Ep 36: Benefits of Acquiring a Manufacturer

[00:00:02] Sean: One of the biggest issues in starting the business was trying to find out who the manufacturers were, what their capabilities are, and how you can participate with them, especially if you are brand new and you're just starting your business. So traveling around visiting the manufacturers, seeing what their capabilities were is how I got our start, but some of the problems were quality control, lead times, consistency with the work, and really them prioritizing us as a new business and as a new customer to them.

[00:00:35] Andrea: So to address issues, you acquired the manufacturer. I’m curious to learn about the benefits of acquiring a manufacturer for your business. And because I'm sure that involves a lot of work, how can you make sure to manage it in a way that allows you to succeed and keep scaling? Let's find out.

[00:00:52] Host: Hi, This is Small Business, a podcast by Amazon. I’m your host, Andrea Marquez. This is one of our Minisodes, [00:01:00] which are shorter episodes packed with helpful information for those of you who want a quicker binge. On this episode we'll be talking about manufacturing and some of the best practices for managing inventory and supply chain with Sean Brownlee, the CEO of Ravenox, a direct-to-consumer retailer of custom ropes and cords. You can find them in the Amazon store along with most of the small businesses we feature on This is Small Business. Also, remember that if you want to hear your story on This is Small Business, we have a voicemail line where you can ask questions or share your entrepreneurial story. We want to hear from you! Find the link to the voicemail line in the episode description.

[00:01:36] Sean: Ravenox really started with a sense of finding purpose for me as an individual. You know, and just creating jobs more than anything. I had spent 12 years on active duty in the Marine Corps, where I really had a strong sense of purpose and I knew transitioning out. I was gonna need to find that in my life and continue in that manner. And for me, it came down to creating jobs and how would I go about doing that? [00:02:00] I looked at Amazon and Amazon's business model and how many jobs they've created and how would I be able to participate in that in some manner? And so I ended up forming a rope company that worked with American rope manufacturers because I knew that from my time in the military as far as being able to understand how rope and cordage was made and how it was used and what demographics I went into.

So worked with a lot of American rope manufacturers, private label the products, and sold them on Amazon. And one of the manufacturers that we had worked with, we had grown to be about 90% of their business in 18 months. And due to all the complexities with that manufacturing and how we were selling, we had great discussions and we ended up acquiring our manufacturer. So we in turn became manufacturers and continued selling direct to consumer on Amazon.

[00:02:50] Andrea: What led to you acquiring your manufacturer?

[00:02:53] Sean: One of the issues that we had was our manufacturer was not able to keep up with us. [00:03:00] We were turning down a lot of business and we were unable to, in essence, really continue to be able to meet the demands of our customers. So what we ended up doing is we had a great relationship with this manufacturer that we acquired. I had traveled out here quite a bit in the past. And we were able to continue to push forward and, and really just have a great conversation with them. And they were at the phase of their business too where they didn't want to continue to scale with us. So it was really, for us, it was halfway luck, halfway preparation. And that's where the opportunity came together.

[00:03:35] Andrea: So you needed to keep growing and they didn’t want to keep up, so you decided to take the reins yourself. So what are the benefits of becoming a your own manufacturer?

[00:03:45] Sean: The biggest benefit was being able to expand our product line, having the ability to give our customers the same thing we were looking for as a new business, which was that quality control, that consistency, that short lead time. We all saw it during Covid. [00:04:00] We experienced it as consumers, as businesses, how much time it took to get products and supply chain issues, whether you're importing or domestically manufacturing. And we were able to bring that in-house, we were able to continue making that product and getting it out to our customers in a timely manner. And so it got us through Covid and it taught us a lot of lessons. And that's really the meat and potatoes of how it benefited us as a business. I don't know if we'd be here today if we were to rely on our other manufacturer vendors that we've partnered with, because their lead times just were extended, we had no control over their supply chains. Whereas we have control over our supply chains. We can focus on the sustainability of our product, the fact that, it is made here in America, that we are 100% sourcing here on American soil for everything we make. And keeping that going all the way through.

[00:04:55] Andrea: What are some of the best practices you could suggest to early-stage business owners on how to manage inventory, [00:05:00] especially since you mentioned that this was one of your pain points in the beginning?

[00:05:05] Sean: It's software, it's taking advantage of the technology that's out there. And using software integrations, I am absolutely appalled at how many manufacturers today are still using PDF documents or only tracking their inventory on a monthly basis. We are tracking everything through software. We've applied all those best practices that we had, that helped us with online retail. And we applied that all directly to our manufacturing. I could tell you exactly how much down to the cone, how many pounds of yarn we have, and just about everybody we've partnered with. They don't do that. And I think there's a lot of catching up to do, for a lot of manufacturers, but use inventory management software tools and take advantage of 'em to their fullest.

We're using Amazon FBA for a good portion of our business for the smaller items that we're fulfilling, and Amazon has a lot of tools to help track inventory. [00:06:00] There's a lot of API integrations and a lot of different software companies. We've gone through quite a few of them. If you wanna maintain a 30 day or 60–90-day supply of inventory, how much we need to have, which that segues into us looking at every single level from our partners, our vendors, where their business is at for our suppliers, for the raw goods that we're bringing in, and their best practices for how much we would need. So say my minimum order quantity is 2000 pounds of raw goods to bring in to manufacture our products. I can run a trajectory of how long based on our daily or weekly turn rate. How much we need to actually have on hand to, to be able to run that. So those are just some high-level ones, but I, I believe we looked the other day, we probably have over 60 different software integrations at different levels of the business.

[00:06:55] Andrea: Ok, so, leveraging software integrations to keep up. [00:07:00] And you also mentioned that quality control was another issue that came up. How did you tackle that?

[00:07:05] Sean: The way we're manufacturing, I mean, we have machines that are 125 years old, and yeah, new machines, new technology, robotics, AI, it'll get your hands off. I mean, I can tell you a lot of the stuff that comes in a human hand hasn't touched, and yes, that saves you a lot of time and money, but if there's a problem, that problem is at scale. So the products that, that we're manufacturing, you have four or five hands on that all the way through. We don't have the same quality control issues because anybody can stop the production line at any time and say, we've got a problem and we can stop it immediately before it becomes a bigger problem. And, so no, we don't have the quality control issues. We also are getting feedback. We're asking for feedback from our customers every single acquisition, every single time we have an interaction with a customer, we're asking for their feedback and collecting that feedback just like Amazon is doing with reviews, we're doing the same thing [00:08:00] across the board on different marketplaces on our website and saying, how are we doing? And we can figure out really quickly if there's a problem and how to fix it.

[00:08:10] Host: That was Sean Brownlee, the CEO of Ravenox. He talked about manufacturing and what you can do to stay on top of your inventory and supply chain. As always, here are some quick key takeaways from this episode:

• One. There's a lot of benefits that come with manufacturing your own product. You can expand your product line, be more consistent and have a lot more control over the quality. So, if you feel like the manufacturer you're currently working with is hindering your workflow, then maybe getting your own manufacturer is the next step to continue growing your business.
• Two. Take advantage of all the software out there to manage your inventory. There are a lot of tools out there for this. Sean also talked about using Fulfillment by Amazon. To learn more check out our show notes. Whatever you decide to use, make sure to keep it up to date!
• [00:09:00] Three. Quality control is super important. When you’re a small business and even if you manufacture your own product, it sounds like nothing beats having at least a couple of human hands touching and looking at the product before it’s out the door and in customer hands. This reminds me of what Chevalo and Monique from Charleston Gourmet Burger talked about in Season Two where we dedicated a full episode to learning about the dos and don’ts of partnering with the right manufacturer. They like to open random boxes of their sauces and testing them to make sure everything is meeting their quality standards.

That's it for this episode of This is Small Business Minisodes, brought to you by Amazon. If you liked what you heard, make sure to subscribe and tell your friends about us by sending them a link to this episode. And we would love to know what you think, so please please please leave us a review on Apple Podcasts. It's easier to do it through your phone. Or send us an email at thisissmallbusiness@amazon.com with your thoughts.

Until next time – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening!

[00:10:00] CREDITS: This is Small Business is brought to you by Amazon, with technical and story production by JAR Audio. [00:10:10]