On today’s episode, Kunle is joined by Kosmo Khosravi, CEO of Kosmo’s Q, an omnichannel American barbecue spices brand that started out as a passion project with one spice. Now, it sells 30 different products across the UK, Switzerland, and the US.
It’s time to pull out the cold drinks and enjoy a get-together with some barbecue. The burning charcoal, the savory fragrance of the marinade and the sizzling sound of cooking meat. It brings back memories and pulls us out from the heaviness of the world. It’s the perfect cure from a long lockdown period.
BBQ isn’t complete without the perfectly blended spices that bring out the meat’s optimum flavor. Don’t struggle to find the perfect recipe in some cooking book. Instead, head on over to Kosmo’s Q. Kosmo’s Q helps barbecue fanatics and beginners make the most badass BBQ on the planet by giving you 30 tried and tested spices to complement the meat of your choice.
In this episode, Kunle and Kosmo talk about how he grew his brand from a seed investment value of $500 to over $500 million in gross margin value. You will get to hear about how customer centricity has always driven his brand. This is a great episode for business owners.
Here is a summary of some of the most important points made:
On today’s interview, Kunle and Kosmo discuss:
Q: Are you a morning person?
Q: What is your morning routine like?
A: I get up at 5:00 AM. I go to the gym to work out. I do my quiet time and meditation and go to work.
Q: What are things that you can’t live without?
A: Cold beer and barbecue
Q: What book are you currently reading or listening to?
A: Profit First
Q: What’s been your best mistake to date? A setback that’s given you the biggest feedback.
A: My dad has always told me this. If you don’t want to listen, life will teach you everything you need to know.
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In this episode, we have a bootstrapped entrepreneur who’s managed to build a barbecue sauce brand from a seed investment of $500 to over $50 million in gross margin value. It’s a great episode you do not want to miss.
Welcome to the 2X eCommerce podcast show. The 2X eCommerce podcast is dedicated to commerce insights for retail and eCommerce teams. Each week on this podcast, a commerce expert, a founder of a digital native consumer brand, or a representative from a best-in-class SaaS platform comes on here. I give them a tight remit to give you ideas you could test right away on your brand so you can improve commerce growth metrics such as your conversions, average order value, repeat customers, audience size, and ultimately, your Gross Merchant Value or sales. We are essentially here to help you sell more through stories and inspirational ones at that.
What you’re about to read is an interview I had with an entrepreneur called Kosmo Khosravi. He is very inspirational. He started his career in hazardous disposal. He was working for the man. He was working for an organization. He was essentially clearing hazardous materials from site to site. That was his day job, and then he became a parent and learned the fine art of barbecuing. He has a talent for putting together tastes and recipes in his head and figuring out what the tastes would be ahead of putting the ingredients for a recipe together.
His brand Kosmo’s Q is a barbecue sauce brand. They do barbecue sauces, dips, powders, and injections. Over time, he had built a community. Kosmo’s Q is a very content-driven brand where they have over 300,000 subscribers on YouTube. They’re on every channel you can think of, whether it’s Instagram, TikTok, Snapchat, whatever. That brings a lot of attention to his core brand. They’re doing well over $10 million a year in revenue.
They’re an omnichannel brand. We embrace channel agnosticism. We’re not necessarily maximalist to one channel, whether it’s DTC or Amazon marketplaces. We’re more omnichannel. He’s been able to align with his three core values I resonated with, which are family, finance, and freedom. It’s a very interesting interview. I have developed a methodology for growth, which I’ll talk about in subsequent interviews. I use that methodology to quiz Kosmo and I got a lot out of him.
It’s an hour-long conversation from an entrepreneur who tells his story and then we get into the nitty-gritty of how he’s built it to where it is today and how he manages it day-to-day and keeps its core essence. He has projections of growing revenue by 40% to 50% despite inflation, which doesn’t seem to be hurting him, which I find very fascinating. He’s a very down-to-earth and principled entrepreneur who wants to do better, who wants to always challenge himself, who’s a leader, and who has a terrific story. Without further ado, get ready, get set, and get to know Kosmo from Kosmo’s Q barbecue. Cheers.
Kosmo, welcome to the 2X eCommerce podcast.
I’m so glad to be here. Thank you, Kunle, for having me all the way from Oklahoma.
The internet is phenomenal. It brings the world together. I’m here in Oxford, you’re in Oklahoma. We’re making this happen. The audiences were in over 94 countries in the world, which was phenomenal, with the USA being the biggest base for us. Let’s talk about you. I’ve been looking forward to this interview. Yours is a phenomenal story from $500 in seed money to $50 million in accumulated revenue. You guys are over $10 million brand. Besides the money, barbecuing is a passion of yours, right?
Absolutely. One thing that I’ve learned is for some reason, for thousands of years, there’s something about when a human creates a fire, how it brings people together no matter what the situation is. Whether it be for shelter, for food, or for fellowship in general, when you get to start a fire, it seems like everything comes down, all the labels come off, and you get to be yourself with your people.
That is so right. I haven’t thought about it that way. If I think about some of my deepest conversations, they’ve been by fireplaces or by fire pits with my best of mates, sitting, relaxing, or by the barbecue. It’s super interesting. You founded Kosmo’s. It’s an omnichannel brand in the sense that you’re in retail distribution, you’re direct-to-consumer, and you’re a marketplace brand. When did you found Kosmo’s? What did you do prior to Kosmo’s?
Prior to Kosmo’s, I was in the hazardous waste industry. I would drive around our little state and I would pick up hazardous waste, and then we would dispose of it for companies and corporations. It was definitely a career that helps support my family but it wasn’t my calling. A lot of people like me, the entrepreneurial type, have this calling about you that you can’t explain. You don’t know what it is. I would always try new things continuously and people would say, “That’s Kosmo. He doesn’t finish things. He doesn’t do things.” I was searching for something that was in front of me the whole time.
I remember driving home one day. I crossed the hill and I could hear it. There was a voice in my truck that said, “What do you value? You asked so many questions but you don’t even have any values.” I’ll never forget, within about ten minutes, I sat at the house, I got on my computer, and I created an entire list of things that somebody could value. There were about 200 of them. I said, “I’m going to circle 50.” When I got done with 50, in my head, I was like, “I’ll sleep on it, and then tomorrow…” I was like, “Nope. Out of these 50, give me 25. Out of these 25, give me 10. Out of these 10, give me 5. Out of these 5, you tell me the 3 things that you value the most.”
The things I came up with were family, finances, and freedom. People hear about finances a lot and they go, “You’re money-hungry.” It couldn’t be further from the truth. For me, I needed financial stability to achieve freedom with the family because that to me is a life of happiness and a life that I want to live. I woke up the next day and I was an absolutely different person. I made six figures at the time. Good money. I had Kosmo’s and I’ve been doing Kosmo’s at that time for a number of years.
I remember going to my wife and I told her, “I’m going to quit my job.” I was afraid she was going to swing on me or something. She looked at me and she goes, “It’s about time you do.” The scariest moment of my life was, “I’m finally taking the leap.” I heard this from a Navy SEAL years ago. He asked me, “Do you know what happens when you die? Right before you’re dead, you always hear that your life flashes before your eyes. Let me tell you what happens. All your regrets flash before your eyes.” The next day, I was driving to work and I was like, “If I’m lying on my deathbed, what would I say? What would I verbalize?” That came out of my mouth. I would be absolutely sickened with myself if I didn’t at least try.
I resonate with the core values, family first, I’m a family man, finances, and freedom and happiness. You did say that Kosmo’s was a side gig at the time. How was Kosmo’s ideated? What prompted you to start putting sauces in bottles to come up with the name? What timestamps are we looking at here in terms of when you ideated this turning point?
The ideation part came in late 2004. Just a backup to the early part of that year, it was springtime. We had a young family. I was like, “There’s no more doing all the single things. I’ve got to start living like a family man.” What do family men do? They barbecue and grill. I went down to Walmart and I bought a $50 smoker. I bought chicken, chuck roast, and some sausage. I was like, “On Saturday, I’m becoming a man. I’m going to barbecue. I’m going to barbecue for my family. We’re going to sit down and we’ll go eat.” It’s the best day in the world.
Kunle, I can’t tell you how bad this food was. It was so horrible. I’ll never forget, we were sitting at the table and everybody had a plate of barbecue. I was like, “How is it?” They’re all looking at me and they’re like, “It’s good.” I took a bite and I was like, “This is the worst food I’ve ever ate in my life.” I told my wife, “We can’t eat this. This is inedible.” I’ve never eaten tree bark but I’m assuming if I was to eat tree bark that this is what it would taste like. I told them, “We have to throw it away,” so we ended up throwing it away.
I’ll never forget the timestamp in my life when I realized it was my rock bottom as a man. When my wife was holding the dumpster open as I was throwing the food away, there was something inside of me that I said, “This will never happen again.” That’s where it started. I said, “I don’t care if I’m only known as the hamburger and hotdog guy. This will never happen again.” I started getting serious. This is before the internet. This is before YouTube. You couldn’t go someplace and find a recipe. You had to find a cookbook somewhere and use the hope strategy. I hope I read everything right, I hope I cooked it right, and I hope it tastes good.
That’s where I started cutting my teeth. I started day and night staying up all night long. I was buying the sauces and the rubs at the local grocery store and I was like, “This is okay but I wanted to do this or that.” I started experimenting with my own rubs and I was like, “If I change out the paprika to a smoked paprika and instead of using a table salt, I use a Coarse Kosher Salt, I can make these flavors do and act exactly how I want them to.” I quickly came to the realization that the stuff that’s in the grocery store is not for me so much as it is for-profit because they all tasted the same and they all posted the same results. That’s when I was like, “I’ll start making my own.”
What’s your first flavor for the rubs? At the moment, you have quite a collection. You even cater to paleo and keto, the clean eating space, so it’s quite diverse. You have the barbecue rub bundles. You have on the classic rubs. What were your first rub’s flavors? Who did you test? Who are your guinea pigs?
My first one was my Cow Cover and my Dirty Bird. Those were the first ones I made. That’s the name of them now. I tested those on family and friends, and then I quickly found out that there’s such a thing called a barbecue competition. Who knew? You sign up and you meet in a parking lot for the weekend and set up. I thought, “I’ll go. I’m down.” I went to my very first competition barbecue event and I ended up winning the ribs division. I was absolutely hooked. From there, it started growing and getting crazy.
That’s impressive. That feedback from the competition gave you that confidence. “This looks like there’s something going on here.” Did you start packaging it and selling it in the competitions? What was your go-to-market strategy? How did you come up with the brand? Kosmo’s is your name and the brand name is Kosmo’s Q. How did you come up with the name? What did packaging and your first few customers look like?
I never had any intention of starting a company. I remember at that time, there was another company selling barbecue injection. I was trying to use it but it didn’t taste right. It had this weird flavor to it. I remember seeing him at a competition and I asked him, “I’m using this injection and I can’t get it to taste right. Is there any way you can help me?” He was standing in his trailer and he looked at me and he said, “Yeah, you can read the instructions,” and shut the door on my face. I was so pissed off that somebody would treat a customer this way. I know the guy now. He’s a great man and a great individual. He’s got a great company. At the time, he had something going on that I was unaware of.
Nevertheless, I went home and I said, “I’ll make my own injection. When I make my own injection, I’m going to start a company and I’m going to start selling it.” It started out of frustration. I went and made my injections. This was before eCommerce was a thing. I built a website. You could roughly buy off the website. You could turn in an order and it would send me an email, and then I would PayPal you a link to pay for it, and then I would ship your stuff to you. I was like, “This doesn’t seem efficient at all.” I started learning my HTML coding through PayPal and placing buttons on the actual website to where they could buy the products. That’s how it all got started. It got started because I was pissed off.
A lot of things start from all sorts of emotions. You want to fight everything and make a point with actions. Let’s fast forward a few years after you’ve gone full-time with Kosmo’s Q. When did things start getting serious? When did you hire? When did you say, “I need help. I need to make my first hire.”
My very first hire was a friend of mine’s kid. At the time, I was working two jobs. I would work all day, usually ten hours a day, and then I would come home and package orders for Kosmo’s at night. My wife would help me. It started in our linen closet. It was in our hallway in a closet and I would pack orders out of there. It grew to where I had it in my garage, and then I had to build a shop. Next thing we know, we got on Amazon. I was like, “I’m going to need some help.”
I hired one of my good friend’s sons and he would come over after school. I showed him how to ship orders and all that. That’s when I was like, “This is work.” Then I had to hire another kid, and then I had to hire another kid. We looked up one day and were like, “We’re in 2,000 square feet and it’s stacked to the ceiling. We need to get a warehouse.”
We found a warehouse, then it started getting serious. By this time, I had already quit my job and I was working full-time at Kosmo’s. We got into this warehouse. We had about 3,000 square feet of warehouse space, then we had to rent another 2,000 square feet behind us, so we’re at about 5,000 square feet. Very quickly, we go, “This isn’t going to work.” We had to rent a 12,000-square-foot facility. That’s how it all started ramping up.
What’s your setup now from a warehouse standpoint?
From a warehouse standpoint, we’re still at 12,000 square feet. The thing that we did that helped us is we are very big on data here. I’ve heard this said, “Trust in God. All else, bring data.” We started getting serious about our inventory and how we could control our inventory and our logistics to better suit our needs.
Since we’ve been in this, we’ve doubled again in size and we’re still operating out of the same warehouse but we’re running in time inventory. We are also using our manufacturing facilities as direct shipping points. Rather than bringing the products here and shipping them out, we will place specific orders at the facility and ship directly from there, which has allowed us the convenience of being able to grow and still retain the same square footage.
For agility. You’re fulfilling direct from the kitchen for D2C and then for wholesale, you’re probably keeping in the warehouse right now.
Makes a lot of sense. Where did your first 1,000 customers come from? Out of curiosity, when you were in the smaller warehouses, were you using your home kitchen or did you rent a facility out to produce the rubs and the injections?
My first 1,000 customers came from a combination of my Facebook page and the competition’s that I would go and cook at every weekend or 2 or 3 times a month. That’s where they came from. There were no online ads at the time that I was aware of, as far as Google or Facebook. YouTube wasn’t even around when we got started. We bootstrapped everything through our personal Facebook page.
At the start, before you went into the bigger facilities, did you use your home kitchen or a commercial kitchen to put together the recipe?
Since day one, we have used commercial co-packers. I don’t know why. I remember asking our very first co-packer, “If I need to order one truckload of one product, can you guys produce that?” They said yes and I said, “Okay.” I would love to say that I had the vision of, “We were going to double year over year and make it to the Inc 500. We were going to do all this so I needed to know that information,” but that wasn’t it at all. I don’t even know why I asked that question. I just have like, “If my customers need something, I need to know that you are set up and geared in such a way that you can produce quantity on demand.”
My takeaway from the answer to your first question is that you’ve built a personality on Facebook and offline from the competition. You’re quite an authority both with the Facebook page and with the competitions you were winning and participating in. That’s built a community around you. You created content, you stated your opinion, and you happen to have something to sell, which was the barbecue sauce, the barbecue rubs, and the injections you’re using in the competitions. That built up that first 1,000 customer base.
I wish I could say I had it all planned out. We were doing that before it was a thing to grind day and night, become the authority, and get people to like, know, and trust you.
How has the business matured over time? I’m comparing the business from 2010 to 2020. Do you want to give a before and after or comparison? Because it’s a decade spread. You were about 5 or 6 years old in 2010. Now, in 2020, with the COVID strike, please shed some light on those dynamics.
In the beginning, we did our best to get all of our work done before noon so we could go screw off. We wanted to have fun. We need to understand that we’re here to provide our customers with the best injections, rubs, and sauces on the market. We need to do everything for them but we need to do it as efficiently as possible so we can go have fun.
Back then, I went from 1 to 3 part-time employees. Now, we have 26 team members, some part-time, some full-time, and some contracts. We have an employee handbook. We have an HR department. We have a CFO. We have a director of operations. We have a founder, president, and CEO. We have an org chart. We have daily huddles with the entire company. We have daily departmental huddles with the department. I looked up and said, “When I quit my job, I never wanted to work for another corporation again.” If I could go back and change it, I would say, “When I quit my job, I never want to work for a corporation again that doesn’t do it the way I think a corporation should do it.” Because now that’s what we’re doing.
Is your staff global? Are they all based in Oklahoma? What does your team spread look like geographically?
We have people here in Oklahoma and we have a remote team as well.
Let’s talk about customer-centricity at Kosmo’s Q. Would you say your customers are front and center in everything you do? Why and how?
Absolutely. There has to be. This is my belief. If it’s all about you, you can only run that game for so long before people start finding out. I believe that I was put on this earth to serve others. That’s what I believe in my heart of hearts. I’m here to serve our customers to give them the best products at the best price with the fastest shipping with the best customer support. That’s what I believe.
Our customer support team knows they have the responsibility and the authority to do whatever it takes to make that customer happy. They don’t have to run it up the pole. They don’t have to come to talk to me. They don’t have to talk to their supervisor. They don’t have to do any of that. If this customer spent $70 and it was absolutely destroyed, I’d say, “Give them the order for free, and then give them a gift certificate for $50. If that makes him happy, that’s awesome. If that doesn’t make them happy, find out. Ask them, ‘What can I do to make this right by you?’ Whatever they say, you go above and beyond.”
How do you collect customer data? What systems have you put in place to touch the watch-and-learn from customers?
We have a couple of different ways we collect data. The email list is one of the most powerful things you can do. If you don’t have an email list, the first thing you do tomorrow morning is to get that up and running. I need to visualize this so people can see what it is in my head. The email list is in the middle but you have streams feeding the email list, whether that’s Facebook, Instagram, TikTok, or YouTube. Those are things that give to the customers and that’s what we want to do on all of our social channels.
We want to give them information, give them education, give them knowledge, and give them the okay to go ahead and start cooking. For a lot of people, that is scary. I know it was for myself. I wish I had the information that we now give away for free every single day because I probably could have eaten that first meal. We use email, and then we use our website. We use all of our social media platforms.
We want to see the customer journey and how they interact with us so we can visualize the things we are good at and the things we’re not good at. I’ve always heard that people quit buying from you for 1 or 2 reasons, you quit selling to them or you piss them off. Customers can also quit buying from you because you quit caring as much. They got a better deal from somebody else or you pissed them off. We try to understand the customer journey and see where we can put ourselves into the gap to best fulfill the need they have at that present time.
Is your customer service reachable by phone?
Yup. We speak with them daily. We send them update emails, tracking emails, and where-their-orders-at emails. We ask them questions. Honestly, we ask them if we can call them sometimes. “Can we call you and get some feedback? You tell us.”
Have any of your recipes been crowdsourced by customers? Have customers had direct imputes into some of the product releases you’ve done or you’ve been involved in?
When you say crowdsource, do you mean funded?
Just wisdom of the crowds where customers are asking for a particular flavor for a rub or an injection and you listen.
Yes, they have. It’s so funny, sometimes when we have one that’s not performing very well and we pull it off the market, everybody’s like, “What are you doing? You’ve got to bring that back.” We talk about ways we can bring it back. We also have a private community, which is our private Facebook group that you pay to get into and it’s a one-time lifetime fee. Once you pay to get in, you’re in for life. We will also send them the products and they get first dibs on everything. We value their feedback. They participate with us and they will tell you, “This isn’t that good,” or, “This is exceptional but if you did this, it may do better.”
It’s a paid member focus group, essentially.
I haven’t thought about it that way but yeah, you’re right.
What’s the one-time fee? How many members do you have?
There are about 600 members and it’s a $297 fee. It is going up this next round. The thing I love about it is it’s a safe place. There is no dumb question. A lot of these barbecue forums and a lot of these barbecue sites seem like if somebody is new, they ask a question. I don’t call them experts because they’re not experts. All the novices who’ve had a bad day can jump on them, crack on them, and beat on them a little bit. We don’t allow any of that. None. If somebody asks a question, we give them honest feedback in a loving, respectful manner. If anyone is ever caught doing that, we remove them from the club.
I’ve done some light diligence on you guys and content seems to be a very important pillar in the experience you deliver, particularly pre-purchase or engagement. You invest a lot in very high-quality videos. Your YouTube channel has over 300,000 subscribers. You have a sizable Facebook page. Same thing with Instagram, in the hundreds of thousands. I know we don’t want to have a favorite channel, but what channel do you think is the foundation for bringing attention at a very cheap rate? You said email is the core, and then all other channels, whether it’s Instagram, whether it’s TikTok, whether it’s YouTube, were also feeding into the harvesting or the build of that email list. It looks like video is the primary media type, but what channel is fundamental?
I would say for us is YouTube.
Would you say you’re a YouTube-first brand?
It could be said that way because we do get found a lot on YouTube, but it was never made as a collection device. It was always generated for knowledge and education for free.
You’re being helpful out there and people want to find out more. Super interesting. I always like to talk about habitual purchases in terms of repeat customers. You’re in the food business. What is retention like? Do you offer subscription services? Do people just come and buy? Is it seasonal when the weather is good? I know in Texas, the weather’s good all year long, so more southern states. How do you get people to be habitual purchasers, besides making the products fantastically good?
We try to meet them where they’re at. The one thing that we do know about our customers is that for every one that comes in the door, 36% are repeat buyers in four months or less. Of that 36%, 55% roughly buy again within the next two months. Of those 55%, 83% return again before the one-year mark. I was telling somebody those numbers and they’re like, “Those are phenomenal.” I’m like, “Not really. I want 100% of everybody that bought wants to buy again. I’ll settle for 80% so we need to work on that.”
We’ve all signed up for the emails and all of a sudden, you feel like you got to use car salesmen on you. “Do you want to buy?” It’s over and over again. They go, “No. If I wanted to buy, we would have bought.” We try not to be that person. Maybe you bought a rub or maybe you have no idea that we have sauces or Wing Dust or wing sauces or barbecue glazes. We try to say, “Have you thought about…” or, “Did you know…” or, “Here’s a video…” or something like that to make sure that we’re doing everything we can to properly put our free tools in front of you on your barbecue journey.
I’m working with a brand now where the repeat purchase rate over a four-month period is about 35%. However, they account for 70% of revenue. It’s not always too bad if you do the math but when you cover more ground, you get more percentage in terms of share of the revenue. Nonetheless, phenomenal numbers. I’m very much impressed. I love the fact that you have the metrics to hand, which is fantastic.
My next question has to do with experimentation. Within your organization and department, you’ve talked about hurdles. I want you to shed some light on hurdles and how you view failure. Let’s say a barbecue sauce doesn’t look good for you or the department selected the wrong fulfillment partners. How do you view failure within departments and within your organization? What is your take on experimentation on it being iterative?
This is an easy one for me. Anybody that knows me knows I want to fail fast and I want to fail often. I’m going to stop short of saying I love failure but I really do because that’s data. If you’re checking the list off on what not to do, it’s going to push you to what you need to be doing by default. I absolutely love failure. I love testing. I love split testing. I’m a fanboy for all of it.
This strikes me to the core of who I am as a person. I remember as a kid, I was told, “Sit down. Shut up. Be quiet. Don’t do that. You can’t go there.” I thought, “Why wouldn’t you want to know?” I found out later in life that I’m built differently than a lot of people. Speed and agility are absolutely my strengths. My weaknesses are sometimes I operate too fast, with too much agility, but I also know that. I try to surround myself with people that can help offset that. I can build on their strengths and they can build on mine, and we can go together. Failure is key to growth.
It’s not a selection criterion you have when you’re recruiting or hiring senior members of your team.
What I look for in a team lead is somebody that is feedback-driven, somebody that’s unafraid to fail, and somebody that understands details. I do some of the weirdest stuff. I walk through the warehouse and if there’s one piece of stick laying on the ground, one piece of pallet, I go, “How many people walk by that without picking it up?” I look for things like that. I’ll see somebody pick it up and I’ll go, “That’s paying attention to the details.”
The customers don’t care about stuff like that. When you pick that little piece of pallet up off the floor, I know that when you’re handling somebody’s order, pick-packing, and shipping it, the details matter to you. You’re going to make sure it’s packed correctly. You’re going to make sure that it shipped correctly. Anything that goes on, the details matter. It’s one of our core values. We pay attention to details because details matter.
I resonate with you. The other question I wanted to ask was around how you approach channels. That layers two ways of looking at channels. One is sales channels, where the sales come, the ding dings, through the website, marketplaces, whether it’s big wholesale orders. We’ve already addressed the second classification channels, which are marketing channels that you use to reach new audiences and communicate. Going into your sales channels, I did mention you’re an omnichannel brand. How important has it been to the majority of Kosmo’s Q in 2022?
It’s been very important in omnipresence. If you see us on Facebook, I want you to see us on Instagram, TikTok, Twitter, Snapchat, YouTube, and all of the channels. We have the content. There are platform-specific audiences. Send it all out. The same thing with our retail partners. I believe in a method I like to call my upstream-downstream method. Meaning, it’s easy to get on a boat and do nothing and go downstream. I can talk to everybody.
My downstream are my friends, family, people around me, and the people that I get to relax and talk to. My sidestream is the little creeks that go up. Those are my mom-and-pop hardware stores and barbecue shops. Those are the people that take a little bit more effort to get into but once you get into them, it’s usually smooth water. You can have a conversation and it’s very natural.
The hardest one, this is what I believe that you should wait to crack last, is your upstream. Anybody that’s ever tried to row anything upstream knows it is extremely difficult, but you don’t grow from safety. You only grow when you step outside of your comfort zone and do something that’s tough, hard, and makes you work.
Those upstream ones are large retailers that may have 20, 30, 50, 100, and 200 locations. They’re harder to get into. They’re harder to get in front of the right person. They’re harder to try to sell them on. They try to beat you down on price. It’s extremely difficult. The amount of product that they can turn in one day versus me selling at a barbecue competition, the numbers aren’t the same. That’s why it takes more work to get into those. That’s my method. I don’t know if it’s right but it works.
Where can you get Kosmo’s Q products upstream now from the big retailers?
There’s Amazon, Ace Hardware, Walmart, soon-to-be Lowe’s, and True Value. I don’t know if you’ve ever been to a Buc-ee’s.
No, but I have been to Walmart. Are you measuring any conversions from other channels to D2C where people are trialing Kosmo’s Q rubs or injections or powders in these sidestream or upstream channels and saying, “I could see the website here. It’s Kosmo’sQ.com.” Then they come to your website to build that direct one-to-one relationship.
We do measure our conversion rate on our website. We also measure it on Amazon and some of the other platforms that allow us the view through to see that information. The one thing we’re finding difficult to see is when does a customer convert from your website to a storefront? We don’t know that data. We don’t know when they make that jump. All we can do is assume that they make the jump by looking at the sales in both. We put new incoming customers on our website. Once they like, know, and trust us, then they may find us at their local Walmart, Ace, whatever. They’re both growing. I wish there was a way that we can gather that information. I don’t know if that’s possible right now.
You might want to try post-purchase surveys. In the D2C, you could ask a few questions. There’s a nice app called EnquireLabs. You’re on Shopify Plus. We interviewed the founder of EnquireLabs on the show. You’re able to ask questions immediately when they make that purchase. You could ask first-time customers. You could ask repeat customers. You could ask both cohorts.
Those questions could be like, “Have you ever bought us in retail in one way?” “Where did you first find out about our brand?” The opt-in rates are 40%, so it’s statistically significant most of the time. It might be worth trying that out. I want to talk about operations, the team. From a supply chain standpoint, you use contract manufacturers to scale, and then you’re also shipping directly for individual orders. How’s it evolving from an R&D standpoint? How are you making iterative changes to your offering?
This is probably one of my biggest failures in the business. I’d never thought we would get to a point where we would have to look at the data in that sector so well, so we jumped into that game late. Since then, we have implemented a WMS into our warehouse, which is up and running but we don’t have the see through on the date of the way that I want to see it yet. We should have that soon.
The one thing we do well with our co-packers is in time manufacturing. We give them our cell numbers and I tell them flat out, “I don’t want to have to send you POs. Would you rather write them?” They were like, “You mean you let us write our own PO?” I’m like, “Yeah, absolutely. Just don’t let us run out of product, don’t overproduce, and always keep a backstock in your warehouse so if we need it in a hurry, we can pull it in an emergency.” So far, three of them have agreed to it, one of them not so good at it, two of them are phenomenal at it. I was like, “If we’re going to gather this information, let’s give it to them. Let’s let them know where we are.” If somebody let me write checks for them, I’d write checks for you.
I’ve got a bit of good news for you. I can get Kosmo’s Q in the UK. I searched for it and you guys are on Amazon UK. You’re also on a UK website called BlackBoxBBQ.co.uk. Quite extensive stuff here in terms of what you guys are doing. The final question I have is we’re in 2022 now and we’re definitely in a recession, even though we need a few more weeks to confirm. Two straight quarters of negative growth. With the consumer brand and food and beverages, you guys are in a good place. What’s your take on inflation at this point in time? What’s your outlook over the next 12 to 18 months? What advice would you give to readers?
I’m not an expert in the field of financial stuff but I’ll be honest with you, I don’t anybody who is. I’m very old school. If you can’t explain it with a crayon, then it’s probably way too complicated and nobody’s going to understand you. The next 12 to 24 months is going to be rough on some people. For me, personally, the advice that I always take and the advice that I give to anybody in and around me that asked for the advice is to be mindful of your money. If you don’t tell your money where to go, it will tell you where it’s gone.
I believe in spending money with brands and companies that align with my values. I also believe in living under your means. I don’t know if I’m wired this way. There are too many people out there going broke trying to look rich and there’s been so much cash put on the street that eventually, it’s like cream, it always rises to the top. The people that are good at getting money are good at getting money and the people that are good at spending money will be good at losing money, unfortunately.
We are in a good spot, not because we’re the cheapest because we’re not, but we are the best. When you want to make that steak for your wife on a Friday night, but you know you can’t go out and spend $100 on a meal and you’re going to make it at home, that’s where we intercept well. With 1 or 2 of our seasonings, you’ll be able to make steak from now till six months from now and it’s going to be the best steak you’ve ever had in your life.
Don’t worry if you don’t know how to make it, we have recipes, we have videos, and we have how-to’s on how to show you how to make the perfect steak. In 2015, I won the World State Championship. I have produced that video 2 or 3 times backyard version and two competition versions on YouTube. The one thing that has taught me is that once you make that steak, I’m going to run you from eating out again.
It’s like how I discovered this clean coffee. I drink coffee with collagen in the morning. Since I’ve started, I hardly ever go to coffee shops in the morning. I was a sucker for coffee shops. It’s a very important point you’re making in the sense that with the economy going where it is, people would be inclined to eat less and make their own foods. It’s an incredibly important time for brands like yours, whereby you’re bringing pretty much gourmet-style taste to the home without having to eat out.
It’s not going to break the bank. It’s not going to set you back a night with you and the missus out at even an average restaurant. You’re looking at $70, $80, $100. How many steaks could you buy? Make a nice mixed salad with a nice baked potato. It makes sense. Even to go back further into what I said at the very beginning, fire brings people together.
There’s a fireside chat here. We’ll go on and on. I want to wrap this up with our evergreen rapid lightning round. Sometimes I call it the rapid-fire round. It’s a lightning round where I asked you about five questions and if you could use a single-sentence answer to each of the questions, we’ll be okay.
Let’s do it.
Are you a morning person?
What is your morning routine like?
I get up at 5:00 AM, I go to the gym, I work out, do my quiet time and meditation, and go to work.
What two things can’t you live without?
Cold beer and barbecue.
What book are you currently reading or listening to?
Final question, what’s been your best mistake to date? That I mean is a setback that’s giving you the biggest feedback.
I have to go back to what my dad has always told me. “If you don’t want to listen, life will teach you everything you need to know.”
Kosmo, it’s been an absolute pleasure having you on the 2X eCommerce podcast show. For those who want to find out more about Kosmo’s Q, it’s Kosmo’sQ.com. You’re quite active on all social media. Search for Kosmo’s and you will find Kosmo’s himself in the YouTube channel. Kosmo, thank you so much.
Thank you for having me.