Ridge pockets started via a Kickstarter effort in 2014. Ultra-thin, metal-clad, with RFID protection, the pockets are enormously popular in the U.S., with $50 million in sales in 2020 alone. Influencer advertising has driven much of the growth.
Sean Frank is The Ridge’s chief operating officer. He explained,”We sponsor a good deal of influencers on YouTube. Roughly 750 in 2020, when we spent $3.9 million on 3,000 unique videos. That’s 10 new videos a day that we are integrated with.”
Frank and I recently discussed the provider’s process for handling influencers, in addition to its founding, global expansion, and, yes, selling on Amazon.
Let ‘s see our products:
Our whole audio dialog is embedded below. The transcript that follows is edited for clarity and length.
Eric Bandholz: Inform us about The Ridge.
Sean Frank: We have one primary solution, the Ridge Wallet. We began on Kickstarter in 2014. Since that time, we have sold probably 2 million pockets, and we found bags, knives, and telephone cases. Nevertheless, the most important thing is the Ridge Wallet.
Bandholz: It is a minimalist pocket with RFID protection.
Frank: It is the smallest a wallet can get. It is the size of a credit card with two metal plates on the exterior made from premium materials — such as carbon fiber and titanium — with trendy designs.
Prices vary from $75 for an aluminum pocket to $175, which is our Damascus design.
Bandholz: I am doing the math — $75 times 2 million is $150 million since inception.
Frank: Yes. We are still growing at 50 per year over year. We did $50 million in revenue this past year. We are not slowing down.
Bandholz: how can you develop a $50 million manufacturer?
Frank: It requires chance. That is the first part. Our CEO, Daniel, and his dad, Paul, began it. They place it on Kickstarter with no background or training. Paul was a special ed teacher for 35 years, and they only had a cool layout. He is currently our semi-retired chief financial officer. Our organization is entirely bootstrapped — no debt, no investors. Four people have equity ownership. We have approximately 20 employees.
Bandholz: That is $2 million a worker. It’s unreal. Are you stressed to the gills?
Frank: That is the amount we care about, the earnings per person. Public commerce businesses are nowhere near this. Everyone here works really hard. I hope they are not burned out. We do not have investors. That simplifies our direction. I do a whole lot of tasks. Daniel does product development. Paul still functions as our CFO.
So, yes, we are a lean team. We have two broad internal departments: people who sell wallets and individuals who save us money. The individuals who sell wallets are the marketing group, including our influencer program, which I am involved with. Individuals who save us money are the logistics supervisor (who brings everything from China), our operations person, three people on the wholesale group, and a five-person customer support team.
Bandholz: Let us talk about your influencer program. That appears to be a major chunk of building awareness for your organization.
Frank: Yes. We sponsor a good deal of influencers on YouTube. Roughly 750 in 2020, when we spent $3.9 million on 3,000 unique videos. That’s 10 new videos a day that we are integrated with.
Bandholz: how can you protect your brand when using influencers and make sure that the price is appropriate to be rewarding?
Frank: We’ve got two people on our staff. Neither had done it before. One, a female, worked at TikTok. She has a fantastic Instagram following. So she’s knowledgeable about the space. The other, a man, has been with us the longest. We look for fresh supervisors and then train them.
Influencers want as much money as possible. Everyone does. But we are transparent with all the numbers that work for us. We are going to inform an influencer,”We have sponsored plenty of people. That is what we typically pay. We wish to work with you. But if you do not wish to, that is fine. No ill will.”
We are industry agnostic. We’ll work with anyone. We’re a secondary revenue source for those people. There are likely 50 accounts we have worked with for two years that always deliver answers. To them, it is a guaranteed paycheck because they know they are working with us, and they can budget around that.
The point is, influencer advertising is pay what you would like.
Our first communication with a brand new influencer is, like,”We like you. We’re interested. We think this can work. Can we get demos?”
A good deal of brands believe they know who their client is — age, location, sex. We are not that specific. If your station is two-thirds English speaking and 50-percent guys, there is a great chance we wish to work with you. That is basically every station on YouTube, incidentally.
After we receive the demos, we determine that a price per movie. We look at their past 10 videos. Then we take a CPM number which makes sense to us. That is typically in the single digits — $3, $5, or $7 per thousand views. We do some math and provide $250 a movie or $300 or anything.
They will typically say something like,”I need $2,000 a movie.”
We are going to respond,”We can provide you $2,000, but we want six videos” It is finding common ground. If they need $2,000 a video, which usually means they need $2,000 overall.
Plus, we cover everybody up front. Then it is hands-off afterward. Certainly someone could steal the money and leave. That has happened maybe four times in the previous two decades.
We are going to inform an influencer,”We do not have to approve your movie. We do not care what the material is about the movie. We do not really care where you place the ad in the movie. We are going to send you a item. We are going to send you money, and you set the videos out like we agreed to.” There are no contracts.
Bandholz: Changing the topic, The Ridge is self-funded — growing throughout gains. What are your plans for climbing to $100 million in annual revenue?
Frank: First, our advertising bucket would have to change. Ad costs are becoming more expensive. Our CPMs on Facebook were up 100 percent year-over-year for most of 2020. YouTube pre-roll CPMs were up 300 percent. Thankfully we’d pre-booked advertisement space at preset prices.
We are going to hire two or three more people this year on the advertising team. There’s a chance for us to enter Instagram; we are going to begin spending money there. We are also going to spend money better on TikTok, Twitch, and Twitter.
Secondly, the performance side of this business would need to evolve for global clients. We’re now about 90 percent U.S. sales. We will need to find more international. We launched localized online shops in Canada, the U.K., and E.U. using their own money checkouts, payment options, and local stock for fast deliveries. We hope to include Australia and Japan shortly.
We are on Shopify. We have duplicated all the shops and then localized every one. When I log into Shopify, I’ve got five accounts today.
Bandholz: Do you’ve got fulfillment centers in those places?
Frank: Yes, local fulfillment. We’ve got a good deal of warehouses. We have two key ones in the U.S., and then one in every market — Canada, U.K., E.U.. We’ve got a customization warehouse at the U.S. for clients who want their name engraved in their wallet or anything. Then we are on Amazon in all those markets, using Fulfillment by Amazon. So we are probably sending products to 10 to 11 places.
Bandholz: We have talked about reaching $100 million. What is happens after that?
Frank: If I could tell you my fantasy, it would be for Yeti to purchase us as a strategic purchase. We do digital better than them. They’re a huge company — billions of dollars in earnings, but Covid exposed them. Two-thirds of their earnings happens in person. I believe we’d really add lots of insight into what they are doing. That is my dream.
I am cautious of an IPO. I have had friends who have taken companies public, and they said it is the worst experience ever. I don’t think any of us in The Ridge is up for this. If we could have a $100 million per year business with a $20 million EBITDA, that is a strong business to continue to.
Bandholz: You could live a fantastic life making that sort of money. Even though some would say making more than $200,000 annually doesn’t enhance the happiness quotient.
Frank: Yes, All The Ridge’s owners are down to earth. All our lives would get worse with more cash. I honestly believe that.
Bandholz: Let’s discuss Amazon. How it is working for you?
Frank: You’re ahead of the curve at Beardbrand speaking about the evils of Amazon from a merchant perspective. If you’re a branded solution, Amazon is a double-edged sword. Amazon does not do a fantastic job conveying brand value. And it forces you to contend with subpar goods, which is a massive issue for us. There’s a whole lot of knock-offs to our goods on Amazon. Our Amazon company was eight characters in 2020. However, other vendors you will find violating our patent. When we go after those people, Amazon isn’t the best partner.
With Amazon, you are paying for a costly warehouse. When Covid struck, Amazon restricted inventory levels and pushed our dispatch days from two days to four weeks. It seems like a multi-level advertising scheme with the advertising budgets they need.
Those are a few of our problems with Amazon. We are going to continue on that platform, but a huge focus for us is not growing Amazon. If you are a DTC brand or a superior good, focusing on growing Amazon isn’t the perfect thing to do.
Bandholz: How can our listeners know more about you and reach out?
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