This Company Has Paid Out $35 Million to Artists

James, so you've only had 1 minute to give artists the best advice you possibly could, what would you say? 1 minute on the clock. >> 1 minute, I I would keep it short and simple and I would say focus [music] on focus on creating the best art possible. Focus on your band I mean it sounds silly but [music] like focus on your musical output on your creativity and look to other areas where you can maybe offload things that you just have to do to be in a band. Like whether that's [music] like, you know, like what we do focusing on on merchandise and shipping orders. That's all stuff that you don't necessarily [music] have to be great at to be a great artist to make to make great art. So, [music] I think finding the things that really enhance and contribute to your artistic pursuit and looking at areas where you can [music] delegate is really important for How am I doing on time? 10 seconds? [music] >> Focus on making the best art possible and delegate the rest. >> [singing] [music] >> So, shall we do the tour? >> Yeah. >> Okay. Cool. So, yeah, I mean up here this is our main storage area where we have the majority of our inventory that we're selling on the store. >> Mhm. >> So, a lot of the >> [clears throat] >> inventory that gets received downstairs takes an elevator ride up here and it gets put on these racks and it gets stored here and everything is barcoded and everything is is itemized along this [music] wall here and this is where we see the pickers come through and they come in and pick the items as the orders come in and this is kind of where, you know, once the inventory lands and is processed, this is where it lives. So, [music] this is kind of like our main, you know, our main inventory area where, you know, where a lot of the active inventory that's selling through quickly it it it stays up here. >> Yeah, this is an overwhelming amount of boxes. >> right? >> Yeah. Yeah. >> You [laughter] know, it it it is and it's it's a lot of and it's not by any individual band either. Like it's all kind of put together based off of the space that is available up here. So, there's like there's multiple areas where there's two artists that have nothing to do with each other and you know, it's and it's uh >> how is it organized then? >> It's all by SKU. And it's all by available space. [music] So, everything gets a unique SKU. Everything gets put away here based off of the available space that our that our warehouse management [music] system tells us. So, if we have it like an available slot here, basically it will it will notify that this is you know, this is where we can put we can >> So, it doesn't matter if they're on the same label or it's merch by the same band. It's [music] just kind of like we have this slot and our inventory management software is going to tell us like go to R53 and then go to R51. >> Exactly. Exactly. It will tell it will tell us the the available space and it and it will give us a location for where we can put it away. So, you know, it's it's obviously we work with a bunch of different artists, bunch of different genres. A lot of it aren't necessarily related. So, you know, so there we we see a bunch >> Alicia Keys and Escape the Fate and uh The Contortionist. >> A little bit of everything. Yeah. A little bit of everything. So, it's not by genre, it's not by artist. It's really just based off of available space. So, you know, we have all of this up here and this was actually the first space that we moved into in this in this building. So, right now we take up four different >> [sighs] >> four different spaces that we've moved into and we've kind of taken over through time. But when we moved into this building in July of 2020, this was the first space that we moved into. And when we moved in here, we were like this is so much more space than we could ever imagine needing. >> Yeah. >> And luckily we've been able to keep growing and you know, expand within the building and you know, and kind of and move as we grow, kind of find more available space. >> Yeah. >> So, this is the area where all of the orders get shipped out. So, you see these pick carts here. Our pickers will go out and they'll find the items and put them in those bins and then the bins come through here and they get filtered through these [music] picking tables and this is where the actual labels are put on and where the uh where the shipping post gets processed and and uh >> Oh my god. >> and sent out. >> So, you just have people just like just >> Yeah. Yeah. picking and shipping and you see some of the items here. >> How many do you ship out a day? >> About 3,000 items and about 1,500 unique packages. >> Oh my god. >> Kind of goes all the way where everything goes into these bins. And goes all the way through here and when it gets busy like usually um you know, around holiday when it's really busy, we'll fill up all of these uh all of these aisles as well and it's um you know, and this is where all the labels are getting processed and packaged and and sent out. >> And that's just cranking through pretty >> our ghost our ghost shipper. [laughter] >> As as someone who ships out their own own CDs and merch and I you know, my band has a vinyl that's coming out. Uh this is wild. To see like the scale of it. >> The the orchestration of all of it. It's a lot of moving parts but you know, they're they're moving in unison. >> Yeah. >> Right? It it takes um you know, a lot of people doing a lot of different tasks for everything to come together and for somebody to actually receive a product that they ordered online. >> Yeah. >> You know. >> It's kind of a miracle that um you don't have frequent mistakes. I'm sure things go wrong >> Yeah. Yeah. >> from time to time but you know, um I'm assuming it's Well, actually you probably you guys probably know how >> Less how much the error rate is? >> and you error cuz like a customer's going to contact you. >> Yeah, so it's it's less than less than 1%. >> Nice. >> So, less than 1% of all the items items shipped um will either be defective or it will be a miss ship or a miss pack, but it's a it's a pretty low margin considering that there's, you know, 3,000 unique items going out every day. But >> obviously we're always trying to improve that, you know, and and make and make it as accurate as possible. >> Yeah. >> So, this is more inventory here and we'll we'll we can take a walk, right? Take a walk down here. So, a lot of this is the same deal as the other room where it's a lot of the available [clears throat] pickable inventory. See, there's another example of Downright merch. So. [laughter] Yeah, that's all of it is pick pickable inventory that's available on the on the artist web stores that lives here and then when an order comes in go back here scan the gun pick the order, put it in the pick card and then it goes to fulfillment. >> And that's also how you track inventory. >> Yes. >> Everything's barcoded. >> Yep, it's all in one inventory system. So, all of the SKUs, all of the the products are contained in one kind of in in in one portal. >> I can't imagine you just use Shopify's inventory management system, right? You got to have like some crazy custom >> It's not custom, but we have a platform that that works with Shopify. So, Shopify acts as the marketplace. [music] That's where the customers actually order and that's where the custom web stores are built on the Shopify platform. >> Yeah. >> The way that we keep track of all the inventory is through another platform called ShipHero where all of the SKUs live. That's where all of the the receiving and the purchase orders kind of all exists in that. So, ShipHero and Shopify talk to each other. >> Yeah. >> But they're two separate systems and to serve two separate purposes. >> You guys run like 200 stores, right? >> Yes. >> plus is what I think what I said last >> About 250 250 custom stores right now. >> So, that one inventory system syncs to all >> Yes. >> So, I'm guessing do you guys manually link each store like we have all this in their back end and we have to choose like these products go to this store, these products go to that store? >> Yes, so the way that it works is that the Shopify store, the custom Shopify store links to ShipHero. And when we're building new items and new products, it goes on Shopify and then that information talks to to ShipHero. >> Okay. >> So, all [music] of the products and all of the sales actually live in Shopify. Like that is the That's the website when you go to purchase for for an for an artist like, [music] you know, for like Set It Off. Like when you buy this Set It Off shirt, you go to their official website that we [music] manage, that we build, and that we, you know, we curate the product and you buy it through Shopify and then all of the back, you know, kind of back of house process all happens through ShipHero. That's where all the triggers happen where it gets picked, it goes to shipping, it gets it tells you what shipping label to use, what box to use. All of that All of that logic exists within ShipHero. >> Nice. Wild. So. >> It's a lot. >> It is a lot, yeah. >> We'll keep them moving. >> 250 stores, my god. >> Yeah, it's it's a it's a lot and there's and it's across all all different artists, different Whoa. >> Watch out. >> Yeah. >> [laughter] >> All different artists, different different, you know, brands. Like a lot of the stuff that we that we do is like outside of music. So, there's really not one Yeah, there's a lot of um you know, like we do a lot of like the Savannah Bananas. We do a few of their stores. >> So, that's the that's the the baseball team, right? >> Yeah, exactly. They're like >> dancing >> Yeah, the dancing baseball team. So, So, have a lot of webs like the a lot of their players have done their own merch stores and that and we um and we manage a lot of those. So, we'll go down here. We'll see the receiving area here where all of the new product comes in. It gets counted in over here. >> That's a fun machine. >> It's a poly bagger shrink or yeah. >> Yeah. >> Yeah, so you can see it gets processed the the poly it gets poly bagged. >> Yeah. >> Which helps on on space, you know, instead of having like a lot of the t-shirts just folded being able to poly bag saves us on a a lot of space. >> Okay, that makes sense. >> Yeah. >> I see a whole lot of A to Z Media. Um I'm guessing that's the biggest vinyl. >> That's a very common one. Yeah, there's so a lot of the a lot of the record labels that we deal with for our label service business, they get their product manufactured at A to Z. >> Yeah. >> Um so, that's definitely a common one. I would say like a lot of stuff comes from >> Pirates Press, too. Their prices are like amazing. Actually, I almost used them for for my band's vinyl. Um they they were like the cheapest option. I ended up going with someone else that was like a friend of a friend. >> Yeah. >> Um A to Z I think was really good price-wise. >> Mhm. >> Pirates Press was, too, and vinyl so expensive, so it makes sense. >> Well, for a lot of the vinyl, we actually we don't manufacture any of it for the the record labels that that we work with, that we partner with, they do all the manufacturing. So, it changes, it's kind of within their control. So, we're not doing any of the production, obviously. We don't do any vinyl production, we don't even source any of the vinyl. So, it's kind of like whatever shows up or whatever manufacturer they use. >> They go, pick it, work with the vendor, and they just enter you guys as the delivery address. >> Exactly. Exactly. So, they yeah, they they handle their own production and their own their own supply chain and then at the point at which it comes here for distribution is, you know, it's kind of is when we take over. >> Who would you say is the most common company? Is it Precision I see a lot of but then also A to Z >> vinyl manufacturing? At least for what I see here, it's definitely A to Z. >> Okay. >> We see a lot of stuff from A to Z but it might be because you know we have one big label client that just uses A to Z. >> Oh, yeah. >> So, um >> True. >> That's That's I think that's probably the the most the most common. >> Yeah. >> But this is more inventory, believe it or not. So, this is actually the last space that we moved into here. Um like I mentioned, the first space on the third floor, that was the [clears throat] initial space that we took when we moved into this building in July of 2020 and as we grew and needed more space, coincidentally a lot of space in the building made its became available. >> Yeah. >> So, at a really you know, opportune time this popped up and we were able to kind of scoop up this entire this entire area. >> Have you guys only existed since 2020? >> 20 18. >> So, it's kind of wild that in eight years you you grew to this. >> I think a lot of the the e-commerce growth happened during COVID. >> Yeah. >> You know, I think we definitely benefited from the fact that >> [clears throat] >> really the only thing for artists to do to stay alive during those times was to have great merch and great online distribution and that's really where we picked up a lot of clients was over 2020, 2021. Especially for e-commerce, we picked up a lot of a lot of new clients. Um so >> You guys will you guys do the tour merch thing too, right? So, you'll like ship merch store or do the vans van take it with them or do you like pre-deliver it to certain >> So, both. Sometimes we'll ship it directly to the venue or we'll send the total allotment to the artist before the tour starts, and then they'll travel with it throughout the duration of the tour. >> Mhm. >> Um all of the tour production, like the manufacturing of the merch happens at our facility in Long Beach. So, that's >> Okay. >> that's really our hub for any of the tour merchandise, whether it's getting shipped to an artist or it's [music] getting broken apart and shipped individually to each venue. It all pretty much starts in Long Beach at our production facility. We also do a lot of the inventory that we sell here gets manufactured in Long Beach. Um so, that's kind of the way to look at it is Long Beach is production, Methuen Mass is distribution. >> Nice. >> we couldn't be any further away from each other, [laughter] but >> If we had a bigger budget, we'd be like, "And now we're going to ship you to Long Beach." Clap, and then we just appear in Long Beach. >> [laughter] >> But, uh we don't got that kind of budget. We could just wait till NAMM, and then we could go to >> Yeah, right. >> [laughter] >> Yeah, we could do a part two in January of next year. >> Yeah. That shirt said, "Make my ears bleed." >> Yeah. It's my favorite music. Makes my ears bleed. >> It's wild seeing all the different ideas that bands have for merch. Like, I saw one shirt that said like, "I love cowboys." Um like I don't know. >> It says chalk. Yeah. >> [laughter] >> I don't Yeah. >> That That's just like There's everyone has such different idea like a lot of times it's just a logo, right? >> Yeah. >> Or it's the artwork, but I've seen so many just like >> Cape Town? >> unique ideas. Oh, Cape Town, cool. >> Yep. Yep. There And we help with a lot of the design and product development. There's a lot of artists that kind of already have that process figured out, or they have an artist that they've worked with for years that they're >> that they enjoy working with, and then we just get the designs from them to manufacture. But, there's quite a few artists where we handle all of the product development, and we handle all of the design aspects as well. So, that really takes like us understanding the artist brand, and like understanding their design uh kind of their design and brand ethos so that we can kind of plug in and and create new art for them that fits their vision. >> Is there any trend for what sells best? Obviously, that's that's kind of a loaded question with how many different options there are, but uh you know, certain merch items that sell the best, certain things about an artist brand that you can weave into designs? >> I mean, I think the the bread and butter is always a black t-shirt, right? I feel like that's just like the staple Yeah. It's a staple product that you just can't go wrong with and I I feel like from a from an actual like product standpoint, like that's that's a staple item. I feel like for a design, like on the design end, it changes, you know, and I I think we see a lot of artists whose design and brand develops throughout the years and it's like if we've been working with them for five or six years, they might have a couple different records that they release that have different elements of their brand and it evolves and we kind of have to be dynamic and flexible to be able to make sure that their merchandise evolves alongside Yeah. their their brand. So, we stay flexible in that regard where if an artist has a different vision and and we're able to communicate with them what that is, then we kind of go to town in making the designs reflective of that and and we kind of just act as their creative partner in making sure that what we're doing matches what their what their vision is. >> Nice. Brilliant. I didn't even know you guys got into that level of detail. >> Yeah. Yeah. You know, like like I said, a lot of it is a lot of artists have their own designers that they work with that they're you know, that they that they're comfortable with and it's kind of an area that we don't require doing art for all of our clients, but you know, there's there's a lot that you know, that do lean on on us for design. This is Matty Matheson. >> Drink drink drink? >> I don't even I don't even know what this is. >> Coffee? >> I think it's coffee. >> Yeah, Matty Matheson coffee. >> So, just as an example of like a unique product, right? Like >> Coffee. >> You know? >> Yeah. If I were to have a unique product, and I don't know how expensive a custom coffee label is to make, but I would probably do custom coffee. I'm really a huge coffee nerd. I get like I get fresh roasted and grinded coffee shipped to my house monthly. >> From where? >> Actually, um Happy Mug. >> Okay. >> Yeah. Love them. So, if I was going to do a custom merch item, I don't know like how expensive it would be, but that would be like my dream. >> To do coffee? >> To do coffee. >> I'm sure we could make that happen. >> Really? >> Probably, yeah. [laughter] Yeah. I'm sure we could. >> know if we have the quantity for it, but uh but we'll talk about that later. >> But you could at least maybe save some money on like the coffee that you're drinking, right? >> Yeah, yeah. I mean, I order 5,000 bags of coffee so that I can save money on the two bags I drink a month. >> So, I asked the people on Threads, "I'm interviewing the CEO of a merch fulfillment company for artists who manages over 220 plus label and artist stores and has shipped 520,000 plus orders and paid out $35 million plus in royalties, what questions would you have for them?" And we got some fun ones. The first one, "Do you get 8 hours of sleep a night?" >> No. I don't. [laughter] >> Um is it all t-shirts? Which we we just did a tour, so we know it's not all t-shirts, but what sells the most besides the obvious? Like you you mentioned the example of like the black t-shirt being the classic. What's the next best-selling merch item? >> I would say that the best-selling merch item is usually like a pre-order record or a new a new record release for an artist that we work with. If they're releasing a new vinyl record or a new CD or really any format, that's usually going to be the highest selling highest volume product that they put out through their store. >> Specifically vinyl? >> Yes. And and and usually they're either a reissue of of an old record or like a new record that they're putting out. That's usually the most That's usually the most volume that the store gets whenever those instances happen. >> Yeah, I remember when I when I got this Deftones shirt it was because they were just coming out with their album Private Music is what it was called. >> Mhm. >> And it was it was a bundle vinyl t-shirt thing. And that's usually the the bulk of my merch purchases also. >> That's usually like the the big push on an artist stores when they have a new record coming out like that and there'll be a merch line that accompanies the new record. That's really the highest volume the most traffic that we see on the stores is whenever we have those instances happen. >> Mhm. Um I'd like to know what he finds matters most in merch for customers in his experience. Is it like the design, the utility, certain colors, or is it just contingent on how many fans uh love that act? Any specific merch sales psychology stuff, those little invisible techniques to edge someone close to actually buying rather than just browsing? >> I think the customer experience from the actual marketplace itself in the actual checkout function is very important. I think that that probably does more in increasing a customer from potentially buying to actually going through and buying than than the actual specifics of the shirt, the garment, the design. That's not to say that that's not important. That's not to downplay it at all. >> Yeah. >> But I think that a lot of the especially a lot of the artists that we work with, their fans are so committed and they want to support the artist so much that >> [snorts] >> yeah, maybe they might love a designer a design might reflect a specific moment that they that they connect to, but at the end of the day they just want to support their art their artist that they love. So it's not the specifics of the design, I think it's more just getting the getting the merch in front of the audience and that's harder to do now. >> Yeah. >> You know, that's harder to do now and there's there's It used to be easier to post as you know to just post something and have the people that follow you see it. Now there's a lot more steps to jump through to get it in front of the maximum amount of of potential buyers, but ultimately at the end of the day I think dedicated audiences are is the thing that moves the needle for an artist merch sales. Yeah. >> A lot of the artists watching this probably know the feeling that when you know if you're doing good on social media, you're getting good views per per video. And then you go to talk about your tour or you go to talk talk about your new album or the new merch design you have and [snorts] you're normally getting 10,000 views every single Tik Tok every single Instagram reel and then that one thing that you actually needed to do well gets 500 views or 300 views. Um and that's because you know the the algorithms of all these platforms one they want to keep people on their platform so they don't want you sending people to your merch store. But they get used to what you normally do and if what you normally do is run around in abandoned buildings and film funny clips of you lip syncing which is what a lot of bands have to do nowadays. Um then then you're talking about buy my thing it it doesn't do well. >> Something that actually matters more potentially. >> Yeah. >> Yeah, that's that's tough because you would you would think you you amass an audience and now you have to jump through hoops to get the meaningful stuff in front of them. And that's not to say that the the the other types of content the it's not just fluff you know, it's like it's important to connect with an audience and to show who you are >> [snorts] >> personally like behind the scenes that goes a long way and as a fan I enjoy seeing that stuff, but you also want the artist to be able to the stuff that matters like their tour dates and their merchandise. You want to make sure that the people that are going to buy it are are at least going to see it. So that's that's where we help you know, we we help with a lot of the digital marketing efforts for a lot of clients and we help with with trying to make sure that the as many people as possible see see the important stuff. >> Do you guys So you mentioned you're getting into digital marketing for some of your artists. Does that mean like retargeting their fan base and running ads to their store? >> Yep. Doing the email marketing, the SMS marketing, taking all of the Shopify data and really figuring out the right processes and strategies to try to get new product in front of in front of the audience. So that's all stuff that we take that we take an active hand in for a lot of our artists, not all of them, but there's a there's there's a good chunk of them that turn to us for that sort of digital marketing strategy and um you know, and it's and it's something that's growing more and more important, I feel like. >> Totally. Uh how do I get them to fulfill the merch for my artists? So and that was a question I had written down before this is like what what are the thresholds you look for in an artist or label coming to you either in terms of their size or their >> [snorts] >> their existing like revenue potential cuz I'm I'm guessing the model for you guys is is um like commission based or or is or is it per pack order, but I would assume it's like a percentage. >> Yes. The the vast majority is is commission based. I would say that the you know, the barrier to entry, I mean there obviously needs to be an audience. You know, there needs to be a fan base and there's it's it's interesting, I guess. We don't really point to one definitive metric and say, "If you have X amount of listeners on Spotify, we'll we'll you know, we'll we'll sign a merch deal with you." It's it's a lot more flexible and I feel like a lot of it is do we enjoy working with the band? Do we have a previous relationship with them? And obviously there's more specific um identifiers that that we do look at like if they have a previous merch sales, that's definitely something that we'd like to see if there's previous uh ticket sales, that's that's all factors that we try to take into consideration when when we're putting together or evaluating if an artist is a good fit for what we for what we offer. Um but there's not one definitive formula that we go back to and we plug in the variables and and like, you know, it spits out a yes or a no. It's way more like iterative and we really take a lot of things into consideration. And to be honest, a big thing is like, is this an artist that we feel like we just we would we would enjoy working with. Or is it going to be a a a positive relationship? You know, that really that definitely has a factor. >> Yeah, but when when I work with artists, we do just have, you know, cuz I have my ad agency, we do have budgets where we we look for these thresholds cuz otherwise like our fee doesn't make sense in the context of what we're doing for them. Yeah. >> Yeah. >> But if someone comes to me and I like love their music and I love them as a person and their budget's a little bit under what we normally do, then that I just like I don't care. I want to work with them. So I could imagine if, you know, your best friend bands comes to you and like they they don't meet what you would typically consider like a normal volume to to justify uh doing fulfillment with you guys or other services, you might just do it because like, you know, like, okay, this this guy's a hard worker and their band's probably going to go somewhere, so maybe it will make business sense. But two, he's my buddy. >> Yeah, we make those exceptions all the time. And I I I feel like it's it's really one of those things where um you know, we kind of look at where it where do they fit Where do they fit best in our overall services that we offer? Because you bring up a good point, which is like the the artist needs to see value from what we do. And sometimes there's there is a barrier of entry where if you're not selling if you're just not going to sell X amount because you just don't have the audience, then it doesn't really make financial sense for you for you to even look to a company like us as a merch provider. You know, sometimes it's it is best to y- to wait until we can really deliver value to an artist by wrapping in as many of the services that we offer. You know, we we we want artists to come in and use all of the stuff that we all of the services that we offer. So there there is a point where there's kind of a break point where it where it makes sense. So that's but those are those are some of the the things that that we look at just just as like just as a starting point. >> So keeping in mind you know a couple thousand artists are going to see this and might immediately go to your website and hit you guys up. If someone is like just to give them some number like you guys are selling $5,000 of merch a year. Is that a threshold that's like what is there a kind of a ballpark you could give where someone should consider reaching out to you? >> Yeah, I mean I would say probably so social reach is probably a better metric to look at. I would say you know if you if you can look at all of the social media platforms and and you got you know quarter million followers like there's probably an artist an an audience that craves merchandise or wants to represent or there's there's a percentage of that that is probably is probably likely to order if if we put together a merch program together. So I think social reach is kind of an easy one like that's that's an easy one to look at and say you know obviously there's ways to kind of goose those numbers but I think looking at engagement that's that's a kind of an easy box to check. I would say in terms of previous sales you know if you're going out on tour or if you you've gone you've gone on tour before and you've played a few weeks worth of shows I'd say if you order you know if you order a thousand shirts all together across like three or four different designs maybe if you know 700 to a thousand total items yeah that's probably a good entry point where a company like us might make make sense for a for a for a fully managed tour you know tour service deal but there's different there's kind of different checkpoints too where there's a lot of artists that are just starting out that might need to get a smaller amount of merchandise printed just to test the waters and we we work with we we work with artists like that all the time just just to kind of get just to get some engagement and to and to try to get them into our ecosystem where we feel like we can help. >> Right. Right. And I think I have one more from the threads list. Um Over the past 20 years, what have been the biggest changes? Are there any trends in merch designs and preferences? How has pricing, sales been affected since the pandemic? How have tariffs affected things? How have oil prices affected things? Um you know, you guys have been around for I think it was 8 years. Um so, how how have things changed over then and all those factors like the the trends in what's selling and then the pandemic and tariffs and oil prices? >> I I think just starting at the the later points, I really don't know how an increase in oil prices will will affect us directly. It will certainly affect touring and it will become more expensive for artists to go on the road and that will probably that will probably shrink the amount of bands that are going on the road and that has downstream effects too. Like I'm sure that you'll you'll see people >> [clears throat] >> maybe tighten their personal spending and that would have an effect in how many tickets bands are selling. So, the amount of people that are going to shows definitely has the ticket counts has an impact on how much merch will need to be produced and that's where we probably see the effects of that. Um I I think that the >> [snorts] >> the biggest changes that I've seen like more specifically to our industry and kind of the advancements that we've seen since we started is it's much more common now for artists to have their own website that doubles as their merch store where before there before I I really got into it, I feel like retail was more prevalent where a lot of artists would focus on selling into specific retailers where they are where their fans might just be shopping and it might be good placement for them. Where I think now direct to consumer is top priority for artists, owning your own fan base, and having direct access to your fans is top priority, and I think the advent of this direct to consumer trend in our industry is really kind of a a wave that we've ridden. You know, when we when we start when I started the business in 2018, I feel like we were at the kind of at the beginning of seeing it be more common for an artist to have their own custom web store. Where we really made that like a core ethos of what we provide for artists is we made it so I feel like it was very easy for an artist to create their own merch ecosystem online that's completely tailored and branded for them. Um so that's really the that's really the biggest change that I saw at the beginning of of starting the business, and I feel like we've only seen that progress and progress over the past 10 years, almost 10 years. I feel like that trend has become a [snorts] lot more prevalent, and it's really what it's really what artists want now. They want to have their own their own web store, they want to have their own online ecosystem that is like completely branded and tailored for them. >> Yeah, and before a lot of people would sell on online platforms as well. Obviously, there's there's Amazon, but that's kind of hard to get into as an artist. Uh but then there's there's like Amoeba, for example. And there's a lot of other online stores like that that are also in in person stores, which you mentioned. Um it's almost like you guys are this this you can provide this hybrid thing where it is an artist own store, it is custom to them, it is direct to consumer, but they have the benefit of being part of a larger network in a way cuz they're not >> There's cross-sale opportunity. >> And they can go on tour, right? If If an artist is doing their own merch themselves, they either have to have like their, you know, their brother-in-law or something be like, "Hey, can you ship merch while we're while we're out and about?" Or they have to just not sell merch while they're on tour. It's like you can only when you're on tour, you can only get merch on tour, and then we come home and then we do the online thing. >> Well, that was kind of my point earlier when it for a minute the answer of what an artist can can do or advice for an artist, that's a perfect example I feel like of of doing things that doesn't necessarily drive your creative pursuit. And sometimes merch is a great example of that. Like um I wouldn't knock anybody's hustle if they want to have their own store and they want to ship out their their own orders. Like that's that's kind of how I got started doing it. >> Yeah. >> [snorts] >> But there comes a point where there's [clears throat] there's probably a tipping point in most artists' career where it just doesn't make sense to focus all your time on figuring out how to handle your own merchandise logistics. And it might make sense to delegate that sort of thing to a third party that's really like the the expert with that. >> It is a lot. Like I I ship out my own merch um and you know, learning about package types and learning about how to print labels and what services can you get that will allow you to print labels ahead of time and I didn't go to the you know, I'm not I mean I didn't ship packages that much and put stamps on things. So like I had to kind of look up like how do I drop off packages at the post office, which kind of felt stupid. But >> Yeah. >> I then I walked in. I'm waiting in line with my stack of packages and I get up there and like, "Oh, you can just put all this stuff here because it's prepaid." I'm like, "Okay." So it's just this learning curve of these little things >> Um you figure it out as you go. >> Figure it out as you go and then it's like, "Oh, I'm paying like $4.50 to ship this CD." But then I learn like, "Oh, I can ship it letter rate with like with this this platform allows me to print letter rate which is basically just stamps and now I get the the shipping cost down to $1.81. >> Those were all all the things that I figured out when we when I was first getting started. I mean it started where we were I was printing out like printer paper with with postage and I was taping them on and it's just like so wasteful and and crazy to think about doing that for like 200 packages. But you know, it was kind of just me doing it. So it's it's the much like you I didn't know any better option. But we figured it out through time and figured out like a more efficient way to do it, but um yeah, and it and it's and the reason we were doing is because I wanted to make a business that specialized in doing it, you know, and and thinking about having that time could have been spent in it from an artist standpoint, that time could have been spent focusing on my art and focusing on on creating or just being on on the road and not having to worry about whether or not the orders were shipping out for our artist-run webstore, our angry customers. You know, like that's another thing is like the customer service side. No, you know, artists typically you don't you don't want to have to do that. >> Yeah. >> You know, that takes away from the I don't want to say mystique, that's a strong word, but like, you know, you want to retain your brand and you want to have some divide you know, some artists it works for their brand and they're very hands-on, but you know, there's a lot of artists that I love like I don't want to know that they're shipping out their or I don't want to talk to them or complain to them about customer service. >> Yeah. >> You know. >> You you want [snorts] to have that that like just almost um >> suspended disbelief. >> exactly. And if something goes wrong with your order, it doesn't mean that you hate the band. It just might mean something went wrong with your order. But if if it is like the singer handling that customer support, um you might end up not having a bad experience with the band. Whereas if it's if it's this kind of anonymous fulfillment company or it's just like a different person than someone who's in the band, it kind of allows them to separate the the the the merch purchase that may have gone wrong from the band. And obviously most of the time things aren't going to go wrong, but it no matter what eventually something will happen. Like something gets lost in the mail or something gets damaged and and then you know, if the singer is just not good at handling customer relationships cuz why would you be good at [snorts] doing that? >> Right. >> There's some artists where it totally works and the and the DIY ethos and mentality is maybe a little bit more prevalent and it and it kind of fits, but you know, there are a lot of artists where it just it doesn't it just simply doesn't make sense. And that's a really valuable service that I feel like we provide to independent independent artists is like you know, you don't you don't have to be a massive band for our services to be a value. So, I think that's a that's kind of a tipping point where where we where we kind of come into frame is when is when it reaches that point where hey, maybe it doesn't make sense for us to spend, you know, 8 hours a week trying to run our own, you know, distribution. >> Yeah. All right, so I said some of these numbers earlier, but Armada has 220 plus stores, 500 plus artists, you've done over half a million orders, and you've paid out over 35 million dollars to artists. And you've worked with Solid State Records, Tooth & Nail Records, SharpTone Records, Alicia Keys, All That Remains, Alpha Wolf, Memphis May Fire, Loathe, Owl City, Escape the Fate. And when we do the tour, we just saw a whole bunch of other bands just walking through. Um which is wild to think about. Like, you have I would have to imagine your your some like in the top percentage of like merch fulfillment company for artists in the country. >> Certainly for independent, yeah. >> Yeah. Yeah, yeah, I'm I'm sure like Warner and so on and so on. >> Yeah, I'd say for independent, yeah, certainly. >> Um What what did you start with? Right? Like, we just did this tour, you have these multiple floors and thousands and thousands of boxes. And I think I saw you have like 150 and plus employees doing this. Um what was the beginning? And how did you get artists when you started? And then what was that journey from going from probably working with artists no one's heard of to working with a bunch of artists that a lot of people heard of. >> I I I think the the beginning >> [clears throat] >> definitely looked a lot different. As I kind of alluded to before, it was kind of just me running around trying to figure out how to how to make this happen, how to go from zero to to one, you know? And I I think that that that was um the idea that I had was, you know, I played in bands before. I worked at screen printing shops before and I saw a gap which I felt like was being being able to help specifically on the e-commerce and the direct-to-consumer side. So, that was really like the foundation of what was the lightbulb moment for me that said I I wanted to get into the merch business and specifically the artist merch e-commerce business. Um the first artist that we worked with was actually a band called named Currents, who we still currently work with. Yeah, so they're they're from Connecticut and they're and I, you know, they're similar scene as my band that I played in before. Um so, they're I believe they were the first client that we ever built a store for built a store for and we ever we launched with and what's really cool is we still work with them now like eight eight years later and they're absolutely crushing it like selling out the Palladium now. It's it's incredible and I'm really proud of that that the that the fact that we we've we've been on kind of a journey with them to together, you know, and they're kind of like our first client. So, it's definitely a, you know, a a special one. So, and the other initial client that we started with was my band was Vanna. So, we did the all of the the >> I forgot you were in You were you guys were like the other cool local band. We were talking about how Prospect Hill was like one of the cool local bands. >> Yeah. >> I like friends of mine used to be like, "Oh, we're going to the Vanna show." I didn't really >> I was in the the last iteration. Well, not Well, not the last because they're actually playing again now, but we did I did the final the last record that they did and then the last tour, you know, the the last tour that they did too, their farewell tour. So, we did a lot of we [clears throat] did a lot of the merch for Vanna. So, that was an easy sell. It was my own band. So, um you know, but luckily they trusted me in doing it. Like it was still like a a legitimate client and I, you know, and that was like that was a big one for me because I didn't want to screw it up and have my band be mad at me, but >> [laughter] >> that would have sucked, but you know, those were really like the two jumping off points, and that was probably uh that was probably like late late 2017, if not early 2018. Um and then it was kind of just a slow It was a slow build, you know, where picking up a couple artists of similar size, and that's kind of how we slowly built 2017, 2018, 2019, and then when COVID happened, that's really that was like gasoline on the fire for us, where a lot of artists had to pivot to focusing on e-commerce, focusing on their digital and direct-to-consumer strategy, and that's really where we stepped in, and I feel like that's really where we were able or I was really able to kind of realize my vision, which was like, I think artists I think this will be way more applicable to to a lot of artists, and I feel like that was really the turning point where we got in front of a lot we got a lot more a lot of opportunities, and we were able to really lean into the the blueprint that we had that we had written. >> Absolutely. It You know, a lot of people talk about how horrible 2020 and COVID was, right? And obviously there's a lot of reasons that was, like a lot of people died and all that stuff, but um I was like, man, I'm having like the best time of my life in in during that, because one, I'm I'm kind of a homebody, uh but >> Oh, me too. >> Yeah. Yeah. And and then and then two, uh in terms of being like an online content creator, it was kind of like a golden era. Like my channel that was a big part of like why I do this now full time is because of like all these artists were now inside trying to learn about digital marketing strategies. Um and there were always people doing that, but it was it was kind of forced upon every artist during that to start learning about social media and advertising. And so I look back on on COVID as being like >> the golden >> a great time, which feels horrible to say, but it sounds like it's the same case for you, too. >> And and we're very similar in our businesses, too, where it's it's digital first and you know, there was a lot of people with a lot of free time that were sitting at home on their computers, and I think that we probably both we both benefited from that. I think that that really was a a big turning point in our e-commerce business growing. Um but there were other factors that made it like incredibly stressful and difficult once we did start growing where we moved into this warehouse in July that we're at now, in July of 2020, at the height of COVID. So, you know, I don't I didn't even see the landlord's face until like, you know, the following year when I finally saw him without a mask. So, it's like, you know, it was And it was really stressful where I had to like read the CDC website where we had five or six employees that we obviously we want everyone to be safe and we we don't want anybody getting sick and we're trying to figure out how we can actually operate a business. >> Yeah. >> And I just never thought, you know, 2 years before that, I never thought that I'd have to like look at the CDC website every single Monday morning to figure out like how if we can even come into work. And then figuring out what if one person got COVID, like what the policy was. So, it was a lot of a lot of >> if if someone is is gets COVID, that's like packing orders, like for a while we didn't know how >> Yeah, are we contaminating everybody's order? Like that's another thing. >> a package and they open up the vinyl and and the sick person touched it, you know, what happens there? And I eventually, if I remember, there was like a study that came out about that, like, oh, it doesn't survive on surfaces more than X amount of hours, so you don't have to worry about, you know, Amazon's like, don't worry, don't worry, guys, keep ordering your >> That's And that's unfortunately that was probably after we had all started like cleaning off our groceries before bringing them inside. >> Yeah. Yeah. >> But, um yeah, I think that was that was a big turning point, too, was trying to figure out how to actually run a business with employees because we had hired I think five or six people when we moved in here, and that was the first time that we had a team, and we had to figure out how to communicate these sort of changes that we were just exposed to, and that was a big That was a a maturing point for the business, I feel like, was figuring out how to how to do those things. Not only do those things for the first time, but do them under a very strange and stressful circumstances that nobody's experienced before. >> Well, before you moved into here, where were you guys shipping out of? >> In Haverhill. So, we had a small office in Haverhill. >> Okay. But, I would imagine that must have been kind of a big leap to like having this idea to shelling out, you know, a couple thousand dollars a month for rent of a physical space and having physical employees. >> Scary. >> How did you you know, like I guess how did you get Was it just self-funded? Like you had money savings from from from another job? And you just dove into this like, "Hey, this might fail. It's my own money, but like let's try to make this happen." >> Yeah, it was definitely scary making the jump moving from our old office in Haverhill, which was only a couple thousand square feet into moving into a space that was like 10,000 square feet and a you know, a pretty at the time a very impactful rent payment every month that's due on the first. So, I think that was that was very [clears throat] nerve-racking. But, we had bootstrapped the business. Like it it was we didn't have any any outside investment when we started. It was just It was very organic and it was me and my two other business partners. We we kind of started the business much like someone would start a band where we'd say, "Hey, we want to make want to create something together." And it's like, you know, my two business partners were music industry people, too. And none of us really had experience with, you know, fundraising. So, I think we started it the way that we would know how to start a business is we have an idea and we want to kind of hit the ground running. So, um So, yeah, at the time of moving in here in July of 2020, it was definitely scary. But, by that point I think we had compounded some positive some small wins and we had some clients that we we had some clients that we could count on and and we kind of knew that the business was at a point where we we had to take the leap and and we and we just had to make it happen. >> Right. Right. Um you guys work with a lot of artists, but you also work with all the labels. And I saw that you're I don't know if you're still active, but you you're in a band that released an album in 2024. Um and was it My Fiction? >> My Fiction, yeah. >> And you guys signed to 11:26 Records and it made me wonder like what's your opinion on artists? Like should should artists be staying independent? Should artists work with labels? Is there certain certain situations where an artist might be better suited to work with a label versus not? Because obviously you you went with with a label for your band. Um what do you think most artists should think about that? >> I don't think there's a one-size-fits-all solution. I think that it's a great thing that there are more label service models popping up now and that's a viable option. I think it's I think the idea of an artist owning their art is is cool, but I also think what a label does is very valuable. I think that I think that coming in and funding and and you know really giving a launch point for an artist is very valuable and I think that >> [snorts] >> you know there's not one-size-fits-all. Yes, some deals are better than others, but I think that there's room for both models and I think it's just a matter of the artist feeling comfortable with who their partner is and them feeling like they have their their best intention in mind and that they're they're really going to be supportive throughout their career growth. You know, because you can look at what a label does very similar to what we do. You know, like we we look for talented artists and we >> [snorts] >> and we invest in their, you know, in in their brands and growing their brands. So, you know, I think it's it's just a matter of making sure that there's alignment and that there's um you know, that there's that there's true partnership. >> Yeah. What was your guys' reason for working with 11:26? >> Well, my business partner, that's his record label. >> Okay. >> Yeah, sense. and and one of and one of my great friends. So, it was like a no-brainer and I and I just asked him I said I asked him if he would put up my record and he said yeah. He obliged. So, that was really that was really the the reason. Um and it's like we we really weren't looking to make a full-time run at it. Like we kind of it's really just a uh uh uh a thing that we do for fun. It's a true artistic um you know, endeavor for us. So, so we are under no pretense that we wanted to go out and find a label and spend, you know, spend all the time. Yeah. Yeah, everybody's kind of that past that point in their lives. Now we're like we just wouldn't want it we really didn't have it in us to do that. We kind of just wanted to make a record that we really liked and put it out with a with a great friend. >> Right. >> [snorts] >> Yeah, uh you know, you you've been in bands for forever, right? Like 20-plus years. Um and at what point did you decide like I want to I want to work in the music industry, but I'm done trying to pursue being in a band is the path? So, a lot of people I talk to who are own record labels or who are managers or work at a record label or have gigantic merch fulfillment companies for artists, um they all start off as artists and then they realize at some point like that path either stops being viable or they get they fall in love with this other business thing that's in the music industry. So, at what point what was that turning point for you? >> [snorts] >> I would say around November of 2017 when we played the last Vanna show in my iteration of the band, I remember feeling like I accomplished all the things I wanted to accomplish with music. Which isn't to say that, you know, that I had a uh a long or like esteemed career. Like I I had very low I feel like I had pretty reasonable goals and expectations for what what I wanted to get out of it and I got to travel the world, and I got to make incredible friendships, and I got to create a bunch of records that I I really was satisfied with, and I felt like represented my, you know, my artistic, um, you know, vision. And I just remember looking at it and saying, I I think I did everything I wanted to do with it, and I think I want to do something new. And I think the other side of it was like the touring and traveling side of it. It didn't I loved doing it, and and it was like and it's a and it's a it's a great, you know, it was it was a great time, but I remember not really feeling challenged by by it, and I wanted to do something that was more challenging for me. And that's not to say that that pursuit is not a challenge because it's it's, um, it is. It's it's it's not easy. >> know some people who are touring in their late 40s, and they they, you know, they'll they'll attest how much of a challenge it is. >> Yeah, absolutely. >> They have like their families, and and they're, you know, they're like 47, and they're touring, and they're just like, "My back hurts." >> Yeah. Yeah, absolutely. And it's and it's like the hardest thing to break into and to become a successful band is is like the is the hardest thing to do. So, um, I I really wanted to pursue something else that I felt like would be more of a challenge to where I just hadn't done it before. I'd been playing in bands for a decade. I'd been traveling and touring very frequently, and I just looked at it as I I want a different type of challenge, and entrepreneurship and business felt like something that would would be, you know, I could see myself doing, and something I was always interested in, and it just came at the right time where I wanted to pursue something in the music industry. I had [snorts] worked at screen printing shops before. When I wasn't on tour, I'd go and I'd work at my friend's screen printing shop, or, you know, I I've kind of always had an interest in custom apparel and merchandise and screen printing. So, it just felt like kind of a kind of a golden opportunity to pursue something there. >> Yeah. Yeah, for for me, I don't think I could I could point to a specific day. It was just like at one point I realized I was having just as much fun working on other artists marketing and working with them as I was like my own bands. >> Yeah. >> And we still make music. Like we we released an album 5 days ago, right? And we're we're doing the CD vinyl thing. We're not trying to go on tour. We're not trying to go get signed by some label and um you know, just at some point I feel you you either you do or you don't. Like some people it's like the artist thing or bust, but I think a lot of artists don't realize that they would be very happy working in in the music industry, but in some other aspect of it. Um like what you do has a lot of like very cool like you talk to a ton of different artists. You get to work with all these different artists and their teams and and see what merch they're doing and then like I get to work in the marketing on all these different artists and it's very cool. And a lot of people they think the only way that they'll ever be happy is if they're like the next Taylor Swift. Right? And most artists who are making a run of it as artists, they're not Taylor Swift. They have a couple hundred thousand monthly listeners. They tour. They pay their bills. They're happy. >> And they're working class artists. >> And they're like yeah, they're working class kind of middle class artists. Um and then all the teams around those people like the the manager or the guy who handles like um uh like vinyl manufacturing at the record label or whatever, you know. There's all these jobs a lot of people don't think of when they think about making it in music. >> Yeah, absolutely. And I and I would say that just being being able to stay in the community and being able to make a living doing that is I would have I consider that making it. >> Yeah. >> You know, I think I think just being able to be involved was a very important thing for me. Like that was my highest aspiration was like I just want to be involved in music and if I can figure out a way to make a living doing it, I'll probably be happy. So >> You've helped artists make more money than like most artists will ever make. So, like that's that's pretty bad like you've paid artists $35 million. That's pretty >> And I'm really really proud of that. I would say that that's really a high water mark for us is like I I think that having that what we do I feel like really makes a difference for bands and I think that it's a really that's a really rewarding feeling and I think that that's like kind of in the DNA of Armada is is we really value the contribution that we have for independent artists because we feel like a good a good merch provider makes a big difference. >> Totally. >> So, we just so Down Right Merch which was the business that I that I started >> [snorts] >> we merged with another company in Long Beach called Overcast Merch and we formed a new a new company called Armada. So, I had known those the guys in Long Beach for for quite some time and we actually we did a lot of business together. They printed a lot for us. So, and and they were they were kind of in the same community, right? Kind of from like punk and hardcore and like a similar similar background. So, it it kind of our paths crossed quite frequently and had the idea of joining forces to [snorts] bring the production side which they do really well together with the e-commerce and fulfillment side which we feel like we did really well and that's how both companies came together to form Armada. >> Nice. How they end up picking you as the CEO of the same company? >> Uh I mean, we just we looked at it and and looked at what our roles and responsibilities were and we wanted to figure out a way to define our lanes clearly and say what are we feel like we want to contribute to the business and what do we want to do for 8 hours a day, you know, like you know, we we all of us can't do everything. So, we need to have clear lines and we need and we need to we need to figure out what our what our contributions are. >> Actually, you're essentially like the face of of Armada. I mean, like if you go on your website, you you better like if you look up like Armada, who like who's the team on it, you're the first guy that comes up on LinkedIn. Um who what is what is the guy who was who was the founder of what you say, Overcast? >> Overcast. >> Overcast, what's his role? >> So, there three So, originally two two founders, um gentleman named Bailey and uh Andrew Doyle, and they started the business together. I want to say 13 years ago. So, they've been in business for quite some time. And they brought in another partner uh I want to say three or four years ago, but the dynamic with their business is they it was really a a shared um more of a shared role scope of responsibilities. Um and [snorts] yeah, it was much much like Downright Merch, it was kind of like an owner-operator type role for all of us. You know, at the beginning you just you figure out what needs to happen and then you you get it done. And then as things progress and maybe the business and the processes mature a little bit, you're able to to kind of look from a like a higher viewpoint and say, "Well, okay, this is where I can allocate more of my time and get a little more refined in what my contribution is." >> Uh how do you how do you cuz you guys have 150 or 170 employees? Like how how do you deal with that? Like that's that's a lot >> Yeah. >> to manage. And I'm sure there's like a structure of, you know, there's people who report to you and then they have their own departments and then people under them to just to keep it straight, but how do you just like organize like the direction of 150-plus people to actually get stuff done? >> I think clear lines of communication is very important, making sure that we're all referencing the same information from the same source. That's critical. Great management, making sure that there's that there's a you know, a clear line of communication and oversight across multiple departments. That's that's another area where it makes it it makes it manageable with with that that many people. Um and I think having having a cohesive vision that's shared and deployed across the entire company is very important as well. I think having one brand and one voice and [snorts] really one operating ethos, I think is really important for Armada to not feel fragmented because we have so many people kind of scattered around different different places. We have office here, we have an office on the other side of the country, in the UK, in Mexico. So it's it's really important that we keep one cohesive company vision and I and I think we do a good job at that. I think we do a really good job at keeping the lines of communication clear and and operating as as one company. >> Yeah. Well, is there anything you want to leave the people with? All the artists watching, any last minute words of wisdom aside from click the link in the description to go to Armada's website. >> Um I would say that if there you know, if you're a band, if you're an independent artist, not not even if you're an independent artist, you know, maybe if you're thinking about how merch can impact your brand or it can be something that can be optimized, I think that's where Armada stands to help. I think that we I think that we put we put artists first and I think we put the idea of creating value for artists first and if there's a an artist [snorts] that kind of falls into that category, we'd we'd [music] love to connect with them and and help. >> Sweet. Thanks for coming on. >> Thanks for having me.