02 Jul Randy Stocklin | Running a Multiple-Brand Business
Buying an existing business can be a great way to kick-start your ecommerce career. But not so fast, says Randy Stocklin, co-founder and CEO of One Click, which has three eyewear brands online.
He shares eight key factors to look for in a quality acquisition. We also talk about the key element you must have in place to grow revenues and why at one point he chose to sell off parts of his business, as well as…
- The biggest disadvantage to drop shipping
- Why you should create an environment for your employees to thrive
- How to recognize when you haven’t set the bar high enough
- The best way to organize your team to run a multi-brand business
- And more
Mentioned in This Episode: www.oneclickventures.com
Joris Bryon: Hey, this is Joris of the ECommerce Excellence Podcast, and today I’m real excited because I’m going to be talking to Randy Stocklin. Randy is a co-founder and CEO of One Click. He and his wife started their company from their home office with the idea of offering people a convenient and affordable way to buy eyewear online.
Today One Click owns and operates three successful eyewear brands online and that’s felix + Iris, Sunglass Warehouse and Readers.com. In addition to his current work at One Click, Randy also enjoys supporting other entrepreneurs as an investor and as an advisor.
Randy, welcome to the podcast. It’s an honor to have you here.
Randy Stocklin: Good morning. Thank you for having me. I’m thrilled to be with you.
Joris Bryon: All right. Just to get started, love for you to tell everybody a bit about your background. Where’d you come from in your career? How did you get started in ECommerce? And how did you get to this point?
Randy Stocklin: I started my career working in software as a software engineer for a company that developed internet banking software. So that was my first job after graduating from Franklin College in the year 2000. And so I spent about 18 months working for that company. That company was acquired by a firm on the West Coast, and then I transitioned to a company named Angie’s List, where I spent around three years in a software role, similar type of role. And then I moved onto a company named Primo that developed marketing automation software. And then it was when I was at Primo when I started One Click with my business partner Angie.
Joris Bryon: Mm-hmm (affirmative). All right. And One Click, how did it get started? I mean in E-commerce, did you start selling eyewear right away?
Randy Stocklin: No, not exactly. We were looking at a variety of different business opportunities from software company to franchising. I mean really, we were casting a pretty wide net in terms of the type of business that we were open to starting or buying. And we launched this business on our own in the holiday season. It must have been around October of 2004 when we … or, sorry, October of 2005 we launched this business that promoted letters from Santa Clause. So they were these personalized letters. We weren’t actually producing the letters, we were just an affiliate site that … We were promoting the product and sending the traffic to another website where customers could check out. And the letters were actually postmarked from Santa Claus, Indiana which is a real place in the state that we lived in at the time. And so, we generated somewhere in the neighborhood of one to two thousand dollars in revenue and we thought we had hit the lottery.
And so, we said, okay, well, we learned some things from this experience that we think could apply to other online business models. And so, I had personally always had an interest in selling a physical product online. And so we started looking at physical product businesses as part of our process to evaluate business opportunities. And we ultimately found this sunglasses business for sale in Tampa, Florida. And so we liked a number of things about the business, primarily the size of the product, because we were thinking that initially we would start the business out of our home, in terms of shipping the product. So, sunglasses were easy to ship. So, this business that we found, Sunglass Warehouse, sold value sunglasses. And, that was our first. And we took money out of savings. We purchased that business. And a few days later we had sunglasses showing up on our porch. And we had a lot of things to figure out.
Joris Bryon: Yeah. Was it already an online business? Or was it an offline business that you took online?
Randy Stocklin: No, it was an online business. It was generating less than $100,000 of revenue a year. So, it was super small. And it was more of just a side project for the owner at the time. And he was interested in doing some other things. So, it was a good time for him and a great way for us to get started.
Joris Bryon: Yeah, for sure. And do you any advice for people that are looking to start an e-commerce by buying an existing site, instead of starting it on their own?
Randy Stocklin: It can get you past the product market fit phase. We knew buying Sunglass Warehouse, we knew there was some demand. We could see that. We could look at tools like Google and other tools, online tools to know that there was demand, but actually seeing this customer base and revenue base, that certainly validated the market opportunity from our perspective. So, there’s certainly value in getting some level of market validation early on. If I were buying a business today, I would be looking very closely … You always start with the people, right? The people that you’re buying the business from. Is there good value alignment? You feel like their good people? And they have high integrity? Because if that’s the case, then you’re likely going to be going through, navigating some tough conversations with them as you work through the transaction, so you want to work with good people. And you also want to know that they were taking care of their financials appropriately and doing their best to cover any legal gaps, that sort of things, just making sure they’re running a well-managed business.
And then I would look at … a consumer. I would be looking closely at what are they paying to acquire customers, so customer acquisition costs. How much profit are they generating from a customer over time, so customer lifetime value. And then where are they generating the revenue from? And how … looking at the customer acquisition cost and customer lifetime value dynamics, do you feel like those channels, are there still opportunities in those channels to expand and scale? That for me would be, that’s where I would start.
There are clearly a lot of other factors at play, but I really try to understand early on, are they good people? And looking at the customer acquisition cost and lifetime value data, you can really get a sense for, by channeling, really get a sense for at least, looking at the business through that lens, how much scale there is. And then I would also try to understand the market opportunity. I’d try to size the market and make sure I was comfortable with the total addressable market.
Joris Bryon: Yeah.
Randy Stocklin: Very, very high level. I mean there are so many other things. We could spend an entire week on this topic, but hopefully, that gives your listeners a few nuggets to look at, at a high level.
Joris Bryon: Yeah, absolutely. So, it started with just one brand. How did it evolve to three brands?
Randy Stocklin: Well, it was a winding road. We started with the one brand. We tried some dropship businesses. And for folks that don’t know what a dropship business is, it’s where you buy the product from a supplier, and they ship the product on your behalf. And that model for us just didn’t … The brands that we purchased where we started was a combination of launching our own brands and acquiring brands. That model didn’t work well for us, because we really like to have control, full control end to end of the customer experience. That’s such a big part of what we do here. And we have a team called Customer Happiness. We’re super passionate about delivering an amazing experience.
And it wasn’t like this in every case, but by and large, we just were having a difficult time getting aligned with our supplier partners on expectations around the customer experience. And so, we didn’t really enjoy operating those businesses as much as the businesses we were operating where we controlled the full experience. So, we tried a few of those things out. We tried a few of those different businesses out. And then we started bolting on fashion accessory brands. So, socks, scarves, handbags, neckties, practically any fashion accessory that you can imagine, we likely sold it at one point.
And actually that business model was really starting to scale. It was doing well. And then we, in 2012 … So we acquired the sunglasses business in 2006. From 2006 to 2008, we experimented with some dropship businesses. And then from 2008 until roughly 2013, we started to hone in on businesses where we could control the full experience. And then, we’re in the eyewear and accessories markets. And in 2012, Google went through a series of algorithm updates and that was a signal to us, that we needed to stop being so keyword focused with our business. And we needed to be more brand focused.
And in doing so, that led us down the path of, hey, in order to build really strong brands, we need to be a little more focused on a smaller number of brands. In fact, we even considered one brand at the time. But we ultimately decided to have three eyewear brands. And then by the end of 2014, we were an eyewear only company.
Joris Bryon: Mm-hmm (affirmative). Did you just stop the other business activities? Or did you sell those?
Randy Stocklin: We sold them. We sold six businesses to three different buyers. Then, we took the cap, the proceeds from those transactions and put them back into growing the business.
Joris Bryon: Mm-hmm (affirmative). That makes sense. I’ve got to ask, now you have three brands. But it’s all eyewear you could have chosen as well to just build one shop, one brand. Why did you feel the need to keep going with three separate brands?
Randy Stocklin: We were … That’s an excellent question and one we wrestled with quite a bit. So, we had this growing sunglasses business, this growing reading glasses business, and they were both serving different audiences. Our sunglasses audience was more of a younger, Millennial customer. The reading glasses was more of a Gen X, Baby Boomer customer. And we just couldn’t get comfortable with one brand that could talk to those different audiences effectively. And we also had … Around that time, we had acquired the Readers.com domain name. And we really liked the opportunity with that domain in the reader space. We didn’t feel like we could effectively sell sunglasses on Readers.com. We sell sun-readers, but selling sunglasses to a younger consumer on Readers.com didn’t seem like it would be very authentic. And it just didn’t seem to make much sense. So, anyway, those were some of the things that we factored into the decisions.
Joris Bryon: Yeah, of course. I can imagine it’s not always easy running those three at a time. What are the main pros and cons of having the three brands? Well, all the pros, we’ve already touched up on that, of course. But, what’s the main disadvantage of having those three separate brands?
Randy Stocklin: This is a topic that’s gotten a lot of attention. Really, since we made the decision to only focus on three brands, most of the discussion around this topic has focused on how do you manage the brands. So, do you … This has been one of the biggest obstacles with this multi-brand model is do you leverage a shared resource model where you have these shared teams that allocate their time almost like an agency, where you allocate your time across the different brands and you then prioritize how much time you want to spend on each brand.
And that is the model, generally speaking, that we use here, and it’s worked pretty well. Where this model breaks down a bit is when you want to launch a new brand and get dedicated attention and focus. We don’t have anyone in the building, on our team, that’s waking up every day thinking about only reading glasses or only sunglasses or only prescription glasses. I just see so much value in that.
And so, we’ve talked about this model where we have a brand general manager or a brand manager or possibly even its own … it becomes its own separate, legal, living, breathing entity. And that could be something we’d consider in the future, but it’s not something that we’ve done today. But to me that’s the biggest challenge. The other things are … we haven’t ran into any big obstacles other than that, but that one, that particular challenge is real. And it’s something as we get bigger, get more skills as a company we’ll have to confront.
Joris Bryon: Yeah, I can imagine. So, growing three brands successfully, what do you believe are two or three keys to growing e-commerce business in today’s environment?
Randy Stocklin: Based on my experience here at One Click, first and foremost, it’s the team. We are so blessed here to have an amazing group of people, that are aligned with our mission and our values. And I just can’t stress enough how important having the right people in the right seats is to growing a business. It’s so important, just having good people. We have just incredible human beings here, in addition to people that are really talented. So, that to me is number one.
And second, I would say digital e-commerce seems to always be evolving. So, you really, in my opinion, need to have a team that is full of learners, people that really enjoy learning. You need to have a mentality that you’re very … You need to create an environment where, not just in marketing, but the entire team is comfortable and actively experimenting with things, trying new things. There’s likely going to be a new social platform that emerges in the next 12 to 24 months, so you want to be out in front of that and make sure you identify those things. And consumer behavior changes. So, you just really need to be willing to experiment and be nimble and flexible on the way. So, those are some of the things that come to mind. So, a team full of learners, create an environment where you can experiment, and be very nimble and flexible along the way.
Joris Bryon: Yeah, I know you pay a lot of attention to culture, right? Can you explain a little bit what it is that you do?
Randy Stocklin: Sure, at One Click, we’ve been very intentional about the culture that we want to build from early in the business. And one of the things that I share with all of our new team members … so, I have a 90 minute on-boarding session that I have with all of our new team members. And one of the key points that I share during that session, is that every single person on the One Click team owns culture. I’m not the sole owner. No one else is the sole owner. It’s a team effort. And I really feel like people at One Click take ownership of our culture. And that’s been awesome to see over the years.
And for me, when I think about taking ownership of the culture, for me that gets back to our mission. And it’s about team member success, customer success, community success. And those are the three pillars of our mission. We have a ping pong … We have a beautiful game room. We have a ping pong table, foosball table. We celebrate wins. We have catered lunches. We do a lot of things that I view as perks, but those things do not define our culture.
Our culture is about team member success. Are people here able to achieve the company’s goals, and do so while pursuing their own professional goals and dreams? I think that’s so important. For me, it always comes down to, business almost always comes down to people. And are we supporting our team? Are we giving them resources to be successful, in pursuit of their own professional goals and dreams and the company’s goals? And in turn, do they have the resources necessary to provide an amazing experience for our customers and give back to the community?
So, when I think of culture, those are the things that come to mind. And I’m really blessed to be part of a team here that values those things and that means more to me than anything we do as a company.
Joris Bryon: I know that culture sometimes … When you start out in e-commerce, it’s all about quick growth and selling and getting stuff done. And at some point people start to think about culture as well, because they understand it’s important. People who are right now in a stage of thinking about culture, what would you recommend? Where do you start? Because it’s such an intangible concept, it’s sometimes hard to get started with that.
Randy Stocklin: I can share where we started as a company, and that was really defining our values, and arriving at a mission that we felt was appropriate for what we wanted to do as a company. And I was surprised at how, I was hoping this would happen, but I was even pleasantly surprised how strong of a filtering mechanism that turned into for us as a company. So, if a company doesn’t have those things defined today, I would, depending on their size, but assuming they have more than probably five to 10 people, I would get those things in. And you could even make the argument that you would do that at … the founding team should do that.
But, certainly early on, make sure those things are defined. And don’t just put them on a wall someplace or put them on the website, make sure you are running your operational decisions through those filters. Make sure you’re running your hiring decisions through those filters. Craft hiring questions. Then build an interview process and a hiring process around those different elements. That to me is where I would start. And if those things are in place, and for some reason you’re still not getting the right people, and you don’t have that culture that you’d like to have, I would go back to those things and make sure that the foundational elements are strong.
Joris Bryon: I think that makes sense. And it’s not that hard, I think. Culture seems like such an intangible and big concept, but if you start there and start building upon that, I think it is doable. I believe your mission is building the world’s people focused eyewear company. That’s right? Isn’t it?
Randy Stocklin: It is. And I would say one other thing about culture. Once you get the foundation built there are clearly tactical things you can do to build on the foundation of your values and your mission. And those things are around, for us, professional development. That’s a big one. Customer experience programs. We have a volunteer, VTO policy where everyone gets two days a year to give back to the community in some way. So, there are a number of tactical things you can do to enhance your culture. And we certainly do a number of those things. And those things are important, but strategically, I always start with the foundational elements.
Joris Bryon: Yeah. What intrigued me in your mission was the world’s most people focused eyewear company. Can you explain a little bit what that means exactly, and how you made that happen?
Randy Stocklin: We think about that in three pillars. So, we have our team members. We have our customers. And then we have our community. And we lay out a five year vision. And we have goals under each of those pillars that we set out to hit. And then every five years, we’ll reevaluate the mission. And we feel like we’ve achieved the mission based on some of these quantitative and qualitative goals that we’ve set. And we’ll have an honest evaluation of the mission every five years as we crack this new vision. But those three pillars permeate across our entire organization. And so, when we do annual planning, quarterly planning, those are the areas that get the most focus. And those are the areas we filter our operational plan through.
Joris Bryon: I like the concept of using those as filters for the decisions that you make. That probably makes a lot of normally tough decisions a lot easier.
Randy Stocklin: I would think so. And then occasionally it makes decisions a little more difficult. And that’s okay. I would say that to me speaks to the value system we have, if we didn’t encounter some difficult decisions around our value and mission from time to time, then I would argue that the bar isn’t high enough.
Joris Bryon: Yeah. That makes sense. If you would start over again, what would you do differently?
Randy Stocklin: Such a great question. I haven’t been asked that question in a while. Let’s see … I would have one brand. We’ve talked about that already. I would have one brand that once again has just been challenged and navigated different points in the business. So, one brand for sure. I would have put together … I’ve had some really incredible mentors and informal advisors, but we’ve never had … because we’ve never raised outside capital, so we were never forced to put together a board. But I would have put together a formal board of advisors early on. And I’d received that advice, and I just felt like at the time that I had enough informal relationships where I didn’t need that. And those were extremely valuable. But I think I hindsight that having a formal board of advisors would have been valuable.
And I would have invested more in our early financial model than I did. We had good financial reporting, I think for the size of company we were. But the tool that we used to plan the business, I felt like we could have moved a little bit earlier to building a more robust planning tool. So those are three things that come to mind.
Joris Bryon: Cool. That’s great advice for other people as well. Because you can always learn from, well mistakes. I wouldn’t call them mistakes but learning from other people.
Hey, Randy this has been great and I’m sure we could go on for a long time, but we’re running out of time. And I want to make sure people know how they can find you and more about you. What’s the best place for people to find you or to connect with you?
Randy Stocklin: You can find me on LinkedIn. And that’s under randystocklin, all one word. I’m on Twitter, but I’m more of a … I just use Twitter to consume news. I’m not someone that’s active on Twitter, but I certainly retweet and like things that I find interesting, and a lot of it’s around retail and direct to consumer businesses. So that’s another way for folks to connect with me. And then our parent company website is oneclickventures.com. And then we have two brands, readers.com, or three brands, readers.com, sunglasswarehouse.com and felixandiris.com.
Joris Bryon: All right. Perfect. Thanks so much for being here, Randy.
Randy Stocklin: Yeah. Thank you. Thank you again for having me. I really enjoyed it.