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From What’s Your Problem?: Becoming a Dog Ramp Mogul
00:12:44
A preview of the Jacob Goldstein podcast
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- [00:00]
A
Hello, Slate Money listeners. Today I'm sharing a different podcast, not mine, Jacob Goldstein. You know Jacob, he's awesome. He used to be with Planet Money. He's not anymore. He has been on Slate Money a few times. He's written a great book, all about money. But the reason why he's here in this show is he has a brand new podcast of his own that he's put together with our friends over at Pushkin. It's called what's yous Problem? And what he's doing is he's looking at big problems, right? Like buying houses on the Internet or building self driving cars, or taking a drone delivery business in Rwanda and making it work in North Carolina. So big problems, big solutions, lots of great reporting. In this preview you're about to hear Jacob chats with Ramon Van Meer. He has a company called AlphaPOR, which makes dog ramps for dachshunds. You know, so they can walk up the ramp to get to the couch. He bought Alpha Poor. He didn't start it. He bought it for about $300,000. He managed to sell over $30 million worth of these ramps. But then the pandemic happened and the supply chain basically disappeared. So what does he do then? Here is a preview of Jacob and Ramon's conversation. I hope you enjoy it and you can hear the full episode and more from what's your problem? Wherever you get your podcasts.
- [01:27]
B
So maybe just to start, can you just like, off the top of your head, list a bunch of the businesses that you've started in your life?
- [01:35]
C
Oh, okay. Yes. That's a lot.
- [01:39]
B
I'm Jacob Goldstein, and this is what's yous Problem? The show where we talk to entrepreneurs and engineers about the future they're going to build once they solve a few problems. My guest today is Ramon Van Meer. He's been starting companies since he got kicked out of high school in the Netherlands more than 20 years ago. A lot of companies.
- [01:58]
C
A construction company, online Piada website, soap Opera blog, a YouTube channel, festivals in Vegas. What else? What else? Oh, I did an online travel company.
- [02:14]
B
And at the moment, Ramon runs an E commerce company that has sold tens of millions of dollars of ramps for dachshunds. Like little ramps that let wiener dogs get up and down from the couch. As it turns out, Ramon's online wiener dog ramp business is going through a lot of the same problems that lots and lots of other businesses are going through right now. We'll get to those problems in a couple minutes, but it's worth talking a little bit about how Ramon got here. He didn't start the wiener dog ramp business from scratch. A few years back he bought an existing online wiener dog ramp company for around $300,000.
- [02:51]
C
The company was actually called Sausage Dog Central at the beginning.
- [02:54]
B
So they were really leaning into the wiener dog market.
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C
Exactly, the wiener dog market. But I love the idea because it really solves an actual problem for a targeted audience. So I bought this business instead of starting it and the previous owners built an amazing product but they were not Internet marketers. So there was a lot of low hanging fruit that I saw that I can, hey, I can just improve conversions or I can do XYZ to increase revenue.
- [03:31]
B
So it's kind of like a house that's like a nice house in a good neighborhood, but the paint's peeling off and the roof needs a patch and so you can get a deal on it and fix it up and make it worth a lot more.
- [03:42]
C
And that's funny you say because I use that same example all the time. Their website was very old, not pretty. The copy was not great. It was very difficult to navigate. It was very slow. So I thought, okay, we can just redesign it for fairly cheap. Hire copywriter to make the copy and make better pictures. That will for sure increase the conversion rate. Like more people will buy once they are on the website.
- [04:09]
B
And did you also change the sort of commerce kind of backbone of it, the way that Apple actual commerce back end of the site were?
- [04:16]
C
Yeah. So we switched to Shopify to you.
- [04:19]
B
Like I'm sure it's like Google or whatever, but most people don't know what Shopify is and yet it's this giant force on the Internet. Right. Just talk for a minute about Shopify.
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C
Yeah, it's basically anyone can set up your own store and start selling products within a matter of hours. I think that is their mission.
- [04:39]
B
Right.
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C
That my mom, without knowing anything to code could basically within a couple hours set up her own store and start selling whatever she wants to sell.
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B
And it's giant. Right. There was some metric I heard recently that there were more visits to Shopify sites than to Amazon over the last quarter or something like it's like certainly billions of dollars in revenue flowing through the businesses.
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C
Shopify is actually on a mission to really compete with Amazon and they're. That's why Shopify.
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B
Right. Sort of Shopify, they're succeeding.
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C
It's really especially the last year and maybe this is a good pivot into the e commerce world. In the last year how much have changed actually in the last 12 months.
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B
Yeah. Tell me.
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C
Yeah.
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B
What has changed?
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C
What has changed, unfortunately, has changed for the worst, for a lot of E commerce, including ourselves. So on one hand, the supply chain has dramatically changed and we're still in it, but because with COVID there was a huge backlog of containers coming from overseas to a point where there were over 100 container ships stuck at sea waiting in front of Los Angeles port.
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B
So that's the macro. What does it mean to you? What does it mean to your dog ramp business?
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C
So that means for me and a lot of companies is that we were not able to get inventory, or if we ever got inventory, huge delays. Instead of, you know, waiting a month, it took three to four months. But most importantly, the prices of getting our product to our warehouse went up. Like for us, 10x, we used to pay 2,500 to get one container from Asia to the United States. We got quoted 29,000.
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B
That's just for shipping. To be clear, a container full of dog ranks.
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C
Correct. And there's no. I have to pay it. Like, I have to choose between not being able to sell something or, you know, just pay these fees. And that's just one.
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B
So just to be clear, this show is called what's your problem? And we're definitely into the what's your problem?
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C
Portion of the interview.
- [06:56]
B
So what are you doing about the supply chain problem? Can you do anything about that?
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C
Yeah, so we. We moved our manufacturing to Mexico.
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B
Oh, interesting. Interesting. Yeah, from Asia. It was in China before, or where was it before?
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C
We use China and Vietnam, both countries.
- [07:14]
B
So, okay, the supply chain problem, that's one big problem that you and, like every other importer and exporter on the planet are dealing with. And like a lot of other companies, you're moving production to Mexico. What else? What else do you got? What other problems are you working on?
- [07:29]
C
On the marketing side, we had Apple make an update to their, you know, operating system called the iOS 14 update, where it makes it more difficult for E comm or for online businesses to target their potential audience.
- [07:50]
B
And just to be clear, like, that was basically to make privacy settings stronger for users. Right. For me, as like an iPhone user, reader of the news, what that, like, Apple does some update, and it basically makes it easier for me to opt out of being tracked so intensely by, like, Facebook. But we also know that that iOS update from Apple, it wound up costing Facebook billions of dollars in lost ad revenue because they could no longer track users like me so intensively. And then for you, it means it's suddenly harder for you to target someone who is whatever. Who is a wiener dog owner and is worried about their dog's spine. You know, to target exactly the customer you want to target with your ads. What do you do about that problem?
- [08:35]
C
Yeah, and that's a tough problem. And everybody, a lot of E Commerce are trying to figure that out. We're looking at, you know, okay, what, where else can we put our marketing dollars? Can we do YouTube? Can we do TikTok? Can we, you know, we're all trying different things. We, we are allocating some of our ad budget to influencers. That's been working well for us.
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B
Okay, so like wiener dog influencers. Is there like the wiener dog queen of Instagram or something who you're sponsoring now?
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C
Y funny. You have no idea Dog have Instagram. How many Instagrams about dogs are meaning like dog instruments? Like an actual.
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B
So the influencers you're sponsoring are dogs. Are you sponsoring? How many dogs are you sponsoring?
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C
Well, we have a lot, I think we're working with. Well, we're working with 400 influencers and the majority of them are actually not a person, but it's actually a dog. And some of them have over million million followers. And it's just an account of a specific dog. You know, Rudy the dogfluencer.
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B
Dogfuencer. Is there one dogfluencer that's like killing it for you. That's gonna save your business?
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C
No, it's because it's always. It does well in the beginning but after a couple times, right. Like their audience have seen our ads and then that goes down.
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B
Right.
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C
So that makes it hard. You always have to find new influencers and new. You know, actually the big takeaway is pivoting actually away from ramps. The big problem with the ramps, it's like okay, ramp, it's a one time product. Sometimes a person buys another one for the bed. But there is a ceiling. There is technically going to be a day where I sold all the ramps. Every wiener dog will have a ramp in the house.
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B
Finished. Right. There's no more wiener dogs to sell ramps to. You got to close up shop.
- [10:36]
C
Yeah, we are still going to sell ramps. But it actually we six months ago we really started to pivot to dog food. So dog food, the lifetime value is a metric that is used often in E commerce is like the lifetime value of a dog food customer is so much higher, meaning it's thousands of dollars.
- [11:00]
B
Right. It's a dog owner. And presumably most people who have dogs, when their dog dies, they get another dog.
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C
Right.
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B
So If I buy dog food from you and I live for another 40 years, I'm worth tens of thousands of dollars in dog food sales to you.
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C
Exactly. Versus. So the amount of work to acquire you as a customer is more or less the same. If I'm selling a ramp or I'm selling food, it's a little bit more difficult in food because it's more like. It's a little bit more tricky.
- [11:27]
B
Yeah.
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C
But in essence, it's like the amount of work I need a product, I need a website, I need a warehouse, I need, you know, customer service. I need ads. All these things are the same if I sell ramp or food. But if I do all this work and try and sell and focus more on food, the return on my time and return on investment is so much higher. Because you know you're going to keep coming back every two weeks or every month.
- [11:59]
B
Ramon's company is called AlphaPaw, and this is just part of our conversation. We didn't have time here to play you the part about how earlier in his career, he started a soap opera blog from scratch and sold it for $9 million. Also, by the way, he has still never watched a soap opera in his life. To hear the soap opera story from Ramon and lots of other great stories from other entrepreneurs and engineers, please check out my new podcast. It's called what's yous Problem? I'm Jacob Goldstein, and I really hope you will check out what's yous Problem.
- [12:31]
A
Like Jacob said, you can hear more stories from entrepreneurs and engineers on his new podcast, what's yous Problem? From Pushkin Indust. Listen to what's your problem? Basically, where you're listening to this right now.