Shady Rays: A Great Returns Strategy Keeps Customers Coming Back
Becoming someone’s favorite sunglasses brand is difficult. But Shady Rays remains a gold standard for many of its customers. Through competitive marketing efforts, a philanthropic mission, and an ultimate focus on providing the best service and product to their customers, Chris and Dan have found success in ecommerce — shipping upward of 10,000 orders in a day. They’ve even been listed as one of the fastest growing eyewear brands in the U.S. according to the 2020 INC. 5,000 list. So how did they do it?
In addition to offering free shipping, returns, and exchanges, Shady Rays’ true claim to fame is being “The Sunglasses Company that replaces all lost & broken sunglasses.” Learn about Chris and Dan’s ecommerce journey over the last decade and how they used this successful marketing strategy to establish their brand as a preeminent business model for customer loyalty.
J.B. Hager (Host):
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Welcome back to another episode of Get Ship Done, where we talk to entrepreneurs about their journey into the world of e-commerce. I’m your host, J.B. Hager, and I’m really excited to talk to a couple of these gentlemen today from Shady Rays, which in itself is a cool name because if anyone’s ever been through the process of naming a company and finding something that’s available and cool and sticky, I think that’s a cool name, Shady Rays. That’s a good rapper name, too, if the company doesn’t work out. But joining me from Shady Rays, it’s cool to have both of these guys on, CEO and founder, Chris Ratterman and his brother, which we’ll talk about siblings working together later on in the show, Dan, who is the COO of the eyewear company. You guys are based in Simpsonville. Now that’s just outside of Louisville, correct?
Chris Ratterman (Guest):
It is. It’s based out of Louisville. We have our official headquarters here. We’ve fulfilled all of our orders everywhere around the world from this location. But our team, since the beginning, has been very remote and has worked in a remote fashion. And so we do a lot of social media, photography, and design out on the west coast. We have teams in the Midwest. We have a team out in Colorado. We operate in that way so that we can be dynamic and that we can really have a diverse group of talent, but our headquarters where we do fulfill every order is here in Simpsonville, Kentucky.
J.B. Hager:
And it’s funny. When you think of a sunglass company, I just kind of gravitate towards the west coast, right? You think everything comes out of a coastal area. What’s the story behind you guys in being out of Kentucky?
Chris Ratterman:
Shady Rays is about outdoor adventure, all things outdoor adventure. So we aren’t necessarily the coast. We are. We’re west coast and east coast, but we’re also lake life. We’re also hiking and kayaking and rock climbing. One of our biggest cities in terms of our customer base in Denver. And so at Austin where you’re located is a very big market for us. So we want to be all things outdoor adventure, beach, and lake, and hiking, all of the above. And that’s what we build products for.
J.B. Hager:
And that, of course, for those of you listening, is Chris. We’ll get into more with Dan as well. Okay. Going into what I would assume is a very crowded space as a new sunglass company, what was the impetus for this? And how did you think and then later prove that there was a space for you in eyewear?
Chris Ratterman:
Well, I take that from a few different angles. So number one, sunglasses were always something that I was just personally very passionate about. It’s just a cool product. It’s something that you use when you’re doing very adventurous, exciting things outdoors. And so it’s something that I was just very, very interested in in general. When I started to think about building a brand and you look at the market, you see what a lot of people know, I think, is that there’s a small amount of companies that really own that higher price point, that $100, plus $200 plus. People are very familiar with those brands. And we don’t have anything negative to say about those brands in any way, but they were for myself just more expensive than I was willing to pay to then go out and get in the waves and get dirty and dive in the sand and beach volleyball with a $200 piece of plastic on my face. That was that aha moment of like, “This just doesn’t make sense to me.” It just doesn’t click.
Chris Ratterman:
So I started to think about how to solve the problem of high quality for a better price and identified what I believe in was the genesis of the brand and is still today something that resonates with people is that there’s a huge problem with losing and breaking sunglasses.
J.B. Hager:
Of course.
Chris Ratterman:
Everybody’s like, “Oh yeah, of course. I lose and break them all the time.” Everybody gets it, right? So how could we solve that problem? And that’s really what I set out to do in the early days, because of course there’s the high price brands and on the low end are gas station sunglasses, cheap sunglasses, you can buy at a beat shop and they just don’t last, right?
J.B. Hager:
It was one end or the other, right?
Chris Ratterman:
Yeah. Yeah.
J.B. Hager:
And it really was a space for your price point.
Chris Ratterman:
Right. Right. Right. So we had space, but it really was very much hinged on, can we solve the problem of losing or breaking nice sunglasses? Not poor-quality sunglasses. Can we actually give people good quality, polarized lenses and solve losing or breaking them? And that was the initial thesis. Still is.
J.B. Hager:
When I found out about Shady Rays, it absolutely caught my attention because first I’m like, “Wait a minute.” This sounds too good to be true that you will replace… Okay, understand broken. Okay, a lot of people do that. But lost? Lost or broken. And correct me if I’m wrong, you get two replacement pairs per purchase, right?
Chris Ratterman:
So day one, you lose your pair of sunglasses. Day one, you have no photos, nothing, but you can verify your order information, your name, we can run you through our system quickly and efficiently, we’ll get a new pair out to you. So that’s the whole goal. The real experience we want to give people is, go out, do something crazy on the weekends. Don’t worry about your sunglasses. If you lose them, on Monday, file your return. And next weekend, you’re back at it with a perfect pair. That’s our perfect world.
J.B. Hager:
That sounds too good to be true, right?
Chris Ratterman:
Right.
J.B. Hager:
What’s the catch? Do you have people ask that? What’s the catch? Do you charge me $75 for shipping on the replacement or something like that?
Chris Ratterman:
There is a processing fee for each of $8.89.
J.B. Hager:
Wow.
Chris Ratterman:
That’s not raised. We lose money on our replacement program, but that’s our brand promise. That’s how we stand behind our product. Our goal is to allow that to help spread the word, allow people to have an amazing experience, and come buy other things from us. So it’s just an investment in the value.
J.B. Hager:
I can see how the word of mouth works because when your company came to my attention and I read through all the fine print, which I didn’t really need to, it was pretty straightforward on the replacement promise. I was like… And I’ll add to this. I’m a lake rat. My daughter is a professional wake surfer so we’re on a boat five times a week. And I have donated many pairs of sunglasses to Lake Austin. And so immediately I was like, “I need to be a customer of this.” So I ordered those on Monday. I’ve probably told six people about your company. And then it started to click with me. I’m like, “That’s how this works.” Just with the replacement promise. And like I said, I’m on the lake. All my lake friends, we’re losing sunglasses all the time. Or you’re breaking them or someone steps on them on the boat. I quickly became a customer, and I’m quickly spreading the word. That’s really how your model works.
Chris Ratterman:
Yeah. I mean, just very honestly, I mean, we’re trying to create that wow factor. We don’t want people to have to register, and we’re not putting red tape in place so we can make people fall off and not actually want to do the warranty, and then it’s just a lot of fine print. We want to be the flip of that. We want to actually make it as easy as possible, so people love the brand. I mean, that’s the goal, right?
J.B. Hager:
So Dan, when did you come on board? And then we’re going to go back to your early, early days with your dad doing a lot of the fulfillment, okay? I want to hear about that. But were you on board from the get-go, Dan? Or did that come later?
Dan Ratterman (Guest) :
Okay. Yeah. So when it was first founded back in 2012, I was in college at the time. I was involved not directly, not working full time by any means, but I was involved from the standpoint of I was selling Shady Rays out of a cardboard box on Saturdays at University of Dayton with a credit card reader. Probably the most fun marketing campaign I’ve ever been a part of.
J.B. Hager:
Oh, I bet.
Dan Ratterman:
That grew into working in a mall kiosk back in 2015 to try that out. That was definitely a one-and-done scenario.
J.B. Hager:
Really? That did not work?
Dan Ratterman:
So yeah, when I graduated college, I worked for a big corporate company for a few years. And then it was 2018 when Chris and I were talking about Shady Rays and continuing to get this extra growth. And October of 2018 was when I officially came on full-time.
J.B. Hager:
So back in 2012, you get this thing going and then fast forward to last year, by peak summer season in 2020, a staff of 75 people in 2020. That’s a lot of growth.
Chris Ratterman:
It’s a lot of growth.
J.B. Hager:
Tell me about those early, early days. Probably a lot of people listening to this podcast are starting a home business, they’ve got a cool product, and they’re shipping it out direct-to-consumer, which, again, we’ll get more into. Paint a picture for me of what that was like the first few years.
Chris Ratterman:
So when you have the initial idea for the company, the entire concept was to develop the minimum viable product. Can we create a brand and then go out into the market and see what will work and start to test some things? So the initial steps really were, let’s develop a logo, figure out how to set up an online store, find manufacturers, start to get samples, file the trademark. Get an accountant. Get a lawyer, right? Get the basics in place. But it was all me at that point, including early in the mornings when I would pack those orders myself and bring to the post office. In those days, it might be zero orders or it might be three, it might be five. But I think what’s helpful for everybody to understand is the goal was to develop the brand identity, the brand look, get some product that I could sell, an array of products at really low quantities, and then go out and test different sales channels and different customer acquisition channels and try a lot of different things. Try different price points, try different messaging, and figure out what the model would be that would work.
Chris Ratterman:
So people look at the website sometimes to me and say, “This is amazing. How did you think of this?” And I say, “I did not think of this. It looked very different in the beginning.” They were $18. The quality was worse. A lot of the policies weren’t the same. We didn’t have the same imagery. We didn’t have the same product portfolio. But over time, you put out in a market and you iterate. You change. You have success. You have failure. And you make small changes along the way and just continue to iterate and just build, build, build a stair step. And that’s what it was. I was doing it in as scrappy a manner as possible. Never looked for venture funding, never raised money.
J.B. Hager:
Really?
Chris Ratterman:
This is entirely
J.B. Hager:
This was all self-funded?
Chris Ratterman:
Entirely bootstrapped.
J.B. Hager:
Wow.
Chris Ratterman:
I invested $17,000 my own money. It almost ran out at one point, but I had to be very lean. That money went into, of course, the initial things such as a graphic designer to create the logo. But the majority of it went into buying a first order of product for inventory and then testing different customer acquisition channels because the idea was, can we become profitable on the first sale and can we find the ways to grow the brand and get cash flow so that we can continue rolling it all back in and building and getting that momentum going?
J.B. Hager:
Already, Dan, you mentioned that the kiosk thing, you knew immediately this is not good.
J.B. Hager:
What other channels did you explore for customer acquisition, as you said, but you were like, “Nope. Nope.”? Tell me about more of the things that you found that did not work.
Chris Ratterman:
So mall kiosk is certainly one of them. Hiring ambassadors that would go and sell for profit, sort of like an affiliate program. This was the early day of Instagram influencers, which Instagram influencers and social media influencers absolutely have a place but it can be really difficult to get them to drive sales at scale, especially early those early days. So something that we tried was, actually, this seems crazy now, to hire people as contractors that would actually be responsible for certain zip codes and different locations, actual physical locations, and go out, go to skate parks, go to the beach, go to their school and sell product with a credit card reader like Dan did at Dayton. But being able to do that repeatable at scale was extremely difficult. At minimum, it wasn’t the most effective.
J.B. Hager:
I’m picturing a guy walking up to a bunch of kids outside of high school and opening a raincoat with sunglasses hanging all over it, right?
Chris Ratterman:
So our very first brand ambassador was out in Simi Valley, California. Sent him a duffle bag full of product and a credit card reader. Taught him how to do it. He was 18 years old. He literally went to a skate park and was trying to gather people together and tell them about Shady Rays and “Here’s the product.” Well, what we learned later is that that is not necessarily the best market for us. They’re seeing this product right out of the blue. It wasn’t high-quality product. And so he sold nothing, right? He was there for three hours. Heart is in the right place, ready to go, ready to change the world, sold nothing.
J.B. Hager:
And that was in an $18 price point? People still didn’t want it?
Chris Ratterman:
Correct. Correct.
J.B. Hager:
Interesting.
Chris Ratterman:
Well, in fact, $18 price point can hurt you actually, because all of a sudden they hear $18 and they’re like, “Well, this isn’t premium. This isn’t high quality.”
J.B. Hager:
Yeah. And you said the quality got better, but how much of a difference was it? I mean…
Chris Ratterman:
Significant.
J.B. Hager:
Right. Okay.
Chris Ratterman:
We invest significantly in quality. I mean, it’s down to a pretty granular level. The exterior coatings of the lenses, the interior coatings of the lenses, the hinges. There’s a lot that we do now. That’s had to build over time and we’d have to gain that expertise over time too.
J.B. Hager:
In the early days, was the goal to start to get this in stores? “I want this in every sporting good store. I want it everywhere.” because that’s more of a traditional thing. Was that the goal?
Chris Ratterman:
It was not the primary goal. The primary goal was to ride the wave of e-commerce and the growth in social media as a brand-building channel. But it was another thing that didn’t work. I hired somebody else in California that spent time going into retail stores all and down the coast, surf shops others to sell it in.
J.B. Hager:
The brand rep. The brand rep model has been in place for a long time, right?
Chris Ratterman:
Correct. Correct. We did get into a few stores and they moved okay in a few stores, but it just wasn’t the most efficient way. So it’s not that it failed, but it’s just that we found other levers that were able to fuel the growth quicker. And so we put all of our resources into those.
J.B. Hager:
Interesting. And I was wondering about the influencer thing. It’s hilarious to hear you say, “The early days of influencers on Instagram.” That’s how fast the world is moving because this seems like a product where influencers would move the needle, and that model would work very well. Do you do some of that now or no?
Chris Ratterman:
We have a person who full-time recruits people on Instagram, direct messages people on Instagram for product and sometimes payments to get content and spread the word and help build the brand. But as social media has evolved, there’s less organic or impressions that are gained by social media posts.
Social media posts are not always… They’re great for engagement and they’re great for education on brand, but they’re not great for driving direct sale. So it’s not authentic to have people just slap coupon codes across Instagram posts. And so we don’t want the brand to be in that fashion either. So we don’t ask people to do that. We ask people to take the product, try it out, go out there, talk about what they liked about it, show themselves living in it. And we’re not directly tracking ROI necessarily on influencers. So it’s a piece of the mix.
Chris Ratterman:
But in the very beginning when you’re scrappy and you need to make money on everything you do to be able to go to the next step and fuel sales the very next month, that’s why I say it didn’t work because we were trying to look at it as a direct revenue driving model. Which it can do. There’s a lot of leg work and it’s very much a guerrilla marketing tactic where it’s essentially social media cold calling so it’s a numbers game. And you don’t know which of these influencers are going to move the needle, which are not, because some have really highly engaged loyal followers and some don’t. But it’s certainly a piece of what we do.
J.B. Hager:
Okay. And now tell me more. I’d still want to hear more about the early days. I know your dad was doing a lot of the fulfillment as well. It was a family operation. What was that like
Dan Ratterman:
Once Chris got to the point, I guess, where he couldn’t fulfill the orders between 4:00 AM and 6:00 AM with his full-time job, it progressed to go to our parents’ house. So the living room quickly converted into a fulfillment center, and inventory was getting delivered there, which I can remember the first shipment of inventory that came in. The UPS guy knocked on the door, and we opened it up, and there was a box of 300 pairs of sunglasses.
I remember me and my mom, my dad looking at Chris, like, “What are you ever going to do with 300 pairs of sunglasses? You’re never going to get through these.” But yeah, there’s a little card table set up. The sunglasses were on a little shelf. There’s a computer and a printer. Our dad would sit there each day, pack up the 20 or 30 or 50 orders, put a shipping label on it, and then put it in a trash bag and drive it to the post office. That was our situation for about a year or maybe even a little bit more.
Chris Ratterman:
So what is interesting is that Dan was key in designing that fulfillment center, which was a label printer on a card table and where those were placed within the living room. And then later designed our current fulfillment center, which obviously is just the scale.
Dan Ratterman:
Definitely, a little bit different scale if you think of those two things.
J.B. Hager:
Yeah. I saw some video of your current fulfillment center and it’s like a Walmart-size building, right? It’s a big place. And so how many pairs of sunglasses might go out in a single day today?
Dan Ratterman:
Yeah. So this year in our high time, we’ve had days where we could do upwards of 10,000 orders in a day.
J.B. Hager:
Wow.
Dan Ratterman:
So that’s maybe 16,000 pairs of sunglasses. But in reality, it’s really the similar concepts as the card table back to the living room. It’s just how do we make this process as simple as possible, make it as efficient as possible? Whether that’s our dad’s sitting there packing up 20 orders or it’s 50 people packing up 10,000 orders, still a really similar concept, just on a much bigger scale with moving a whole lot more happening.
J.B. Hager:
What were some of your big breakthroughs in the process? Like, you’re stumbling around, you’re stumbling around. “Now we got to grow, the orders are coming in.” Whether it was a piece of technology or a building or a key employee, what were some of those really big breakthroughs where you’re like, “Okay, now, now we’re moving forward.”
Dan Ratterman:
Yeah, for sure. There’s a couple things. One is the software we’re using. Selecting the right things, which conveniently with ShipStation for our shipping software. And then there’s a local company called SkuVault that does inventory management. So working closely with those teams, getting all the right systems and processes set up. Making them as simple as possible, making them as error-proof as possible. But probably the even bigger thing was just developing the team.
We didn’t come in with some warehouse team ready to go. We started one person by one person and still are very particular about making sure we have the right people. Not who just can pick and pack orders fast, but who have the right attitude, the right mindset, and really want to do the right thing and help us grow. So that’s taken some time, but one by one, found a really, really good team. We got in a good supervisor and our director of fulfillment on the team that’s helped us grow. And that’s probably been the biggest key.
J.B. Hager:
I was going to maybe wait to talk about the nonprofit side of Shady Rays at the end, but I think it’s very important when you talk about recruiting talent. Which here we are, end of summer of 2021; everyone I know with brick-and-mortar businesses around Austin, where I’m located, has a hell of a time hiring people. It’s really hard to get young talent. It’s obviously been the weirdest of years. But having the nonprofit angle… And this whole generation, my daughter’s 19, I see it. They want to work for a place with purpose, right? They love the story. They don’t want to just sell something. Shady Rays has quite a cool story on feeding a lot of hungry people. And I think that probably helped with recruiting, did it not?
Chris Ratterman:
It did. It helps in a lot of ways. I think what you just explained is something that was always important to me in the beginning in starting the company. So it was not a marketing tactic. I literally was looking to develop a brand that did have a purpose and I was not interested in selling just products for cash. It was way too hard of work to not have a greater purpose. And so that was something that we did since the very beginning. And we could talk more about our specific partnership with Feeding America. But now we have a team that is also equally as passionate about that cause so it’s integral to our culture. It absolutely helps with recruiting. And honestly, it’s also a filter for recruiting.
Chris Ratterman:
If we’re interviewing somebody they’re not passionate about that, they’re not right for our team because that is a piece of the puzzle. I mean, we talk about the three legs of the stool. It’s high quality for price and the warranty and the charitable component. And that’s part of our sale. I don’t lead with it because it’s not the selling tactic. We’re not using that to sell to customers, but it’s definitely a key part of that. And then it’s big in community building with our own customer base too.
J.B. Hager:
Do you remember when Oprah did a big special about world hunger and they were showing where the problems were in America that are a lot worse than people realize? A lot of the people they profile were right in your backyard, like in Kentucky and that area. A beautiful part of the country, but there is a lot of poverty in that area that they profiled on that special. And it made me think of that. Is that part of the reason for choosing feeding people because of what’s going on in your own state?
Chris Ratterman:
I would not call it our own state. I would call it the US as a whole.
J.B. Hager:
Okay.
Chris Ratterman:
I think we were just seeing food insecurity, especially with children, as something that really is a pervasive issue that needs to be solved. It was something that I was passionate about, our customers were passionate about. In partnering with Feeding America, we were able to really have a tangible donation for every order. So as opposed to having, which of course there’s nothing wrong with this, as opposed to having a percentage of sales that go to X Foundation, we wanted to be able to really do something tangible with every customer. And 10 meals per order is what we’re able to do to be able to deliver that to food banks around the country because Feeding America operates food banks and pantries in every zip code throughout the US. So we could have a very tangible impact. And that’s what helped drive it. But number one, first and foremost, the cause, but two, the amount of very tangible impact that we could have for every order that goes out the door.
J.B. Hager:
That really is remarkable when you’re placing your order, that it’s 10 meals. Every pair of sunglasses.
Chris Ratterman:
10 meals.
J.B. Hager:
And you heard them say earlier you’ve had 10,000 pairs go out in a day. That’s the impact of that is mind-blowing. Do you have any ballpark number of how many meals you’ve provided since Shady Rays began?
Chris Ratterman:
So we provided over 20 million meals since the beginning.
J.B. Hager:
Wow.
Chris Ratterman:
The vast majority of that is through Feeding America. Our global sales, international sales donate through global food baking network, but the vast majority is through Feeding America.
J.B. Hager:
Wow, that’s incredible. And then you’ve also done some one-off special edition glasses for other nonprofits, is that correct?
Chris Ratterman:
Our goal is to just be a nimble do-good brand and being able to do good in a lot of different ways and help what we can. So every year in October, we support breast cancer awareness and have a limited edition. We support American Cancer Society work with them. And in particular, for that donation, we provide rides for people to be able to get to treatment that are not able to otherwise. We have an incredible partnership with a foundation out in San Diego called Best Day Foundation. They provide just really amazing outdoor experiences to children that have autism or other similar type of conditions. There’s a variety of others. I mean, when California forest fires hit last year, just on a dime we donated $10,000. And that was not even related to a product, but it’s just we want to be able to help where we can and do a variety of things. And so we do. And so Feeding America support is the always-on, 365, 24/7 partnership. And then there are other things that get layered in as well.
J.B. Hager:
We have to take a quick break, but when we come back, we’ll hear from Chris and Dan about the dynamics and challenges of running a business with your sibling and their take on paid marketing. Stick around.
J.B. Hager:
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J.B. Hager:
Now, we often, or I often, talk to couples who started a business together and there’s a lot of good, bad and ugly living, eating, and breathing it together. What’s it like with siblings starting a company together? You got to give me the good and the bad.
Dan Ratterman:
Do you want to do this and start here? I mean, yeah, I’ll kick this one off. I mean, I think there’s a lot more good than bad. I think even looking back in childhood, Chris and I are six and a half years apart, which probably leaves to a good thing in this point, having that much time between us because we didn’t have as much of that direct rivalry. So now as we’re working day to day together working on building the business day in and day out, there really is the right mindset, I think, between us of working together, working on the same team to solve a problem or to see that growth or to build to the next level. I think even there’s plenty of challenging times as there are in any business, but I think we’re effective at keeping emotion out of it, keeping focused on what the goal is and then working towards getting to the right point.
Dan Ratterman:
So honestly, I don’t think there’s really been a whole lot of bad over the last couple years and really just more so good. I mean, it’s awesome coming in every day and be able to work together on this.
Chris Ratterman:
Yeah. I mean, I certainly echo that. I mean, we were not competitive so we’ve always been very close. That helps us. But we’ve definitely dealt with very challenging, high-stakes work-related problems together each year. And of course, as we grow and grow, those get to a higher and higher level. I think for me the mentality is, always has to be, the relationship comes first. You know how this can go in family businesses, in a close relationship, you can destroy a personal relationship over a business. So in my mind, we have to have the mentality of, you can’t let money, you can’t let these type of work situations damage the relationship. You’ve got to put that first. Period.
Chris Ratterman:
So that’s just the mindset. I think we’ve not had real personal issues of any degree. So we work through things well together. If I didn’t think we were going to be able to do that, I wouldn’t brought him on the team in the first place. There’s other people close to me that I wouldn’t have brought on, right? I didn’t want to set us up for failure. It’s been very successful. Obviously, it’s a dream to be able to work with him every day. We come to the same office and working on the same problems and we speak the same language in business. And so that’s great. But I mean, you got to put the relationship first, otherwise, you can let it get out of hand. And we’ve seen that.
J.B. Hager:
Do you find that being siblings, there’s no filter? Like you can say anything to each other that you might not say as CEO to another COO if you weren’t a sibling?
Chris Ratterman:
Well, I mean, I think, yeah, we can talk real honestly. Then it makes it seem strange to talk in a more buttoned-up corporate fashion then, right? Because we just have that relationship. We’ve got to talk in that way. And then it’s a shift then. We’re doing end-of-the-year reviews, we’re talking together, and then we’re talking to other team members. It is a different mindset. We just got to handle it in a unique way.
Dan Ratterman:
Yeah. And to add to that too, I think when we are working through complex problems or just working through day-to-day issues, being able to be more candid helps us operate in a much faster, more efficient way to it. We don’t have to do kind of a more professional approach all the time. We can just get right to it, get stuff solved. But yeah, I mean, I think overall it’s a huge benefit for us.
Chris Ratterman:
And the challenge can be we think very similarly also.
J.B. Hager:
Yeah. Right.
Chris Ratterman:
So we need sounding boards that come from a different perspective. I think that’s something that I’m always cognizant of, but we’re usually pretty aligned.
J.B. Hager:
No, you make a very, very good point. I come from media and entertainment and I said, “You don’t want two people who are just alike on the show. You want those other perspectives, other thoughts.” And that applies to companies as well. How do you add diversity? How do you get a female perspective? How do you get a minority perspective on your business and reaching them? So is that something you’ve worked with and dealt with?
Chris Ratterman:
Absolutely. 100% that is our goal as we continue to build the team, to increase diversity in different perspectives and bring in a lot of different people, different age groups coming from different industries, living in different parts of the country. A lot of different types of people that all align around the core mission and values that we have as a brand. And that’s how we’ll be in sync together, but be able to stress test things from a lot of angles. And of course, we have outside partners, agency partners, and different things as well. But well, that’s crucial.
J.B. Hager:
When you say agency partners, let’s talk about other marketing plans besides pounding the pavement which you guys have mentioned, testing the influencer model which you’ve mentioned. Obviously, you guys are masters at e-commerce and direct-to-consumer online. I think you’ve got that dialed in very well. Have you used any outside advertising agency, any sort of third-party marketing plans, strategies that did or did not work?
Chris Ratterman:
Well, one thing that we do in-house currently and have since the beginning, but I’ll give a couple of examples of this, is what’s happened along the way, is all of our digital advertising, all of our media placement. And that includes podcasting and radio and all of social media networks and digital; we do that entirely in-house. That was what I did in the very beginning of myself. Now, over the course of time of the business, we have attempted to bring in agencies to do a piece of that so that we could make sure that we have the learnings to see the best practices. In the past, in both cases that it did not work, we brought it back in-house.
Chris Ratterman:
But I think we’re always looking at where the right partners are for different types of the marketing mix. We need to make sure that we’re not working in a silo. We have a lot of that expertise in-house, and there are a lot of things that we can do. But those [crosstalk 00:33:13] some examples from a direct media standpoint have not worked well. We do have a really strong agency partner for all of our web design websites and optimization coding. You go through our replacement site for our warranty. No one else is offering a warranty like us that was not an off-the-shelf solution. We built it from the ground up. And so that requires a lot of work and continued maintenance. And so, we do have our strongest marketing partners in web development.
J.B. Hager:
I’m dying to know how the design part of this all works as well. It’s tricky buying sunglasses online. And then you guys have some great designs, but people don’t know how they look on them until they get it. So tell me about the design process and then how it works with people if they do get a pair of glasses and they’re like, “No, these just don’t fit the way I want them to.” Elaborate on all of that, part of it.
Chris Ratterman:
So, number one, a lot of the ideas that we’ve gained throughout the years have been through real-time feedback from customers. So we’re monitoring Facebook comments, and emails that we get for the types of things that people are looking for. That is the number one way that we get ideas and start to work with our designers and come up with new products. Of course, we’re doing customer research, customer surveys and all the time doing more and more of that so that we can have consolidated feedback from our customer base, but we consider it to be a very fluid process in order to come up with ideas and seeing what’s hot in the market and where we need to innovate next.
Chris Ratterman:
Typically what happens is, between me, Dan, and our marketing team, we are getting together, we’re doing brainstorming sessions, we’re looking at customer data, and we’re coming up with a wide range of ideas related to things that we could do. That could be a frame shape. That could be a colorway. It could be a different type of activity that we want to solve for and develop a product for. Sometimes it’s a more simple frame that many companies might sell or close to that with our spin on it. Or sometimes it’s completely new to the world’s patented design. Obviously, we’re looking at all the ideas from a total collection perspective and making sure that everything is consolidated and strategic, but we’re starting the ideation process obviously going very wide and looking to all the things we can do.
Chris Ratterman:
And then we have a variety of designers that have worked. Some have worked in just general clothing and accessories, mostly other products, and they come with that perspective. Some are very much ingrained in the eyewear industry. We have them take those initial ideas in that direction and come back with designs. And of course, we’re off to the races. Then on three sampling, preproduction samples, colorways, and materials, we’re working that all the way through between supply chain and marketing.
J.B. Hager:
The other part I kind of threw onto that is, how do you put people’s minds at ease about buying something they can’t try on? It’s a tricky thing. But in the new world, I never thought I’d be buying sunglasses online, and I did it on Monday.
Chris Ratterman:
De-risk. De-risk. De-risk. Make it easy to say yes. Period. Free shipping, free returns, unlimited exchanges. If you don’t like it, you will pay nothing. We will take care of it. If you don’t like it, we don’t want your money.
Dan Ratterman:
Yeah.
Chris Ratterman:
Simple as that.
J.B. Hager:
Earlier, Chris, you said, “There was a point when I almost ran out of money.” What was that like? And when was that? And you still chose not to do a big raise and take investors, so break that down for me.
Chris Ratterman:
So while the company was founded in late 2012, really, it took 12 to 18 months to even find manufacturers to even begin an order with and start sampling and develop a logo and figure out how to build a website. So it was a long process. So it was in 2014 when we had a little bit of product and could start trying to sell and see what would happen. What that looked like specifically was I was setting up ad accounts and Twitter and Facebook and Google and learning by doing and putting money, small amounts of money into different campaigns to see what we could drive sale. I’m talking about a campaign might be $10 a day, $20 a day, and just trying to figure out what would be the copy and the image and the ad platform that would hit. It was many tries, many swings and misses in order to find what initially was the first place where we found success.
Chris Ratterman:
And so we did get down. I had a little bit of product. I’m trying ads on Facebook and Google. They weren’t working. Down to about a thousand bucks, which a thousand bucks goes real quick when you’re spending in digital ad platforms. The first thing that really worked for us was Twitter advertising, which is not what you would typically hear from an e-commerce brand. And it’s not where we’re spending today and it’s not where most brands spend in terms of direct response, right? We do a lot with Twitter and Twitter’s a great platform for us, but from a direct response standpoint, it’s not typically the first platform that you think about, but found success early on a really, really small scale, but repeatable, scalable enough that we could continue to build it and try other things. And eventually, it kind of shifted and folded in the rest of the channels.
Chris Ratterman:
A lot of times people ask me, “At what point did you know this was going to be a rocketship?” right? “At what point did you know that this was going to take off?” It never really felt like you hit those moments as a big, massive win that is guaranteed to be off to the races. There were smaller wins that need a building at that very next step. And so success on Twitter was one of those things, but it was just enough to get to that next platform, enough to get to that next platform, enough to continue to find our way through the trees and try to create the path to success. But that was what that was like.
J.B. Hager:
That’s interesting because I’ve known a lot of people that have success with Google AdWords, but is it because… I want to know your take on it. It also depends on how competitive those keywords are, right? So I imagine the sunglass space in Google AdWords is highly competitive.
Chris Ratterman:
In the beginning, it was prohibitively expensive because we had zero brand awareness and you did have large known brands spending on the keywords that we needed to spend against. Now we do spend against those keywords that are searched at a high degree because we have built the brand up, and it’s a piece of the puzzle for our media mix. But in the early days, not having experience running on that channel, it was a non-starter for me in the early days.
J.B. Hager:
I’m dying to know, and you don’t have to answer this if you don’t want to, but you said you started it with what? $17,000? I guess this is the COO’s question to answer. Do you have a valuation of the company today?
Dan Ratterman:
We do not have a public valuation.
J.B. Hager:
Okay. I guess you throw that stuff out when you’re raising money, right? And if you’re not raising money, no one needs to know, right?
Dan Ratterman:
Exactly. Exactly. But it’s more than $17,000 now. I’ll say that.
J.B. Hager:
Have you had offers to sell the company? Or to buy the company I should say.
Chris Ratterman:
We are not focused on selling the company. We are focused on building the brand and building it as an independent company that
J.B. Hager:
You’re in for the long [inaudible 00:41:09], huh?
Chris Ratterman:
That’s been the goal. I think when money drives the ship from the very beginning, you inevitably aren’t doing the right things to build the brand for the long term. You’re making short-term decisions. We’re focused on making the right decisions for the brand and building it in a sustainable way, and building a strong foundation. And so that’s where our focus is.
J.B. Hager:
Do you remember the very first order that first time your computer went bing?
Chris Ratterman:
Yes.
Dan Ratterman:
Yeah.
J.B. Hager:
Tell me about it.
Chris Ratterman:
The very first day that the website was up and we had products to sell, I told my girlfriend at the time, now wife, that I was going to head to the coffee shop. And for four hours, going to engage in the very first idea I had for customer acquisition was to go on twitter.com and search for people that were mad about losing or breaking sunglasses and message them that we replaced lots of broken sunglasses.
J.B. Hager:
Okay.
Chris Ratterman:
Copy paste. It’s going to do that for four hours, right? That’s free. That’s a scrappy way to do it. Well, I took about 45 minutes and Twitter account got banned, and suspended for spamming. Closed my computer
J.B. Hager:
Day one of the company, basically?
Chris Ratterman:
Day one. Day one. Day one. Closed my computer. I went home. She says, “How did it go?”
J.B. Hager:
Oh, my gosh,
Chris Ratterman:
I said, “Not great. I think it might be over.” And then an hour later, my phone dinged and it was sale number one.
J.B. Hager:
Wow. So that’s cool. And how much money did you make on that first pair?
Chris Ratterman:
$18.
Dan Ratterman:
I can also remember when Chris first saw a random person wearing Shady Rays.
Chris Ratterman:
Yes.
Dan Ratterman:
I think he called me in Costco or somewhere, and he would just losing his mind and probably
J.B. Hager:
Just a random person?
Dan Ratterman:
Yeah.
Chris Ratterman:
It was a completely surreal experience. Of course, I had to chase him down in the store. I had to talk to him. I didn’t tell them who I was, but I was like, “Hey, how’d you like sunglasses?” He was like, “Oh yeah, they’re great. I found them online.”
J.B. Hager:
They just stumbled across it. No, I love that. It’s very similar. On my years in radio, I love to ask artists, “Do you remember the first time you heard your song on the radio?” And this is the equivalent of that. I imagine a lot of people listening are still doing the fulfillment out of their living room, right? And they’re listening to this and being inspired. Can each of you, Chris and Dan, give us a nugget of wisdom for a direct-to-consumer company doing their own fulfillment? What would you share with them that will give, get them through that horrific day like you had? What can you share?
Dan Ratterman:
I would say from the fulfillment side like you reference, the biggest thing for us is all about just simplicity. As you go from one order to five orders to a hundred orders, making sure that you keep things as efficient and simple as possible so that when you do need to add people or add any new types of processes or any complexities, it still could be as simple as possible because it’s very easy to try to add a piece of the puzzle and then it makes things more difficult than it needs to be. So that’s been an ongoing focus. Even at the size we’re at right now, it’s just keeping things airproof, keeping things simple, and always looking for ways to improve. A lot of people on our team come in and just want to find one thing each day to make something better, something easier, something more simple. And over time, after the course of a couple of years, we’ve made things really efficient and run really smooth.
J.B. Hager:
Chris, would you like to elaborate on that?
Chris Ratterman:
So for someone who is very early on and shipping out of their house and having trouble growing the brand or really getting it off the ground floor, to me, I think the most helpful thing probably to share is that I would recommend doing as many as small tests, small consolidated tests, as you possibly can to figure out the customer acquisition channel. So those can be a lot of different things online, from influencers to add platforms. Of course we went as away from that as small kiosks, right? Because we were trying to test anything and everything to see what that model would be for customer acquisition. Because once you find that, you can grow from that. You can scale it. You can build it.
Chris Ratterman:
Number one, you need to know your numbers. You need to know how much you can spend to acquire a new customer. And that might look like a little bit of profit on the first sale, or it might look like a loss on the first sale because they might repeat two or three times, but you have to start with knowing your numbers and how much you can pay to acquire a customer. And then from there, go out and measure the results of small tests to see how you can acquire customers. And you can get creative with it, whether you’re using influencers or whether you’re literally looking at the data within an ad platform. But you do have to try a lot of those different things.
Chris Ratterman:
2013, ’14, it was Twitter for me. That probably is not the case today. But there’s always that evolution of social media. It might be TikTok. It might be Reddit. It might be different things. There’s always that new opportunity. Especially when you’re at a really small scale, there’s always the opportunity to spend a hundred dollars to make it 200. Spend that 200 back and make 250. You might be operating on the skin of your teeth, but you’re building the brand along with it and you’re building a consumer base. And so testing as much as possible and then looking at those tests and seeing which is the most effective. Maybe two of them work, but maybe one of them is more scalable and a little bit more profitable, throw all your energy into that one. Stay focused. Don’t get fancy. Don’t build out your organization too early. Don’t try to do too much that might look good on paper. Hire a PR company. Some of these things don’t necessarily move the needle. Focus on what is going to drive sales in the early going.
J.B. Hager:
This is great. Chris and Dan Ratterman, Shady Rays, shadyrays.com. And I never even mentioned the word polarized in that $50 pair of sunglasses. I noticed too in the aviators you have a regular size and a small size. My wife and daughter, almost any pair of sunglasses I’ve ever brought home for them, they’re like, “It’s too big. It’s too big. It’s too big.” You guys have done some work on that, and it’s impressive. So great designs. Go check it out. And where else can people contact you through socials or personally?
Chris Ratterman:
The brand on social is @shadyrays on Twitter or Instagram. You can also find us on Facebook. You can always reach out to our team, [email protected]. They can route things to our marketing team or to us. Those are the best ways to reach us, I think.
J.B. Hager:
Chris and Dan, thanks so much for joining us on Get Ship Done.
Dan Ratterman:
Thanks for having us. This was awesome.
Chris Ratterman:
Thanks so much.
J.B. Hager:
Tune in next month when we talk to Stephan Aarstol, a Shark Tank success story and founder and CEO of Tower Paddle Boards. Stephan landed a deal with billionaire Mark Cuban back in 2012 and has since grown his company into a booming direct-to-consumer business that has grossed well over 40 million in sales.
Thank you so much for listening to this episode of Get Ship Done. If you haven’t subscribed, feel free to hit that follow button wherever you get your podcasts.
