How can retailers ensure that new smoking supplies will sell? Having thousands of customers subscription smoking boxes gives Hemper a built-in market to develop and test new products. Bryan Gerber the co-founder and CEO is back with Dan Humiston for part 2 to share a hidden strength of their business model. He is back to explain how their in-house design team has created hundreds of products which they premiere first to their subscribers before releasing to their online and wholesale customers. Produced by PodConx MJBulls - https://podconx.com/podcasts/raising-cannabis-capital Dan Humiston - https://podconx.com/guests/dan-humiston Bryan Gerber - https://podconx.com/guests/bryan-gerber Hemper - https://www.hemper.co/ Recorded on Squadcast
How can retailers ensure that new smoking supplies will sell?
Having thousands of customers subscription smoking boxes gives Hemper a built-in market to develop and test new products. Bryan Gerber the co-founder and CEO is back with Dan Humiston for part 2 to share a hidden strength of their business model. He is back to explain how their in-house design team has created hundreds of products which they premiere first to their subscribers before releasing to their online and wholesale customers.
MJBulls - https://podconx.com/podcasts/raising-cannabis-capital
Dan Humiston - https://podconx.com/guests/dan-humiston
Bryan Gerber - https://podconx.com/guests/bryan-gerber
Hemper - https://www.hemper.co/
Dan Humiston: [00:00:00] today at MJ bulls, we are joined by Brian Gerber, the CEO of hamper. Brian. Welcome back to the show.
Bryan Gerber: thanks, Dan. I appreciate you having me back. So.
Dan Humiston: Well, I'm glad you could come back. After you're here last time. Some of our listeners had some follow up questions that I thought we could tackle today. And for those of you who miss Brian's previous interview Humper is an online smoking accessory store. However, what makes Humper unique in what it's most known for, or really known for is the subscription boxes, which we talked a lot about last time.
Unfortunately, some of our listeners were not familiar with Hemper and didn't realize that they did not need a subscription to purchase smoking accessories. So. I asked Brian to come back on to take a little deeper dive into the accessories that they have to offer. And Brian, I, I, , I think that's a great place to start.
Can you give our listeners a sense of what type of products are available on the he site?
Bryan Gerber: For sure. Yeah. So I would love to also touch on, our product development, ethos and how we [00:01:00] move through all of that. And so, the original hamper product was obviously the subscription box, which was. Curated by myself and a couple of other partners. And originally we were sourcing third party products, and obviously we wanted to keep the subscription box fresh and, Taking it from a couple of the other subscription box companies that, I felt just didn't really put enough emphasis on product development.
And so what we do here that's different and why you don't have to subscribe to he to get our products is we take apart. All these different, like seven figure markets, right? So there's like glass, there's cleaning, there's storage, there's odor, eliminating there's preparation goods vaporization so on and so forth.
And so what we started doing was basically. Dissecting, the top five to 10 products in those categories and really understanding what are they lacking? You know, What are they missing? Where do they do well, where do they miss? And what we really do is we just innovate on those categories and how we do it is.
We basically have a full [00:02:00] product development team in house. We have 3d printers. We have a couple of them. Actually, we have plots printers, you name it. We like to get the product to about 90% of the way there before we ship it off to wherever we have to manufacture it. And so what we do is choose a category that we wanna tackle. We come up with the ideation, we start pro rapid prototyping. And then once we have the finished product, what we do is we actually release it through the subscription box first. So if you want the latest and greatest, right, and you don't, you're not trying to keep up on it yourself.
As long as you subscribe to the box, you'll always get the newest gadget that we put in
there. And then if you're not interested in the subscription, it's available 30 days after that month on the Hemper website. And we also release certain like colorways in the box that would be exclusive to the box that would then come out later potentially.
, there's always that one friend who wants the iPhone the day it comes out, that, that. The subscription box. , [00:03:00] but you don't have to subscribe. And one of the cool things about Hemper is that you don't have to even get the box at all. You can just buy the products all cart from the website, or if you love something that's actually replenishable.
So let's say like, like our Hemper tech fresh wipes or something like that, you can actually subscribe to those products, individual.
Dan Humiston: okay. Yeah.
Bryan Gerber: so that's really cool. We have a ton of people who do that, they buy into the box to get like an array of assortment of things. They identify what they really love, and then they go subscribe to it individually after the month, , if it's a replenishable, so like cleaning gear, odor, eliminating stuff, a lot of people subscribe to but then. , this year we really wanted to dive into more products that live outside the box. And so we actually launched a an Excel box, which is $150 a month. And now we're able to basically put in a little bit more budget into , those products and release it through the Excel version.
And so a lot of folks who, okay, got. [00:04:00] A couple, he Hemper boxes my seven inch pieces, I really want to take into one of their Excel pieces and some of their, higher end or expensive accessories. And so now we've been releasing new products through that as well. One of our new products that we just released is called the Hemper ISO Plex.
It's basically like a all in one storage ISO. Cleaning station for concentrate users. And, it's got a funnel on the bottom to get the ISO in really need. And we released that through the Excel box and we actually, it's one of our top selling products on Amazon right now. We're selling like, I think over 50 units a day, something like that.
, if you're into concentrate. and you have , a set up that needs a little bit more organization and you were looking for something that's like really cool and compact that, doesn't just like, stand out on your coffee table. It's really, you, awesome looking that would be really, a great way to go about it.
And then also, we release more expensive third party products as well through that,
Dan Humiston: Yeah. , I'm on your website right now. And I was just, I'm just looking at like, I mean, there's just so many products. How many skews do you actually have on [00:05:00] here?
Bryan Gerber: So on the website we have about 1600 SKUs. Our Hemper branded. We have about call it 250 of those and, we're constantly coming out with new products, , we wanna be known for creating true, real functional, useful products. Right. When people look at it, we want them to think no brainer, like, oh, , I didn't even know I needed.
Right. That's the reaction we're trying to evoke out of everybody. And, especially on the B2B side of our business, where, we take a lot of the , initial feedback from our customers on the subscription side. And we go to our distribution partners and basically say, Hey guys, look, we sold thousands of these units within a 30 day span.
Here's our reviews on our. People are raving about it. You should put this through to your distribution channel. And that was one of the first data driven approaches to product development, as opposed to like, Hey, , we had this one idea, please put my product in store, or please put it through your distribution channel.
I'm telling you're gonna make money. Well, that. [00:06:00] That's not how we go about, you can't sell hope. The data-driven approach really puts a lot of confidence back into the distributors and the retail stores, because all these retail stores, they have a finance amount of space,
so every storage has to be monetized. And if they're not putting products that move, you're not doing them any service. , , it's collecting dust and they're not in the storage business. . They're in the selling
Dan Humiston: Right. So that is almost , like your wholesale division where you're selling, we're selling to. Okay. That makes a lot of sense. Like right here, I'm on the BS best BS for sale page. And I see the, the hamper cactus, Jack B
Bryan Gerber: Yeah.
Dan Humiston: and the rip, the ripper. Now these are all custom that, that you guys designed in the Hemper.
Bryan Gerber: We have a three person product development team that basically sits there and does ideation for different glass pieces, and really what separates Heber from a lot of the other glass companies out there. And, I really wanna make this, apparent is that our [00:07:00] glass has the same exact if not more function than every other brand out there, but our products are more. , I get a ton of questions all the time. Like how many banks do people really need? Right. And, and I agree. That statement, right? Where if you have 10 beaker style bongs on your shelf, you don't need another beaker style B. Right. But the way we do it, where we curate these themes and we really create them into more of a sculpture, like an art piece, , and in fact, we actually just got, and I, I want to say this is the first we actually just got our rubber ducky bong.
I registered as a sculpture from the us PTO office.
and I believe it's actually the first time the us PTO office actually granted a product paraphernalia, a a bong a sculpture. And this is actually allowing us to get IP now for our products where, you know, a ton of other companies are knocking them off [00:08:00] because a lot of people think we just buy these from China and call it a.
No, that's not what's happening. We design these in-house completely years in advance. We try to make it as fun as possible. And the themes are what really people dive into, , they don't need another beaker, bong or a straight two bong or a generic, little clear bong. Right. They want something that's fun.
Right. And I think a lot of people are missing the boat where, when they ask the question, how many S do people really need? Well, . Let's change the light. Let's talk about how many sneakers do people need. You really only need one pair of shoes. But Monday, you wanna wear the Nikes Tuesday.
You wanna wear the Adidas Wednesday. You wanna wear the Jordans, and, and that's what the community is right now. It's Monday. I wanna smoke the rubber ducky, bong Thursday. I want the cactus, Jack bong, and they have their rotation and that's how people live.
Dan Humiston: Yeah, well, and also it, it, you can theme it, like you said, if for Halloween, , you can use the. The the, yeah, the go bong or I'm looking at , the ripper bong. They'd be fun if you had a Halloween party. Let's just talk real quickly. you mentioned , [00:09:00] on the boxes that there are set boxes, but you can also customize the boxes too.
Is that correct?
Bryan Gerber: Yeah. So, you can't customize a subscription box per se, but you can customize what you would like to subscribe to individually. So for example, let's say you're really into like an odor eliminating spray, right? And you go through that every month or a couple times a month. If you go to the product page on our website, you, there will be a little widget where you can actually subscribe to those individual product.
So we would just send you that odor eliminating spray, as opposed to anything else that you would, buy out the site so you can kind of tailor your ritual. To whatever you need and we're on the back end, creating those offerings. So boxes the subscribing to anything products, creating new products, on monthly.
And one of our latest, greatest ones we actually just [00:10:00] launched is called the Hemper quick hitters. Actually. It's the first disposable multi-use flavored. One hit. Okay. And it's completely eco-friendly. We designed it out of a paper straw actually. And we were kind of tasked with, what does an apparatus look like if seven 11 was selling one?
And, we really took to this because, a ton of the flavor bands were coming into effect especially at the convenience store level where all the tobacco products are basically gonna disappear over the next couple years. And so all. Retailers are looking for new products that can tailor to that flavor market without violating any of the PMT stuff and still, giving them that margin that they're looking for.
And a lot of companies, are used to like 10, 15, 20% on the shelf at the commute store. But the products that we come out with are usually Keystone. So they're doubling their money, which is really attractive [00:11:00] as they kind of phase out these 10, 15%. Margin products and we kind of come in with these new age gadgets.
Dan Humiston: clever. That's really clever. We Wow. I, I, I was, I was, I had had all another idea that I was gonna talk about, but that is that's gonna make a big difference, especially like you said, as the world changes in tobacco products, get phased out, that's gonna make , a huge difference.
that gets me really excited. But the other thing that, got me excited was the potential IP that you have for , all the products that you're inventing. , you have an established customer base reoccurring customer base, which is really exciting. I know a lot of investors love this idea.
Love your business. Moving forward. Will there be opportunities for investors to invest in Hemper or do you see that as an option eventually?
Bryan Gerber: So right now, we are actually entertaining a few different options. , back in 2019, We were attempting to raise a series B right before all the craziness went [00:12:00] down with COVID and, we pumped the breaks on that just because it wasn't the right time. We didn't know what was happening.
And I know a lot of companies were going out there raising funds, with this as the outlook, when this was going down in the world. And so , fortunately, through COVID, we went, you. Very cash flow positive, and we actually didn't even need to raise around.
And we're probably one of the few companies right now that, you know, I sleep fine at night, I know a lot of founders out there right now are struggling. A lot of the markets, we, they think we hit the bottoms last month, but you know, the money's dried up right now.
A lot of companies and VCs are focusing on their portfolio codes right now. Kind of the sentiment is, cut, cut, cut, save, save, save, and ride this wave out. And for us, fortunately, we're, in a great position, we're get a great cast position. , we just made the ink 500 again this year for the fourth time in a row.
And so, were entertaining, potentially doing another round. But as of right now, we are [00:13:00] nothing is.
Dan Humiston: Sure. Sure. Just gobbling up market share with all that cash coming in. Good for you. Good for you. We'll have all of he's information in Brian's information in the show notes. So if you're tired around having a run to the. Convenient store in the middle of the night because you ran outta supplies.
Just click the link in the show notes and get on the subscription with the boxes. Brian, I enjoy talking to you. , you're an inspiration for everyone, for all the new ideas that you constantly are coming up with. Keep it going.
Bryan Gerber: Thanks, Dan. I really appreciate it.