On Growing Our Annual Sales To $1.3M

Robert Patton

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Published: July 27th, 2020

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Robert Patton

Founder, SHEATH LLC

$300K

revenue/mo

Founders

Employees

SHEATH LLC

sheathunderwear.com

from Woodland Park, CO, USA

started February 2014

$300,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

Discover what books Robert recommends to grow your business!

Think and Grow Rich (Think and Grow Rich Series) Napoleon Hill

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Limitless: Upgrade Your Brain, Learn Anything Faster, And

Want more updates on SHEATH LLC? Check out these stories:

1. Despite Cutting Our Ad Budget By 50%, We Had Our Best Year Ever And Hit $3.6M ARR (2022) ➜

2. Updates And Plans For Our $3.6M/Year Pouch Underwear Brand (2023) ➜

3. How I Grew A Men's Pouch Underwear Line To $1M/Year (2019) ➜

4. A Strategic Partnership Helped Us Hit $3.6M/Year [Update] (2024) ➜

This is a follow up story for SHEATH LLC. If you're interested in reading how they got started, published over 5 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

Greetings And Salutations.

My name is Robert Patton and I am the CEO of SHEATH Underwear; The Original Dual Pouch underwear; It’s like a kangaroo pouch for your joey; these are my favorite underwear. My favorite SHEATH option right now is the SHEATH Red and Black V’ our eight-inch legged version.

They simply feel great and the Modal fabric blend is amazing but we have some new dry-fit technology in production and we are eagerly anticipating the release because the prototype is exceptional. This new release will be directed toward our purely athletic community as of now our current fabric option is primarily for everyday wear. Our current SHEATH options can be useful in many athletic environments because of the support provided by the pouch. The pouch keeps your boys off your legs and out of sticky situations. The new releases should be out by the time this article is published, so google Dry fit SHEATH and it should come up on sheathunderwear.com Also perhaps sign up for our email list so you can get the latest updates: cliche. Our customers are superior beings that have above average intelligence, will, and strength. As crazy as this year has been with Corona and Protests, SHEATH overall is estimated to gross 2.3 million in Sales 2020.

how-we-grew-our-annual-sales-from-960k-to-1-3m-over-last-year

Tell us about what you’ve been up to! Has the business been growing?

SHEATH is having more fun than ever and has not slowed down much even given the scamdemic, jk pandemic maybe?. Regardless these have been challenging times for many and as with any challenge, when we hit roadblocks, we tend to work our way around them. That being said, we are blessed that we aren’t dealing with any physical locations with employees, that would have been a serious obstacle however my buddies with bars were able to get government stimulus money to cover payroll and seemed to come out on top. There isn’t much choice but to find a solution when you approach a metaphorical wall, otherwise, you fail. That is what you do as an entrepreneur. As mentioned in the previous article, in 2018 we moved our inventory out of the garage and into a full-time warehouse fulfillment center in order to put ourselves in a position of limitless scalability.

You have to go inward. Stop looking for external answers. The answers will come from the infinite if you quiet the mind.

We did this ahead of schedule because our organic growth wasn’t ready but primarily because a Shopify plus agent called us and told us we were in the top 1% of all Shopify stores and that they were going to help us 10X. It made sense to me because if we make more money, they make more money. They really made us feel really good about our position online and they enticed us into joining their 2000$ a month plan with convincingly repetitive use of the words 10 X. So I took out 100k in loans to purchase a massive amount of inventory based on this optimism to be able to sustain the expected growth projected by this Shopify Plus expert salesmen. Hint: don’t fall for this! They don't’ really even try to 10 x you. After you sign a year contract, they tell you that is just a slogan. So we spent 24 thousand dollars more than we needed to for the website for 2018-2019 and outsourced to a warehouse Rakuten Super logistics. Also, don’t really recommend them because as it turns out they were overcharging us by 7,000$ a month which we could have really used for advertising to grow the company. These added expenses really limited our growth in 2019.

We had been up to that point doubled our gross sales annually, but this year we grew from 960,000 in 2018, to 1.3 million in 2019.

These were some bitter pills to swallow but in business, there will be challenges. Right away from both of these agreements, we could tell that we had been duped. The Rakuten overcharges almost put us out of business. Luckily I had taken over 100k in loans which inadvertently happened after the 10x promises by Shopify plus. So it was a blessing in disguise. We turned that 24k lesson into lemonade. What else can you do? You can’t cry and moan, you have to keep a positive attitude and persevere. Quitters NEver Win!! Shout out to Michael Bisping, former UFC Middleweight Champion of the world, and UFC Hall of Famer retired now Podcaster and co-author of Quitters Never Win Available on Amazon. Why do we shout him out? Well, we sponsor his podcast Believe you Me, hosted by Gas digital Network, a network on which we sponsor multiple podcasts. Your Welcome with Michael Malice, Part of The Problem with Dave Smith, Legion of Skanks with the Skanks, Sex Drugs and Rock and Roll, you get the picture, and we also sponsor Skeptic Tank with Ari Shaffir, and Tuesdays with Stories with Marc Normand and Joe List to name a few.

Why do we sponsor podcasts? And What type of podcasts? We sponsor comedy podcasts because initially, we wanted to sponsor Joe Rogan, the Kingmaker, but he’s’ been sponsored by one of our competitors with deep pockets for years, so what do we do? We hit up everyone around him. Friends, Guests, Fighters, Whoever, the Picture above is Robert Oberst, one of the strongest men in the world and we reached out to him because he was on Joe Rogan, the new Johnny Carson. If you are on Rogan, you are a made man. But it became clear to me somewhere along the way that to get into the minds of the people, comedy was the best way to broach the subject of ball pouch underwear. Humor is the best ice breaker, and Geico has the craziest commercials and I love that. We will get back to that later. For now, I want to tell why comedians are the best men for the job of selling underwear. The reason is that they take you on a mental journey. When you watch or listen to a comedian, you are willfully consenting to be hypnotized by the comedian. You let go of your logic and you go along for the ride and when they tell you something is good, it has broken into the subconscious. IS this all scientific, no. Is this bro-science, yes, but It has been working for us that that is what is most important. Additionally to comedians, we also sponsor UFC fighters. Starting to see the Joe Rogan connection? I could go on. I’ll tell my Joe Rogan story later. But not only do we sponsor funny guys, but also Bad A$$ Mother f-ers. Family-friendly here.

As the name of his Ranch in New Mexico infers, the person that lives at the BMF ranch, Bad Ass Mother Fucker Ranch, Donald Cerrone joined the SHEATH team in 2018.

We picked up Donald Cowboy Cerrone after a comment he made on a post by Tecia Torres, a local UFC fighter that we had signed months before the comments. He said, “tell them, boys, to send me some underwear, and whatever they think they should send, tell them to double it”. We reached out and sent him 60 pairs of underwear and let it rest for a couple of months, then one day scrolling through Instagram, I see a post from him and decide to check in and see how he like them. He said, “ I’m wearing these badass bitches Right now”. And Sent a screenshot.

Not long after we signed the deal and he was fighting like every other weekend. It was crazy. He went on a title run then ended up fighting the Top 3 fighters in that weight class and losing all of them, but still, a Warrior which is who we look for to represent SHEATH. Warriors and Jesters. Game of Thrones baby! Funny story, one of the guys he fought Tony Ferguson, who hadn’t lost in 12 years, joins SHEATH and fights Justin Gaethje, both beat Cerrone in those three fights aforementioned. We sign Ferguson, and he loses to Gaethje! WTF, lol. If I told you how much we paid for this post you would shit yourself. $7,500! I’m trying to be open and honest to your readers because otherwise, these Instagrammers will try to take advantage of you. In my opinion, you shouldn’t pay more than 10$ per CPM, maybe 15, but if you pay more it’s very hard to make your money back, at least for us.

We had the Interim Champion Tony Ferguson which was Amazingly cool, but then we lost it, but we will keep supporting MMA and UFC fighters because it is a great sport and we love it. Do we make our money back on the investment all the time? It’s tough to say. It’s branding and the idea is to promote that BMF’s wear these. If it’s good enough for them, you know it’s good enough for you. As far as Cerrone goes, we paid over 30k, was it worth it. YES! Check out our Instagram when we got to hang with him and do a drum circle in the Sauna at BMF Ranch with Robert Oberst. It seemed like when we signed Donald, everyone else was down to work with us. So it was a big step for our company and we are grateful to him. And we legitimately like underwear!!! He told me!! Before we started paying him lol.

Picking up where we left off on Geico and their insanely funny commercials and how that influenced us. We try to make in house commercials that are funny. We try to use humor always in life and in business. The best medicine is laughter and the best salesmen are funny. Look at Michael Scott, fortunately, we don’t have to convince people too much about the benefit of the product. Usually, when we mention the pouch for the boys to keep them from sticking to your leg, guys and girls get the picture. They don’t need to ponder gazing off into the distance, it is an instant understanding and that is what is so great about SHEATH. So many guys have emailed and told us that they had the idea once before long ago and never did anything with it. That means there is a consensus amongst men that balls stuck to leg equals bad. And SHEATH is the solution.

Joe Rogan Story of the Beginning. It was December of 2012 and I was a big fan of the Joe Rogan Experience. I for some reason thought it would be a good idea to go to one of his shows and somehow get underwear to him. I think originally we were going to go and try to meet him after the show, but during the show, I started to get tired so I thought I would throw the underwear on to the stage when his set was over and save us both some time. It was an hour and ten minutes or so after his set had begun. He was doing some crowd work asking how everyone was doing and whatnot, I have the Audio to this day. It was about this time that I threw a pair of SHEATH onto the stage. It was a direct hit. He thought it was an Austin is Weird shirt he commented as he picked it up, then he says it right away SHEATH, a pouch in your underwear, what do you need a pouch in your underwear for to hide drugs, get your priority straight, this has got to be the stupidest idea I’ve ever heard of or a billion-dollar Idea. I like to think it was the latter. That whole incident, I have come to believe blackballed us from working with him as it was a huge sign of disrespect. I listen to his podcast and know he doesn't’ really like it when people try to get involved with the act. My bad Joe, but it does show that there is more than one way to get your product out to the masses. As far as advertising goes dollar for dollar, Podcasts have been a huge success for me. My goal is always to earn 1 to 1 per dollar spent on the original airing and anything after that is gravy. We have a 30%R return customer ration which could be better, but it has worked for us this far.

OMG, we didn’t get Joe Rogan but we did catch a big fish… Alpha M.. Aaron Marino. Big deal.

What have been your biggest lessons learned in the last year?

Go big Aaron.

I started my podcast back up...I’m learning a lot about myself through conversations. It doesn’t all have to be business. A huge!!! Part of business is personal development. Breathing, meditating exercise, laughing, sauna, yoga, sex, working out. Love. Quiet. I’ve been on the Wim hof breathing method for about 60 days and so far it’s changed my LIFE!!! I have so much more energy!

What’s in the plans for the upcoming year, and the next 5 years?

After passing the Million Dollar mark, rather than press the gas full speed ahead, we really want to hone in on our processes and solidify the foundation of our organization so that we can meet growth with the capacity to handle it without springing leaks in the system. We want to be sold to be able to handle 10 million in sales before we push forward and then when we hit 10 million in revenue in a few years, we will re-asses the organizational structure to ensure that we could handle the growth.

That being said, we were well on our way to expanding to the EU, we had the pieces in place. We were going to hire Huboo, a fulfillment center in the UK to handle all of our EU orders and we were also going to fill Amazon warehouses around the region with stock to begin growing globally by being able to better take care of our EU customers which have been growing steadily over the years. For some reason Germany really spiked up 400%, we are told it is due to an avid fan who happens to host a german Podcast. We were already in production and setting up the contracts with importers, VAT assistance(hit me up for this later). VAT in any EU territory is 20% no matter what. That makes it very difficult to do business there but if you are going to do it, get help. I think if everything is through amazon, then that makes it a little easier because the tax preparations by Amazon is pre-emptive with regards to tax liability. But get with a CPA before you make any big decisions. We were taking all the steps and then….. COVID!!

When COVID hit, we decided that expansion was not going to be a great idea and thought that if our fulfillment center was to get quarantined having inventory at our home, would benefit us greatly to be able to fulfill orders ourselves. Boy was that a blessing of a decision. Our warehouse didn’t get shut down from COVID but did get bought out by another company which severely slowed the processing of our orders and if it were not for us having had inventory at our home. That Alpha M promo would have been a disaster, but instead, we were able to fulfill over 1000 orders from our house in a timely fashion to keep most of our customers happy. We had a few where we had to double their order to keep them as a customer but we do what we have to to keep the boss (customer) coming back. Even if the product is the best, the service also has to be there or customers will go elsewhere.

Have you read any good books in the last year?

I’m on my 3rd book for the year and they are all by podcasters we sponsor. It’s funny how when you start sponsoring someone, if they make you money, you start to like them a lot more. I always liked Michael Bisping, but when we started sponsoring the pod, I “got to know him better” by listening and he released the book Quitters Never Win and it was great!

I also read the New Right by Michael Malice and am now reading Dear reader by Michael Malice, the latter two are more political but fascinating all the same. My go-to bible book is Think and Grow Rich by Napoleon Hill… the science of Getting Rich by Wallace Wattles is also a great more simplified version.

Advice for other entrepreneurs who might be struggling to grow their business?

Advice for entrepreneurs who might be struggling….. Now, this may sound woo, but… you have to go inward. Stop looking for external answers. The answers will come from the infinite if you quiet the mind. Stop thinking you know everything and ask the universe/God/your heart for the answers and listen, quiet your mind, and listen. Or go run and wait for the answers, no headphones, go run and let the mind provide the answers.

Any time SHEATH has hit a roadblock, I always find the answer. There is always a solution. Don’t’ quit and the game isn’t over. Quitters never win lol.

Are you looking to hire for certain positions right now?

We just picked up a new Intern. We don’t hire often. We try to keep our team lean. And if you did come on it would be for free to start then very low pay while you earn your position. It is a very small group and we don’t just let anyone in.