Jeremy Weisz 18:58
Talk about, I believe you have you correct me if I’m wrong for my research exclusivity with them? Yes. I’m talking about how you actually, because it sounds great, right. But you got specifically talk about that relationship and how, because they could just easily go listen, we need to diversify just as much you’re not diversifying. They’re not also, how did you come to that term with the manufacturer?
Sam Moses 19:32
So sure, so when we first started that we had no exclusivity, and they were doing jobs for other people as they should be, as you know, they were surviving doing jobs for other people. That was their business. As our volume started to pick up, and the business started to really grow. We noticed that so they wrote in a 16-hour schedule. China runs on a 24, right, three ships of eight versus two ships of eight. And again, we have 16 machines, each machine makes about 10 socks that hour. Okay, so Have you got you got a machine making 10 socks an hour, that’s 160 socks a day, times 60. And then we noticed that our volumes were so high that we had to go to a 24-hour schedule. So they had to bring in another shift. And they had to buy more machines.
And I guess we got exclusivity, because there was just no choice for them to be able to produce them at the quantities that were producing at this point. They just needed all of the machines, and there’s nothing better for a sock factory. Like any business really, to have all of their machines running, right. So it’s kind of like, hey, guys, you want the business, we love working with you, we’re getting bigger. So either keep doing the other business and keep buying more machines for us, or just give us all the machines. So they actually just started turning away business from other people, just we are filling up their machine 60 machines 24 hours a day. And the bulk of a good amount of that really high volume is in October, November, December when the volumes just get out of control. And now we’re going through the process of buying more sock machines taking more space in Italy. So the growth is definitely there. But what I’m really proud about and I think I’ve said this earlier, is that we’re growing, but we’re also keeping the quality and the client experience the same.
Because I feel like it a lot of businesses that I’ve had this in my past careers, and then something has to give and the quality goes down and the experience for the client goes down. I still remember the first relationships, the first 10 people who bought from me, and how special that was for me and that because we really made their experience really exciting. So I’m like, How can I keep those that the same for 300 clients a month, so it’s not easy, obviously. But we got to kind of try to do that. Because whatever client buys from us, and we have 100 orders or one order, it shouldn’t be that they get the same high-quality experience, it’s not fair that if you have a lot of volume, then the quality goes down. And that’s not the way to get to a lot of volume. So it’s kind of like a I mean, you notice in your business, you kind of have to balance that, you know.
Jeremy Weisz 22:11
It always wasn’t that easy. Talk about some of the challenges with manufacturing, because you at one point were also heavily in China. So what were some of the challenges you experienced in the manufacturing piece.
Sam Moses 22:25
So when we first started, we started in China. And that’s just where everybody starts. I think the timelines are just so slow. The Chinese New Year backlog is very stressful. The shipping expenses from China are tremendous. The duties, the taxes, it’s just a hard market to ship in, you’re a small fish in a big pond, right? Like, no matter how big you get, there’s going to be much, much bigger players. And somehow, everybody’s just bigger than you. So there’s no such thing as a rush. Like, you can’t say, hey, factory, instead of shipping in 45 days, can you just do me a favor and shipping in 35. They’re not, that’s not really the way that they’re going to do it. And they’re not really set up for these custom runs of two 300 pairs, 100 pairs, 1000 pairs, they’re really well set up. And they’re really good. I mean, there’s nobody better at, hey, I got 50,000 pairs, and I need you to put in a boat.
And you got to do that in 35, 40 days, they’re the best, nobody can top that I mean, they’re so good. And the specs are good. But when you give them to and appears here, then you change the design and you get them to win in pairs. And you want a very specific type of packaging. And you need it to airship on Monday, not Tuesday, okay, like when you’re dealing with days like that, okay, they’re not really the best, because just communication’s not as good. So we had a lot of problems like we did. And we had to rewrite a lot of things. And we realized, look, that’s not for us. Like, we need a partner who’s smaller and more like, you know, communicative. Like we can get them on the phone at any time.
And somebody who just cares about a 200-pair order the same way a China factory would care about a 20,000-pair order, like we just need that. And we built a nice business out of that. It’s kind of like the war dog scene. War dogs the movie. I don’t know if you’ve ever seen it, but they’re like, we’re going after the crumbs, you know? And then there are people going after the pie, right? So in a way, even though we’re serving big companies in the sock world, it’s still kind of the crumbs because they’re smaller niche boutique bespoke orders. It’s like making one custom suit versus making a run of suits if you’re Hugo Boss, it’s very different.
Jeremy Weisz 24:37
I want to ask kind of like an in-the-weeds question for a second, Sam because I do want to get to the origin story of the pain that you experienced that caused you to go into the sock business because it seems kind of random but when you know your story, it’s not so random. But before we get there, I just in the question I have, there’s a page here and your site is cost them socks boxes, right? So people can order a company can order whatever 500 pairs and like, distribute them at a trade show, or however they’re gonna distribute them. It seems like they can also do custom boxes, which holds, let’s say, two to five pairs, do they receive the boxes? Let’s say they order, 500 pairs, and they have 250 of these custom boxes with two pairs in each. Do you ever ship those out? If they give you a customer list? Or do you ship them to a fulfillment center or to the company and they ship them out separately.
Sam Moses 25:40
So there’s two options. One is that we would pack the boxes and send it to them to ship out if that’s what they wanted. Or option number two is they give us their list, and then we package it all up and ship it individually on their behalf white label to them. So it’s a full gifting option. We even have an API where their lists can connect into our Salesforce. So it’s very easy for them to transmit all that information. So like, for example, we did a job for a real estate agent who’s a very active real estate agent. And every time we sold a house, we had the box in our fulfillment center, and then the box went out and it had two socks in it. And it’s kind of like, oh, thank you for buying, you know, we do it for Title agencies, that’s a popular one on closing title agencies have legalities around how much it’s allowed to be. So I think their max is like $20. So they would make a box where everything is worth $20.
And then they would send it out to the person who closed it as a gift. Obviously companies tech companies who have large client list SaaS companies, they have these kind of guys, but it’s a good gift, you know? And how do I know it’s a good gift? Because we do it ourselves? We send the sock boxes to our clients, so everybody says how do you know it’s a good gift, I say, because when I send it to my client, they call me back and tell me how much they loved it. And I’m always amazed when I need somebody’s address. I email them I say, “hey, I got a quick gift for you to send out. Can you send me your address?” It’s amazing to see how fast they reply to that email. Right? So it’s actually like people are excited to get gifts, people are excited to get mail, you know, and I’m talking about physical mail. So it’s kind of like it fits in well, gifting is kind of like, I’m sure you know a lot about this because you did that podcast with that gifting specialist. But there’s a whole psychology to it.
Like people love receiving things. And when they receive things, it’s not that they necessarily have to feel indebted to you, but they want to work with you and they want to be around you because you thought of them and you gave them something and that’s no different than my four-year-old son when I come home, and I give him a gift. It actually might be no different. But he psychologically feels gratitude for me giving him the gift now him It happens to last not a long time. Okay, because he’s four. But I think by adults, I think it lasts longer. And I think it builds relationships. You can’t overdo it. It’s like, you know, you can’t bring your wife flowers every day kind of overdubs it but when you send the gifts, I think she’d still be fine with that. Yeah, somehow they should still be fine. A little weird, okay. But I’m like.
Jeremy Weisz 28:11
What did you do wrong Sam, tell me what you did wrong?
Sam Moses 28:13
Yeah, this is something that I’m doing wrong. Yeah. No matter what, there’s guilt in that. But when you give the gifts a once a year, twice a year, three times here, whatever it is to different people, you’re going to see responses. And you’re going to, I guess, you probably know this in any business, what do you want, you want to engage your clients, you want to have them engaged with you. So this is a way to engage.
Jeremy Weisz 28:35
What are some interesting use cases? Because you mentioned we talked about tech companies, SaaS companies, TV shows I didn’t even think of until you mentioned it, obviously big companies, real estate agents, you mentioned dentists, what are some of the other interesting types of businesses that you’ve seen use this?
Sam Moses 28:55
Yeah, so we’ve seen a lot of sales meetings, let’s just say you put you bring in all your CEO, everybody’s remote now. So let’s say you have 100-200 people remote, so they put everybody together for a sales meeting. So you have 200 people think about it, you have 20 people together, you flew everybody in, you put them in a hotel, you’ve given them food, okay? I mean, the tremendous investment required for this, okay? So if we can make them a nice $25, beautiful box of socks branded to the company with a nice postcard that says, we appreciate you and we’ll look, we’re glad you’re here. And when they get there, they give them the box.
That’s an amazing use case, like, the $20 becomes more of a talking point than all the food you’re giving them like it’s unbelievable, because the food in a way is taken for granted. Of course, you flew me and of course you have to pay for us. But of course you have to beat us, okay? But the box is something extra. And anytime you do something extra, there’s going to be feedback on that. So that’s a really good use case. Now the one like we said where we stopped the boxes are the socks, and they send them out as gifts. And that can be fully scalable. Like there are people with 1000s and 1000s of clients, they don’t want to warehouse this stuff. And even if it’s one pair, we can ship out one pair of socks USPS, it goes out, we have another big one with Chase Bank, they gave to all their high net-worth private investor private net–worth investors.
So it does actually be it can be used as a gift for high net-worth clients as well. Because again, made it a really high perceived value, you walk into a store, the socks are 25 $30, we sell them custom in big runs for 10 to 12, eight to 12. So you’re getting a lot of value there, so yeah, so that those are kind of the use cases. And then there’s also not for-profits use it for fundraising. Like that’s a big one. Also, where the Heart and Stroke Foundation will do a fundraiser will sell them the socks at a not-for-profit rate. And then they’ll go out and sell it to their base donor base and everything for like, $15 we give it to them for six, seven, and all of a sudden they’re making some money off of the socks, and they’re getting their brand out there better.
Jeremy Weisz 31:05
I love it. I’m gonna have to share this. There’s so many interesting use cases I had on Cabana, who is a wrestler? And he’s got a large audience and he has different swag T-shirts, figurines. I don’t know if he had socks off the I’ll have to let him know he’s got another thing in his swag up his sleeve? How do you stay disciplined? Because I’m sure people come to us. And they’re like, hey, you’re already doing our socks? Can you just do it 500 t-shirts or 1,000 t-shirts or this or that? Talk about how do you say discipline? And not? Again, you probably get a lot of requests, I imagine, right?
Sam Moses 31:51
Yeah, we get a lot like, if somebody wants to do 1,000 t-shirts or vests and this and that. And the bottom line is I think we respect the fact of how hard it is to do everything right and while and there is a T-shirt guy out there who knows as much as me and socks. So I’m kind of like, give him the business because I respect the fact that it’s hard to do it, it sounds easy, right? But then you get into weights of the fabric and printing different types and all this stuff. And again, sock has a whole world in that as well. So it’s better for us to just give it to him. Because we’re just gonna, we kind of feel internally that if we do t-shirts, there might be headaches, and those headaches take away from our core business. And at the end of the year, if we added up all of those requests, for all those extra products, probably doing an extra 10 or 15, sock projects would just make up for it anyway.
So why don’t just focus on getting those extra, 15 to 20 projects, or whatever it is. But sometimes it’s hard. So what we do is we have good partners where we can hand it off to like, for example, if you need notebooks, like we’ll give you the Denic. Denic is the top they’re like the US of socks, they’re really good at notebooks, and let them do it. Like why should we try to figure out how to do notebooks? Why don’t we just give it to Denic. And then it actually comes back to help us a lot because they’re like, oh, hey, Sam, they actually took care of us really well. And we love that. And by the way, I have another sock order for you, so versus like…
Jeremy Weisz 33:15
And they probably have clients who want who could get socks also, right? It’s not like exclusive, you only get one thing, usually people are getting T-shirts, notebook socks.
Sam Moses 33:25
Yeah, and then Denic will pass back to us when the guy needs socks, but it’s kind of like, I’ve had some awkward situations when I wasn’t doing this because I was so revenue-focused. So I would do the notebook or something. And then there’s like, hey, you know, you really did great with socks. But the notebook wasn’t as good, we’ll just use you for socks.
So it just like leaves a bad taste like at the end, they didn’t pay for that, why did they not get a great product. And that’s just because I don’t think about notebooks, even for one minute of the day, where I think about socks every bit of the day. So I just want to focus on what I do, it is a hard thing to do. And I went to business school and when talking to some of my business school colleagues that I went to business school with, and I noticed that they struggle with the same thing because your nature is to kind of like sell, right?
Jeremy Weisz 34:10
It’s also, you want to help the customer, right? So it’s like, they’re asking for the staff, you want to help them out. But like you said, you’re better helping them out just sending them to someone who specializes.
Sam Moses 34:25
Yeah, also, we kind of are just really passionate about what we do. And then it’s hard for us to get into notebooks or pens and stuff like that. So I think we just become better at what we do kind of like I think you’re sort of super, super focused on what you do when you do it really well.
Jeremy Weisz 34:43
So, talk a little about the pain of why you started this company and it started out of retail, which is if anyone’s been in retail, it can be painful. It’s not for the faint of heart.
Sam Moses 34:57
It’s a weird thing about retail. I don’t know if you feel it But it’s like, it’s really painful. And it’s the hardest business. And for some reason, everybody thinks they can do it. And for some reason, there’s like, you still get an itch for it later on, which is weird. Like, I don’t know, if you have that, maybe not okay. But for me, I’m always like, and my number two in the company, she’s great. She’s the head of design. She’s always like, she’s actually started as the manager in my store. And then she branched out to head of design, because she had a design background, she went to art school, which I still say, besides meeting, my wife might be the most unbelievable thing that happened to me that the number, the person who headed up my whole design team, after a flight was the girl running my store, like, maybe, because it has nothing to do with each other, so, but we had trust, and we really, we really did something special there.
But, I think we were in retail for 10 years selling very high-end neckwear, and menswear in downtown Toronto, and like the financial district, think Wall Street of Canada, you know, and, you know, I would come home, and I’d be like, oh, Dina and my wife, we had such a good day in the store. And she’s like, oh, great, you know, you made some money, you guys, you know, it’s great. And I’m like, I don’t know if I made money, because like, it just kind of goes back into the stone. Like, it’s just like retail stuff, but just got to keep moving it in. And there’s rent to the staff. And it’s very high ratios, and the profit is very slim, unless you’re doing tremendous volume. And this business is a lot cleaner, where we’re hiring, we have designers, we have a serious payroll, but the companies are b2b that pay up front, and then we only produce things when a sale is made. So we don’t buy and then try to sell it, we sell, and then produce it. Right. So and you can appreciate that. So I think that that flip has been great.
Also, what I noticed, like we put a lot of work into our website. And to build out a store, the store that I had built with like a $300,000 store, in a little 800-square foot store 300,000, custom millwork, this and that, and I get more compliments on my website, which cost nowhere near that, okay, that I do on a $300,000 store. So it’s a tough business, because you’re like, you can’t impress people, it’s very hard to sell one tie to guy because he’s kind of like, it’s his own money, versus b2b where their budgets, so it’s a different conversation. And it’s nine to five, Monday to Friday, which is also very good, so for family life, it’s a good business, you know, what were the hours of the store, store hours were about nine to seven that we were in the financial district. So it was only Monday to Friday, so I never had to work weekends. But Christmas season you’re coming in. And you know, we’re coming in at 6 a.m. And we’re going until 10 p.m. And it was it.
I liked the time. I like the retail business, I enjoyed it. But there’s a difference between being in your 20s and your 40s. I think so. I don’t know if I have the energy today to open a retail store. Now I still have this dream. And again, my number two is to talk me off the ledge of opening Socrates stores and all these different markets. I still have a dream of that, because I think the Sockrates stores would do really well in the small little store, like a sock shop. But my number two is kind of like why don’t we just get into Hudson news at the airport or something like that.
Jeremy Weisz 38:13
Like a kiosk in a Nordstrom just kiosk.
Sam Moses 38:17
Yeah, like versus because there’s a lot of involves, you know, this like staffing and rent and it’s just too much involved. We’re trying to focus again, I guess what you’re saying, what I’m saying to you is, is the focus, we just got to focus on what we’re good at, and not get distracted. And then it should continue to grow over time. And we’ve seen growth over year one to year five, so we’re happy.
Jeremy Weisz 38:39
When did the light bulb hit you in the retail that I should just focus on socks.
Sam Moses 38:45
So I think it was like the second order that we got was from the Toronto Stock Exchange, kind of like the NASDAQ. And they were upstairs and they came in and there and the gentleman, the marketing director was like, I’m going to a tradeshow, can you make me 1000 of these? And I’m like, okay, and we found some freelance designer, we designed it and we did it. And I realized like, wow, like that was a pretty smooth transaction for such a big purchase the amount of time and effort it would take to bring in that kind of revenue on a retail like one sock at a time. There are one time at a time. That’s pretty serious. So I was like, why don’t we try to scale this and then, Fortune hit where we have this crazy flood in the store, which is like insane flood, which is a very sad moment because I saw my store go down.
I had what happened to something is insurance and rebuilding the store. So I was like, why don’t we just I said Becky, the number two I said let’s just focus on this. We got a website up we started doing digital marketing. And then that’s it. We just went into it. You know, what happened with the flood. So we’re downstairs underground, and the top person above us is like this bar. It was like a brewery and they just flooded right into us and my store fixtures are wooden millwork so it’s just gone. Like the whole store one day was gone and large insurance claim we rebuilt it even more beautiful. And then again, a year later, same thing happened. Wow, that was the end.
Jeremy Weisz 40:13
So like, the inventory and everything in the store too, I imagine.
Sam Moses 40:18
Full collapse. Yeah, full collapse. And then we got paid out in the inventory, they rebuilt the store for us. And then the second time it happened, we were like, This is not work. We can’t live like this anymore. And at that time, by the time the second time happened, we were already doing so well online. With the custom business. We were just like, I think this is a sign from above, literally from above like the water.
Jeremy Weisz 40:46
Someone up there and saying get out of this business. Like you didn’t get the hint on the first time around. Like we got to do this again to Sam, he’s like it’s a hit.
Sam Moses 40:56
Well, it’s almost like you’re forced out because no insurance guy is going to insure you now, so you’re just out, you know, so we were out and we were happy about it. And now we work as a team together. But it’s more like Zoom calls. And we have an office in Boca Raton, which I have a few workers in here. It’s different. It’s different, but I love the b2b. I think you’re in b2b as well. And I just love the b2b where we talk everybody talks like professionals, and it’s just b2b. And they have set budgets. I love that the end of the year that they have to use money, otherwise they lose their budget, that’s such a foreign concept to me and reach out like imagine, like I have to use this money, or we don’t get it back. It’s like, okay, so there’s a lot of benefits. Listen, there’s a lot of hard things also, but there’s a lot of benefits.
Jeremy Weisz 41:44
First of all, I have one last question, Sam, thanks for sharing your journey with Sockrates. I want to point people over and check out Sockratescustom.com. That’s sockratescustom.com. My last question, Sam is just mentors, people in the industry mentors that have helped.
Sam Moses 42:06
Yep. So when I started my retail store, there was a gentleman from Washington and he had 150 Benetton store. So he was really my mentor and how to build out stores. And he’s kind of like a retail guy. So I realized early on, you have to have somebody that you can go to have a lot of expertise. So I have professional mentors like him, his name is Iraklis Calabasas, I’m actually going to send him this episode afterwards, he made a huge difference in my life. He just was like, I was a young kid. I was like, 26, 27, when I opened the store, and I didn’t know anything, I had worked in consulting, and I had worked in research, market research, and I had a lot of work experience, but I didn’t really know how to structure and build teams out and hire employees.
That’s kind of like a different animal, as you know. And then so he was really influential in my life. So actually, that’s a good idea. I’m gonna send it to him, that he really taught me a lot. He taught me quite a bit. And then obviously, my parents have been big to me, my father is a retired professional, and I go to him for advice all the time. He’s kind of like he works for the government, and that he works for Mount Sinai Hospital in Toronto. So he’s kind of like a county and tight but very successful and very hard working. I always have respect for people that came to a country with nothing and built their way up, because I can’t even imagine like I so much was given to me. So I had a starting point that was much higher. So for my father to come to a country with nothing to do what he did.
To me that’s like, it’s kind of like a sign of true success in a way. So that’s there. And then in the sock business, there’s this gentleman, I’m gonna send him the podcast as well. The name is Yoni Ashraf, and we went to business school together. And we actually went to our first consulting job together, I still remember walking around Toronto downtown with him. And we were working in consulting, like 80 hours a week, or 90 hours a week, flying all over the world. And we were kind of like this, maybe there’s something different for us, maybe we can make a different impact. Maybe we could have employees one day, and he went on to open up his own company, and he does very well. And we talk a lot and we talked about those days of like, remember when we were 22 walking around downtown and now and, and I bounce a lot of ideas off of him. And you need that because every idea that comes to my head if I did, I guess, I don’t know. I don’t know if I’d be very rich or very poor. I don’t know how that works like this. So many ideas that come to my head that I need filtering out. So I go to him and I trust him. I also trust my wife quite a bit. I think she’s a little tired of hearing about it, because it’s been 14 years and I have a new idea every day, so and then the number two in the company, Becky, she’s my VP of design, I trust her as well.
And then actually conversations like this like yourself you have so much experience and so much people that you’ve met and like even before when we were speaking like Just the amount of knowledge that you have the little tidbits that you gave me earlier on, it just helps me because I’m like, as you know, as a business owner, all you think about is your business, and sometimes my 10-year-old complains a little bit because he’s like, he wants to talk about his life, and I’m still talking, I convert his life into a business like, so he gets a little upset with that, you know, he’s like, Daddy, I don’t really care about all that stuff. I just want to talk about like, my friends and football and like, I’m like, oh, right. We’re not trying to monetize anything right now. So I kind of feel like my son, although it’s a good thing, because it gets to think as a business person, but it’s a bad thing, because he just doesn’t want to think like that half the time. Well, 98% of the time. So I guess I tried to go through life and I listened to people I really listen. And it’s really important. Everybody has something to give.
So I try to do that. And I mean, even like the UPS driver who delivers all my packages, who, I’ll be honest, that’s a lot of packages. Okay? We just talk and he has some good insights on what he seen out there. And you would think, okay, the UPS driver might not know them, but he actually does like he actually has his own approach to things which I like so I try to take advice wherever I can get it. And I feel like you’re probably the same like you because way that we were talking I feel like you’re also trying to be like a spider you’re like trying to take as much as you can get.
Jeremy Weisz 42:22
Love it. Sam. I just want to be the first one to thank you everyone. Check out sockratescustom.com to learn more, and when it’s appropriate order some socks look amazing. So thanks, everyone. Thanks, Sam.
Sam Moses 46:32
Thanks for having us.
