've been able to kind of offer. Brent Peterson (05:27.002) How do you get around? I think that you're... So the quality of your sunglasses, I think are superior to the $150, whatever the price point is. And I think I have a pair of 15 year old Tefosi's. How do you work that into resale and getting people to buy more? Do you depend on having to have new lines of sunglasses? Joe Earley (05:54.68) Yeah, I mean, it's definitely a very competitive category. You know, when we talk about the Oakleys and the Raybans of the world, they're owned by a company called Esselux, which is a fantastic company. But they're $25 billion in sales and, you know, multiple brands and licenses. And you know, it's a very competitive space. So you definitely have to stay on the product gas. And for us, product is number one. So For instance, this spring we launched a new model last week in the Sanctum, which seems to be a home run for us that's in kind of the athleisure space. We've got a new performance piece launching next month. We've got two color stories coming the months after that and then another two new models coming the month after that. So you need to have, you gotta make sure that what you're selling is continuing to earn and you're on top of the trends in the market. Because of our positioning, we're not. We don't have to be on the leading edge of fashion, but we definitely follow those trends. And as our business has changed over the last six years, where we used to just be a pure performance product, now we sell a lot of what I would call athleisure products, what we call our swank family of goods. These are sport wayfarers, for lack of a better term. They've got different silhouettes to them, but they're more casual oriented. You do definitely have to have a stronger, fashion element and casual element to the product than just your shield designs for going out and running or cycling. Brent Peterson (07:24.631) Do you think there's a difference between how you got into the market or maybe it's the time of the time that you did it? I don't see a big opportunity now for a new player to come in. And honestly, when I think about running sunglasses, you're supposed to be the one that I'd go to as my premium ones. And then I guess if I had some other sunglasses that I had to put on, I would. I would think that as you go into a running store, there might be another brand that is a really cheap brand that the lenses wear off, and then there's your brand in there. How do you position yourself and make sure that you're still maintaining that space? Joe Earley (08:06.416) Yeah, I mean, again, it is a very competitive space. And as we've been in the business 20 years, we've seen lots of brands come and go in the space. A lot of people look at it and go, gosh, you know, there's, it's sunglasses. This is a great margin business. You've got these $25 billion companies out here. It's a, in just sunglasses in the U.S., just sports category is a $4 to $5 billion category. So people look at it and go, wow, it's big. I want to be here. But it is. very, very competitive and to think you can just open up shop and not have anything distinctive to do versus the competition, you're just not going to get anywhere. We're a small operation, 30 some odd people, but... you've got to stay on the gas all the time. You're even sleeping and breathing it. Like a lot of, I'm sure your listeners from this being entrepreneurs, you're never really off. But if you go into a run specialty space, for instance, the business has shifted a lot. It used to be very performance driven, and now it's very lifestyle driven. So we try to offer this very high quality product that- you know, you don't look at as a disposable product, even though we have products that retail at $25. You know, our competitor in that space, it's a disposable product. They kind of sell things more on just the fun of it. And if they break or tear up, then they just break or tear up. And that's not what we really built the brand on. So we can't really do that. Brent Peterson (09:40.739) This is an e-commerce podcast. So have you, are you doing direct to consumer as well as wholesale to your regular retailers? Joe Earley (09:49.616) Yeah, it's a pretty substantial part of our business now. You know, 2018, it was less than 5% of our total business. I think our domestic, last year, you know, we're approaching... we're over 40% probably, is direct to consumer, either on our website or on our own Amazon store. We feel like Amazon is in that same space and we've now tried to do, not tried, but we are now doing those listings and our products on Amazon ourselves. And that's a shift over the last three or four years. Brent Peterson (10:24.97) And do you see a challenge in that when you have retailers and you have your own, do you, you obviously don't want to undercut them. Is it the same as, as say running shoes where the running shoes, people really want you to go to the small running store to get your shoes, but they'll also sell it direct. Joe Earley (10:43.072) Yeah, I mean, the fact of the matter is now there's just consumers out there that they would rather just click it and have it shipped to the house, whether it's sunglasses or running shoes or whatever. So you have to service. At the end of the day, we're servicing the end consumer. Our running specialty stores, our bike specialty stores, people like REI, they're incredibly important to us. We're not a, I think a lot of companies look at, they say they either be direct to consumer or I'm going to be wholesale. For us. as Jim Collins would say, we look at it as the beauty of the and, it's not an or proposition. Because we have consumers that wanna go in and try the glasses and buy them right there. They don't wanna wait for something to get there. They wanna just pick them up that day. And because of our price point, we do tend to be an impulse item too. So if you're in picking up new running shoes or you're buying a new bike or just picking up your bike for service, we have people that'll buy products right off the rack there. So the wholesale business is something that... we built the company on and something that we know, I guess with Elizabeth and I, it's kind of in our DNA because that's what we did before this for, you know, a dozen years before we started this. So supporting retailers and kind of working through them to help get the end consumer serviced is part of it. Are there people that are gonna come on our website and buy? Yes, but it's gonna be the same price as what they can go to our local, you know, specialty retailer and buy them for. We don't. we don't undercut our retailers. That's just not part of our model. And that's one of the other reasons we took over the Amazon space as well is to be able to control the pricing better because we were finding that, you know, either different resellers or Amazons themselves at times would discount the product and that's not what we wanted to have happen. Brent Peterson (12:20.714) Um, when you, when, when you enlist in Amazon like that, do you, um, how do you control what other people are doing as, as a third party or can you control that? Joe Earley (12:32.748) Well, I mean, we have in our in our retailer agreement that we just don't allow third party reselling. So, you know, we want them to, they should be bringing value for the consumer outside of this third party marketplaces. You know, if they're just selling on Amazon, and that's what their business is, that's not a type of retailer that we're adding at this point, we want a brick and mortar retailer or someone who has their own e commerce site that brings value for us as a brand and for the end consumer. As soon as you offer it on Amazon and it has Prime, it doesn't matter whether I'm selling it or you're selling it or Amazon's selling it. If it has the Prime button on it, the consumer, that's what they want. So, you know, that was part of the strategic decision we made was to move away from having so many resellers doing it. We do have some resellers that still sell on the platform for us now, but they tend to be people who bring us value outside of just that platform. Brent Peterson (13:29.398) Are you seeing more running or biking now? Are you evenly split or what do you see more of? Joe Earley (13:37.044) No, our business is still, you got to think about the size of the retail landscape. So running specialty retailers, there's about a thousand. Cycling stores, there's probably closer to four thousand. So there's a larger dealer base in bike. So right now we do sell a little bit, not a little bit, but we sell more in cycling. We actually see running specialty though, it has the opportunity to be just as big as cycling right now because running specialty retailers are actually selling more sunglasses in each door than a bike shop does, which is really interesting because cycling eyewear is part of the outfit, right? It's part of the must-have product. You know, if you're going to go out and road ride an average 16, 17, 20 miles an hour, 25 miles an hour, however fast you are, you need that wind protection, you need protection from, you know, debris. In running, you know, you go to a 5K, 10K marathon, it's a small percentage of people that actually wear sunglasses, even though they should be. But because of the growth of this lifestyle category, in running specialty, it's very much female-focused. It's probably 60 or 65% of the retail business who run specialty is women. And for them, it's more of a lifestyle. You know, so they're... getting their running shoes, match their outfit, and matches their sunglasses. So they will buy multiple pairs, whereas you talk about cycling, you know, it's male dominated and guys, once you have a pair of sunglasses for you to go ride your bike in, you have a pair of sunglasses. Sometimes you get two, but we're not really the same that way. So running specialty has actually exploded in what it's selling at retail in the sunglass category. The biz space has gone and it's almost 10 times the size it was six years ago right now. Brent Peterson (15:27.126) What about athletes? Are you seeing, are you doing sponsored athletes? Are you seeing that space coming in for sunglasses? Joe Earley (15:32.884) That's interesting. So part of what we've kind of said as a brand from day one is that we don't pay professional athletes. That's how we keep the price of the eyewear down. What we have seen and what we have started to do is we do collaborate with some, what I would call the more influencers. They might be, I would consider an elite athlete, but we partner with them not because of their results in cycling or in running. It's more about the content that they produce and the following they have on social media to help expose our brand to their followers. We've got the vegan cyclist, Tyler Pierce, on the cycling side of things. This year we just signed Hella, who's a fantastic guy, who's been running, May 15th, who will have been running for seven years every single day for seven years. But this is a guy who runs a marathon at, you know, close to three hour pace, I believe. So he's a stud athlete too. He's a former professional soccer player, I believe, is his background. And then we just signed a new pickleball influencer who won Survivor, but we're working with him because of his pickleball audience. But it's not, you know, we're less interested in professional athletes that might, I guess their exposure is all dependent on results. Ours is more about creating a bigger community for us and tapping into the community that these FOTH people have and the content they provide, to be honest. That's been really interesting for us to see that aspect of our business change and grow and continue to feed that content beast is really important for us now. Brent Peterson (17:18.87) Yeah, I think you took my next question was the pickleball sunglasses. Are there going to be pickleball sunglasses and what do they look like? Joe Earley (17:27.28) Well, for us, pickleball sunglasses are pretty much anything that we offer because they're all shatterproof polycarbonate lens. So they were designed for cycling to begin with. When we look at a lot of our competitors, they offer what's called a tack lens, which is it's a flimsy lens that doesn't provide impact protection. And if you've played pickleball before, which it's been the fastest growing sport for a long time, but it's actually becoming pretty mainstream now. Through COVID, it obviously blew up and it's continuing to grow. That ball's pretty hard and a lot of the play is at the nets coming at pretty quick So there are a decent amount of eye injuries that happen. So wearing something to give you some protection Plus me when you're out in any activity whether that's running You know if you do it in a marathon if I was doing a marathon my pace would be I'd be out there for half a day So you need to have that UV protection while you're out there as well, but Pickleball has been an area where we started to see reviews on our website where people were buying them and they're like, oh, I'm using these for pickleball, these are great. And we're like, wait a minute. So then we started setting up campaigns to market to them. We're like, well, these pickleball campaigns are doing really well. And then, so in the last six months, we started hiring some pickleball reps to go open up pickleball wholesalers. We've had tennis accounts before, but it didn't seem to have quite the, say quite the excitement behind it that we're seeing behind the pickleball side, even though tennis has been around and is a larger. sport than pickleball. It's growing in a hurry. Brent Peterson (18:53.29) Yeah, I guess now that you mention it, we both saw each other at Tree at the running event. And there was... Pickleball was there. Pickleball was a part of the event. Joe Earley (19:00.318) Mm-hmm. Yeah, what's interesting is, you know, we went to TRE, the running show in Austin, and then I was at the PGA show down in Orlando and almost directly across from our booth at the golf show, they had a pickleball area as well. So, um, there is no pickleball industry show. So some of these other shows are trying to attract that crowd. I will say it was, that area was very busy at the, uh, at the golf event. I don't know whether it was people specifically coming to look at pickleball products or if they were just. interesting to see what was going on because they had two courts set up there and people playing and pros they're playing so it was a It was a happening little area Brent Peterson (19:41.002) Um, it, you don't have to disclose technology, but one, one great thing about your lenses is they, is they don't scratch and I, I'm a runner and I've dropped my lens, I've dropped my, my sunglasses while running many times. And even sometimes it seems like they fall directly on the top of the lens. There's usable there. Like the worst thing I get is, you know, after 15 years, they, they're starting to show a little pitting from my, from road, right, maybe too much riding. was sandkitting them, right? Like, I, how do you do it? Joe Earley (20:17.492) Well, all the lenses are polycarbonate. We also do something called hard coating it. So when you hard coat the lens, that helps, I would say, reduce scratching. There is, and I'll be transparent with everybody here, there's no way to make a scratch-proof lens. Actually, the most scratch-resistant lens you can offer is actually glass. So glass is really hard to scratch, just it's very easy to break. So you want something that's giving you impact protection, that's got great optical quality, and it's not too easy to scratch. Our lenses aren't scratch-proof. I mean, I'll be clear on that. But we do hard coat them to try to prevent that. But I mean, you know, it's one of those things that it depends on how people care for the product, what happens with them. I mean, I find if I toss a pair in my wife's purse and let them jingle around in there for a week, it's amazing what can happen to them. It's worse than Brent. Yours probably look after, you know, 10 years of riding or running with them. So it really just depends on the conditions. But usually if you just wash the glasses with warm water and just hand soap, you can get just about anything off of them. And that, taking care of them that way is a great idea. We also sell them with a cleaning bag that you can keep the product in. But the reality is like I clean my glasses usually with my t-shirt. So, you know, that's the reality of how people use them day in and day out. You need to make something that's durable. Brent Peterson (21:38.026) You did mention earlier about, about you should always have your sunglasses on when you're in the sun is tell us some reasoning. Like I always have a hat on for some obvious reasons and I always wear my sunglasses and I just feel like it's probably just good for your eyes. Right. Joe Earley (21:50.244) Well, I mean, it's exactly the same as your skin. So you can sunburn your eyes. So you think about it, anytime you're out there, you and I both have the same haircut here, which is none at all. I'm wearing a hat or I'm wearing sunscreen when I'm cycling, I'm putting sunscreen on my ears and all that, but you wouldn't go out there and hang out in the sun for three or four hours without doing that. you know, you need to protect your eyes. So you do cause the same damage to your eyes, multiple sunburns, it's gonna make your eyesight degenerate faster than it already is. I mean, I've just turned 50 this last year, so suddenly now I'm needing to keep a pair of readers around all the time anyway, but you know, that's something you're gonna accelerate the more exposure you have to the sun. Brent Peterson (22:39.387) Joe, we have a few minutes left. What do you see as the trend besides pickleball this year, 2024, in the sport optic space? Joe Earley (22:50.068) Two big trends we're seeing, two big trends. So on the Pure Performance product, we've been seeing the shift to larger shield designs. And that's been several years now, and that's still very strong, but we're seeing that larger shield now trans come over to the lifestyle products. So we just launched a new product called Sanctum last week. It is at, not last week, two weeks ago, on the first of February. Since we introduced our lifestyle product called Swank, it has always been a number one selling sunglass. And the Sanctum is now out, it's outsold. It's been the number one seller on our website for now 12 days straight and by large margins. So the big shield coming to lifestyle and then color. It used to be black was the number one seller. Anytime we came out with the sunglass, you'd have four or five colors. And if you had a black version, it was always number one. That's not it right now. It's all about fun, bright colors. So if you looked at this new Sanctum piece, there's a, it's... we've got one that's a satin clear frame with a pink mirror. That's the number one seller. The green mirror is number two. The blue mirror is number three. Black is actually the worst seller out of the collection, which I mean if you'd have told me that even three years ago, I'd have been like you're crazy. So color and then the big shield are something that's still continuing to trend for us. Brent Peterson (24:08.49) Yeah, I've seen quite a few. I mean, we watched track and field as well. And I see that even the indoor, they'll wear those big sunglasses while running around the track. Uh, Joe, we have a few minutes left. I give everybody a chance to do a shameless plug about anything you want. What would you like to plug today? Joe Earley (24:26.42) Shameless plug about anything. Okay, well, I mean, obviously love all of your listeners to check out our website. I think next time they're looking for a pair of sunglasses to think about it. That's just tevosioptics.com. We offer regular sunglasses, sunglasses for sports, and we offer prescription sunglasses. So if you're looking for your next RX, take a look. We're shameless and now we've plugged. Brent Peterson (24:47.302) All right, thanks, Joe. And I'll make sure I'll put those in the show notes. Joe Early, the founder of Tifasi Optics. Thank you so much for being here today. Joe Earley (24:55.88) Thanks so much, Brent.