How to expand a family business – with Ryan Margolin – Professional Hair Labs

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Welcome to the Bring Your Product Idea to Life podcast. This is the podcast for you if you're getting started selling products, or if you'd like to create your own product to sell. I'm Vicki Weinberg, product creation coach and Amazon expert. Every week I share friendly, practical advice as well as inspirational stories from small businesses. Let's get started.

Vicki Weinberg: 00:00:24

Since I am speaking to Ryan Margolin from Professional Hair Labs. Professional hair labs are cosmetics manufacturer who's applied private label products and also custom formulating contract manufacturer for companies globally. I had a really interesting conversation with Ryan. Ryan's company actually started off as a two-person family business, and they've now expanded massively with locations in the US and in Ireland and they sell their products all over the world. So they've had massive expansion over the last 30 years, um, while still remaining a family business. I found that really interesting. We cover loads of topics from doing your own manufacturing to intellectual property and do things to consider when you are looking to expand and sell globally. This was a great conversation and I would love now to introduce you to Ryan. So, hi Ryan. Thank you so much for being here.

Ryan Margolin: 00:01:14

Thanks a lot Vicki. Uh, looking forward to having a chat. Hope you're well.

Vicki Weinberg: 00:01:18

Yeah, really well, thank you. So let's start. Can you please give an introduction to yourself and your business and your products please?

Ryan Margolin: 00:01:25

Yeah, so the company's name is Professional Hair Labs. We're a cosmetic manufacturer, so we manufacture all types of cosmetics, hair care, skincare, you know, predominantly the niche we operated in at the very beginning was the non-surgical side of the hair replacement industry. And over the years we've developed, you know, certain principles and methodologies that has carried us through and helped us build a decent reputation, which is now kind of standing tall, uh, in relation to our expansion plans into a deeper range of cosmetics. So that's kind of the bird's eye view of the company. What we do, we have two locations. Our principal manufacturing facility is in Wexford in Ireland, and we have a warehouse and office facility in Zephyrhills in Florida.

Vicki Weinberg: 00:02:05

Amazing. Thank you. So, if it's okay, Ryan, I'd love to start right at the beginning and what inspired you to set up professional hair labs?

Ryan Margolin: 00:02:12

Well, it's a family run business. So the story of the company stems back to, uh, the 1980s. Uh, my mother was a master hair technician. My dad was a business owner, entrepreneur, whatever way you want to, uh, you know, state it. And, um, they started a business together in, in New Jersey. And they opened up their first hair replacement studio and they moved to Florida. And over a period of time through the products that my mother was using as a technician, she got chemical poisoning and it forced her into early retirement. Uh, my dad ended up selling the, the business and focused his efforts on creating a product line that was safer for technicians and also safe for individuals who wore hair systems. So that's kind of where the company was started. Professional Hair Labs came to be in 1994 and for, you know, maybe 15 years. Uh, it was a really difficult task to retrain an industry that was so set in its ways on new application methods and new process. And eventually what ended up happening is over a period of time, company grew into, you know, a a decent size company, you know, for one person to make a living on, but it was quite stagnant. So, you know, my father got a little bit frustrated and, uh, when the economic crash happened in 2008, uh, myself and him had a conversation and he was like, you know, why don't you come over to Florida? I was living in Ireland at the time. My mother is Irish. And let's have a look and see, you know, if there's anything you can contribute. And initially it was myself and my wife, and we had one daughter at the time. And we kind of said, no, look, it's, it's not really the move we're looking to make at the moment. But then in hindsight, you know, very quickly we realized, look, what do we have to lose? So let's go see what the opportunity is and let's see what we can make of it. So we did that. I spent the first six months learning about the business. The operations internally and also, you know, the customers externally. And I realized there were some really simple changes that we could make to really drive things forward because they had a really good product and a product line. They just didn't have the exposure or what I believed at the time, the right marketing or branding to really, uh, make a good impact. So we stripped the company back in relation to its marketing, its branding. We built everything back up. We launched a new product in 2009 to the marketplace with some really simple marketing. And within 18 months it tripled revenue. So that, that kind of let us know we had a, uh, product, which we have now validated as, um, useful in the industry and we started to focus on how we can roll that out globally. So in 2011, we opened up the Irish location and we started to use that as the global distribution facility. Um, because obviously Ireland has great access to Europe and then, um, you know, globally it makes more sense to ship from Ireland because of logistics. So that's how we kind of got to where we are. And there's been a ton of lessons in between about everything from, you know, personal development to learning how to run a business, to people development, to product developments, and everything in between. So it's been a really interesting, uh, run.

Vicki Weinberg: 00:05:03

Yeah, it sounds like it. And hopefully we can touch on some of those as we go through. So just to be clear, Ryan, so just for myself and everyone listening, so do you predominantly sell b2b?

Ryan Margolin: 00:05:12

Yes, we're a B2B company. Really, our marketing efforts are kind of more targeted towards B2C, simply because at the end of the day, those are the individuals using the products. But B2B is our main business. 99% of our business we deal predominantly with distributors and wholesalers and some retailers.

Vicki Weinberg: 00:05:29

So that's really interesting then, because you mentioned your sort of asking people to buy something that changes the sort of practices they're using. So I guess that's in salons or.

Ryan Margolin: 00:05:38

Yeah.

Vicki Weinberg: 00:05:38

Yeah. So that must have been incredibly challenging actually.

Ryan Margolin: 00:05:43

It still is because some of those methods are still used and, um, while they work very well, I mean, you can't argue that. I think where the danger comes is that the products being used have chemicals in them. So, um, there's a high level of toxicity that, uh, sometimes people are not aware of because manufacturers or suppliers of the product wouldn't be very forthcoming in putting that out there to the world.

Vicki Weinberg: 00:06:04

Absolutely. And I'm assuming those chemicals can impact the consumer as well as the technician using them?

Ryan Margolin: 00:06:10

Of course, yeah. No matter how well ventilated the area is, I mean, when you're inhaling those products that are being put onto your skin, you know you're ingesting them. So over time it's naturally going to have an impact, which is you know, quite dangerous for the technician, but for the individual wearing a hair system or a wig, that product is being placed on their skin, so naturally it's going to absorb into their skin. And over time, that can cause very serious health complications.

Vicki Weinberg: 00:06:34

So that does seem like such a challenge then, because you're having to communicate that message, I guess, to the consumer and to the technicians.

Ryan Margolin: 00:06:40

Um, yeah. Again, and that's one of the challenges that, that we face on a daily basis. I mean, even from a simple fact of, you know, products being purchased online that are coming from countries that just don't really adhere to the regulations. And the reason they don't adhere to the regulations is because it's very difficult to chase them down and hold them accountable, especially if they're in another country. So when you're sitting on the outside looking in on the industry, you see the surface level problems. But when you're operating in the industry on a daily basis, you see how really toxic and dangerous the industry can be. And that's why we've always chosen to operate on the safety first side of things. Because at the end of the day, if we can't provide a solution to the marketplace that's safe, and we can put our head on a pillow at night knowing we're doing the best we can. Don't think that's worth doing in the first place. So.

Vicki Weinberg: 00:07:28

Absolutely, and it also sounds like someone I e yourselves needs to be doing something differently as well.

Ryan Margolin: 00:07:33

Yeah, it is. And look, I mean, at the end of the day, we've always tried to retain the core mission of the company to be able to produce safe products first, performance comes second. Fortunately, we have a good enough team in-House of chemists and you know, sales and marketing, that when we do put something out, it is different than what's in the market. And we let people know exactly how it's different. We don't try to hide anything.

Vicki Weinberg: 00:07:56

Okay, thank you. So all of your products are currently formulated in-house and was that the case right from the start?

Ryan Margolin: 00:08:03

No, uh, we did formulate our own products from the start, but we didn't always manufacture them. Uh, naturally as you start a business, unless you have a heavy round of investment, you're not going to be able to spend 10 million on opening a manufacturing facility. So, uh, what we did is we invested at the very beginning to work with very good chemists. Who were able to help us formulate, we were able to do trials through our own network and we were able to find a good contract manufacturer that could make the products for us. Uh, over the years, what we found is that as we were growing and especially when we hit a really heavy phase of growth, many contract manufacturers struggled to keep up with our needs and we were getting batches that may not be consistent or there was different, you know, discrepancies in the formula that we could see just by looking at it and smelling the product. So naturally, I think as we grew the process for us was To start making the products. And that's what kind of landed us in the position we are today. We've invested literally everything, for the most part that we've made over the last decade back into the operations to take our, you know, facilities from, you know, let's say 10 years ago when we were operating in a 1500, 2000 square foot facility, to where now we're operating close to a hundred thousand square feet. So it's, it's been a really, uh, fast paced project, but if we don't do it this way, we're going to be wasting time and there's a lot more work to do.

Vicki Weinberg: 00:09:24

That's interesting. Thank you. I think you might be one of the first people I've spoken to who's moved their manufacturing in in-house. Can you talk us through some of the advantages and disadvantages of that decision please?

Ryan Margolin: 00:09:35

Yeah, so I think one of the key disadvantages was the lack of knowledge of what it actually takes to become or to make that change from someone who relies on contract manufacturing to someone who manufactures. So there was a lot of rules and regulations that we were not aware of at the beginning. And as we went down the road of building our processes, we realized we needed certain certifications. Uh, we needed to adhere to certain guidelines that we weren't adhering to before because they weren't relevant. So that was one of the disadvantages that required an awful lot of investment into consultants who could help us put those processes in place and make sure that we understood them and we were doing it right from the get go. Uh, secondly, uh, one of the disadvantages was the investment that was required. I mean, at this point now we're well into eight figures of investment to get our facilities. To the point of where they're at right now over the years, and I think unless you are building a brand that is continually on a high trajectory of growth, it's going to be very difficult to maintain that level of investment, and more importantly, maintain the level of sales to maintain the operations. One of the pros is that we have now our eyes on everything. We know every batch that's made is correctly tested, uh, stability wise and, you know, put into our climate chambers to make sure that regardless of wherever in the world that it goes to, it will be okay and remain stable. One of the other benefits is that we are now able to produce and, you know, kind of push the innovative boundaries of cosmetics that we weren't able to before. So we're able to create more products now than we ever have. I mean, our catalogue this year alone is going to be expanding by about 80. So that's 80 different products. Any company anywhere in the world can come to us and say, Hey, I like this product. We can then get that product into their hand off the shelf within a few weeks, rather than taking 12 to 16 weeks, which is kind of what a standard custom formula project entails. So that's one of the pros. Well you know, the speed of entry is, has increased dramatically for us, and we're seeing that now in the new relationships that we're developing on a weekly. Uh, so those are some of the things that we found over the last, you know, couple of years that have been really evident to us.

Vicki Weinberg: 00:11:38

That's brilliant. Thank you. And I guess it also makes you a bit more flexible in terms of manufacturing, in terms of how many, and you know, what you're actually producing at one time. So you told us the scale, the size of your facility, but I'll be really honest, I'm not great at kind of working out what that means in practice. Yeah. But are you able to be manufacturing a number of lines at once?

Ryan Margolin: 00:11:58

Absolutely. So, you know, right now, at the moment, so we only last month, you know, we've had to invest another half million euro into the expansion of new equipment to, you know, facilitate the manufacturing needs and, and the production capacities. So, um, and again, we're moving into lines that we hadn't made before. So when you look at a hundred thousand square feet in scale, I mean, there's a huge jump. I mean, we have, where we used to be doing our filling and mixing in one room, you know, now we have individual parts of the building that everything is done. We have our lab, we have our production area, we have our fulfillment area, we have our manufacturing facility right next door to it, we have the bottling room. So everything has been split up into a flow that makes sense that, you know, once it's completed, moves into the warehouse for storage and ultimately into a container where it gets shipped. So yeah.

Vicki Weinberg: 00:12:45

That's brilliant, thank you very much for that. It's hard for me to visualize these things, and it's brilliant that you're having the demand as well, that you know, to continue to grow.

Ryan Margolin: 00:12:53

Yeah. And you know, look, I, the whole company was kind of based on the demand that we created in the industry, because we were the first people to do a water-based non-toxic solution for wearing wigs and hair systems. But now what's happening is that, you know, we're seeing the demand for other products in the marketplace where, uh, performance may be a little bit compromised. And we're filling that hole, you know, look, it's, it's just, it's a really interesting journey because we're experimenting with things that, you know, realistically we didn't even know existed, you know, 24 months ago. So it's a, it's always a learning curve and fortunately for us, we have, uh, really experienced people on the team who are gutting that path for us.

Vicki Weinberg: 00:13:29

So how has your team grown, if you don't mind me asking? So you mentioned that initially it was your parents who set up the business. So how has it grown over the last, what are we talking now for almost 30 years?

Ryan Margolin: 00:13:39

Yeah, so for 15 of those years, or 17 of those years, it was only two people. And then when we started to hit some growth, uh, back in 2009, it then quickly transitioned from, you know, three people to six people to nine people to 10 people where we have 27 people, uh, on the team now. And that's split between both locations. I think what we've done we're, we're, we're a firm believer in lean systems. So we like to run as optimally as possible. So you know, we're able to achieve an awful lot comfortably with quite a small team because we rely on a high level of automation and which is where the investment comes in as well. We believe that, you know, it's not about what you can save in one year, it's about what you can save over a decade and how that's going to impact your growth plans.

Vicki Weinberg: 00:14:25

Brilliant. Thank you. And in terms of when you started growing your team, I'm just curious, what were some of the first roles that you decided to bring in-house? Because I'm assuming when even when it was a two or three people company, you were still working with external chemist manufacturers.

Ryan Margolin: 00:14:37

Yep. Yeah.

Vicki Weinberg: 00:14:37

What was the first role where you went? Actually, we need someone actually on the team.

Ryan Margolin: 00:14:41

I think from a strategic perspective, it was the most important or the key hire for us, say in our Irish facility, was an operations manager. Someone who could be trained in the day-to-day operations of the company and knew how they run. So I could become hands off and start to lead. The more, you know, the strategic direction of the company we hired tactically, my apologies, I got those mixed up there, uh, on the US side, it was more about having a clear separation between the warehouse and and the office operations, because they work together very well. But when you're moving the volumes that we do, especially in the US, you need people with sole responsibility of each of those. So it was a warehouse operator or a warehouse manager and an operations manager for office operations as well. So they were the three key hires for us to really set the foundations where myself and my two brothers who are also, uh, involved in the company and owners of the company now, that they were the key hires to allow us to set the right foundations to where we could focus on the strategic direction of the company.

Vicki Weinberg: 00:15:36

Thank you. And so I know you, you know, you are very much a family business. Tell us what are some of the positives of, you know, running a business with your family and what can some of the challenges be? Because I'm sure there are challenges from time to time.

Ryan Margolin: 00:15:48

There's plenty of them every day. But the truth of the matter is, is that I wouldn't have it any other way because I feel when you're running a, a family business, and this all really depends on the personalities, fortunately for us, we're quite empathetic people. And I think that has been key to us in maintaining, you know, continual movement forward in times where, you know, there might be difference of opinions. Because naturally there always is. So empathy has been a huge part in that. And because we have that, it has made a lot of the situations that might be a little bit uncomfortable or not as, uh, beneficial. It's been easier to get through those because you're able to place yourself in the shoes of the other person. The other key thing is that regardless of, you know, whatever way things go, you'll always have each other's back. There's a loyalty there that I don't think is very easy to break. So they've been some positives, you know,. Look on the downside is that, well it's actually not really a downside. It depends on how you look at it. Uh, look, I've been in situ. Over the last, you know, say 15, 20 years, where there's been a huge discrepancy in the workload that has been done on one side versus the other. And I think sometimes that can create conflict, but I think especially in a family business, I think it swings and roundabouts. There's times where there's heavier workloads on one person's plate than there is in the other, but that naturally turns, and I do think momentum comes from a place of equality as well. So, um, that to me, it depends on how you look at it. That could be one of the downsides is that just accepting the fact that, you know, you can do much more from a place of equality than you can from fighting over who's going to get more out of certain things. And I think that has been one of the keys to our, uh, quick growth is that, look, we're in this together, we're in this for the same goal. And you know, what better way to have it than just from a place of equality so we can all achieve, you know, what we set out to achieve because we have personal goals that we have for ourselves. And when you're not worrying about, you know, is there a breakdown of communication or is there an underlying issue because one person is getting more than the other, I, I just think it makes the job much easier.

Vicki Weinberg: 00:17:41

That makes total sense. Because I think you're right, everything is swings and roundabouts, isn't it? And sometimes, you know, things can't be equal all of the time. Yeah. I'm kind of comparing it to, I have two kids and they're different ages and you know, it's a constant conversation about things won't always be the same for each of you all of the time, you know, in terms of all kinds of stuff. It's just the way of the world. But I think it's really great to have that outlet, because I can imagine that it could be challenging with different personalities. It could be kind of a challenging situation.

Ryan Margolin: 00:18:08

But that comes down to personal development, I think, and leadership. If you have strong skills that you've developed over the years, or maybe there's some of them you have naturally, I think there's not a single problem that can't be solved. Now, some are harder than others, but ultimately, if you equip yourself with the tools or you know, pay attention to the experiences that your job or your life is throwing at you, I think that's half the battle.

Vicki Weinberg: 00:18:29

Yeah, that makes sense. And I'm assuming as well that yourself and your brothers all have very clearly defined roles as well.

Ryan Margolin: 00:18:34

We do, yeah. So my position would be CEO my brother Daryl, he would have president, and then my brother David, is the chief operating officer. So he would make sure that, you know, in the US side, operations are running as is. And then, you know, from a sales and marketing perspective, you know, myself and Daryl would liaise on that direct.

Vicki Weinberg: 00:18:51

Thank you. And let's talk a little bit about growing particularly, because obviously you started as a family business, there were two people at the outset. What do you think are some of the best ways to grow and particularly scale a family business and, and what are some of the impacts of that that you've seen?

Ryan Margolin: 00:19:05

Yeah, so look, there's a lot of different ways that conversation can go, but I think the first thing that actually has to be done overall is you have to approach any type of growth in a business from a place of personal development. Because at the end of the day, if you are not in the position, or you're not becoming the person that's required to run the company or to make things move forward, you're always going to be the bottleneck. And what I've found is that, you know, personal development is the really kind of subjective topic. You know, it means a lot of things. Lot of different people. For me, I've learned, you know, for myself personally, it's come down to really five key things that, that I've learned over the last 10 years, and those things may not be the same things that would help another person get to where they're going, but I think they're foundational insights that will help someone's see maybe some of the key things they at least need to explore and look at, you know, to help them on their journey. I remember, you know, say five, six years ago, a really simple method was taught to me of where to start. And that is to start with a simple time study. And that time study just basically requires two weeks of your time and you have, uh, sheets in front of you where you write down what you do every 15 minutes and at the end of those two weeks, you break them up into three categories. There's, uh, strategic, there's tactical, and there's self-care. And then basically when you add all those hours up and what bracket they fall into, you get a percentage over two weeks, which you're spending, you know, which you're spending on. And like, if you're in a position of leading a company and you're spending more than half of your time in a tactical position, you need to make that list from that sheet that you drafted of all the tactical things that you're doing, and you need to offload them to somebody because if you continually stay in a tactical position, majority of the time, you're going to become the bottleneck in your company. And I think that was a huge thing for me was realizing that, look, when things get really tactically hard, I need to start making a list and I need to start offloading responsibility because you need to stay in a strategic place in order to guide the direction and even the creative direction of the company. Because at the end of the day, the culture and the mission will only stay as intact as the leaders are in tune, you know, so that was vitally important for me. It was a stark realization from the personal development side of things, you realize that in business, or maybe not even in business, just in general in life, that you know, no one is coming to save you. You know, this is all you and you have to do this on your own. And especially when you're starting a company, there's going to be a lot of long nights, you know, where, you know, sometimes you're wondering, is it all worth it? Um, but you have to maintain that belief in yourself because you know, if there's going to be no one there to tell you you're doing a good job, there's going to be no one there to pat you on the back. There's going to be no awards or recognition. And you need to learn how to be your, your own inspiration. Um, when those times get tough and there's going to be a lot of them. You know, that was a big realization for me because you know, I remember at the very beginning of that journey, um, when I was very passionate about something, I couldn't understand why people weren't as passionate. But you have to realize that no one really cares, uh, until really you've achieved a certain level of success that they can start to admire or relate to, you know, or they want to achieve. So that was a big thing for me. There's a lot of distractions also in the personal development. And I think it's vitally important that you learn how to, you know, manage your focus and not your time. You know, when you have a task in front of you and you realize that your focus is more important than the time that you have available, you learn to lock in and you realize that time is not really relevant at that point because you're solely focused on, you know, the end result. Your circle of people is another thing. Uh, that, that's one of the big things I'm a believer in. You know, over the years, you know, some of the circles I've been involved in, uh, have benefited me very well and helped me, and then others have been quite bad for me. And I don't think it's a bad thing, you know, it's a necessity. You know, as you start to develop as a person, you need to surround yourself with the right people who are there to help you become better and not settle for anything less than the best that they know you could be. And, and people who hold you accountable as well, whether it's a, you know, a business associate, a partner, you know, or a wife or any other person that you spend a lot of time around, you know? Uh, so those key things. I mean, there's a few other things that, you know, naturally I think every single person on this planet experiences, but for me, those, those were three key things on the development side that really helped me break things down to a foundational level and grow.

Vicki Weinberg: 00:23:08

That's really useful. Thank you. And I really liked what you said about the time tracking task as well. I think that's a brilliant place to start because I think you can easily, I did this periodically get to a point in my business where I think, why am I doing this? Why am I the one doing this? Yes. And I think that's good when you get to the point where you're like, okay, these are things I need to off load, because I think there can be a tendency to just take on, take on, take on until actually a good chunk of what you're doing might actually not be the best use of your time.

Ryan Margolin: 00:23:34

Exactly. And then you become the bottleneck and the growth of your business. And I think it's the hardest thing for someone who's growing a business or starting a business to do is let go. And I think it's one of the things that should be learned as quickly as possible, that it is okay to let go as long as you take the time to create the processes to teach somebody. Because once those processes are in. Unless there's a shift in your sales flow or your operations flow, there's going to be no need to go back and change them. So as long as you spend that, let's say five, six hours developing those documents, it's done and you can let go and you can move on and they can, you know, somebody else can train.

Vicki Weinberg: 00:24:11

That's really good advice. Thank you. So while we're talking about scaling Ryan, I know that in your company you went from selling nationally to selling internationally. Can we talk a little bit about what that means and some of the things you might need to consider for anyone listening, thinking they'd like to go down a similar route?

Ryan Margolin: 00:24:27

Yeah, so we didn't really think about any of those things when we started to scale internationally. I think, you know, unfortunately for ourselves, we didn't have the right people around us at the time to really guide us on how to strategically expand our brand. But we just learned from making mistakes. So what that actually means is that when, when you look at another country, obviously you know, you digitally, you want to look at, you know, the different kind of search results online. What's going on. You want to look around social media, see if you can find different search terms for, you know, the products that you offer, or planning on creating an offering and seeing what you know the feedback is, or if there's any need for those products globally. Then you really want to start looking at what the rules and regulations of the countries are, because naturally it's the one thing that's overlooked. It's like, okay, I have this product. Let's say if you have a physical product, and let's say you want to use amazon's fulfillment facilities to store them and ship them. You know, realistically, what's going to happen at that point of entry before they get to Amazon's warehouse. You know, do you have the right paperwork? Are the products compliant? Do they have the right information on the labels, on the boxes? Uh, all of those things are boxes that you need to tick before you consider trading internationally. And most importantly, get your IP in. Because if you have a product that's worth, uh, copying or um, counterfeiting, it will 100% be copied or counterfeited. And if you don't have the right protection in place, it's going to cost a lot of money to defend your position. And if the product itself is not somewhat profitable, your company's going to get destroyed and your brand is going to be cannibalized. Um, you know, we, we made some really bad mistakes at the beginning. We had some not great guidance from some of our legal team that we used to work with, and they didn't advise us on expanding our IP rights globally, and we got caught and it cost us a lot of money and it's still ongoing, but there's a high level of counterfeits in our, of our brand, you know, all over the world now. And this is something we're fighting on a daily basis because it kind of challenges the kind of foundations on which the company was built, which was safety. You know, you've got cosmetic products that are being put into packaging that's identical to ours, or identical labels, and the product inside it is really poor. And in some cases dangerous. So, yeah, look, those are the things that I would advise anyone starting a business or, or looking to expand globally is that make sure you have your IP in line. Make sure you're reviewing the regulations about importing that product into the country and selling in that country. Does it need a different language on the labels? Does it need, you know, different set of instructions? All of those things are, are vitally important.

Vicki Weinberg: 00:26:56

Thank you so much for that. And speaking about IP and counterfeit, I was really surprised by what, what you said then about how hard it seems to be to fight this, even if you do have everything in place.

Ryan Margolin: 00:27:07

Absolutely. Um, because different countries have different rules and sometimes the investment to fight it outweighs, you know, the remuneration you're going to get if you win. So you have to really find other strategic ways to combat this. So, for example, um, when I'll take, you know, maybe a country. You know, say a few years ago, uh, we realized that our product was being counterfeited in the Philippines. Um, it wasn't a country we had planned on expanding into. It was rife in the country. The brand was very popular, but it was full of counterfeit. So we were seeing a lot of complaints coming out. We were getting emails like, your product is burning me, or your product is doing this. It's not performing. And we would get these photos of these bottles and be like, that's not our product. So we were like, okay, we can go down the road of fighting this and spending, you know, hundreds of thousands of dollars, you know, enforcing our IP rights in that country. But what if we tried it a little differently? So we actually took the money that we were going to invest in fighting it legally, and we invested it in creating technology for our brand that would allow us to put codes on our packaging that were not able to be replicated. And if somebody tried to replicate them, a customer would be able to report it directly from our app, that they'd be able to send us the details of where they bought it, the pictures of the bottle. And, uh, their location and what that's enabled us to do now, it's enabled us to strategically approach these places and be like, hey, look, here's the deal. You know, here's a complaint. We know that the product you're selling is not genuine. Um, we are the manufacturers and the owners of this brand. Uh, we love the opportunity to do business with you. So what we actually did was we turned a negative into a positive and we said, look, we started a counterfeit swap program where it was like, uh, in certain countries if we caught, you know, people selling counter, Um, we would offer them the opportunity to swap out, uh, their fake products for legitimate products as long as they continue to do business with us. And that's worked pretty well and it's saved us a lot of money. And we were able to add some strategic value to our company by creating a software that's helped us protect our brand and actually give consumers very clear indication as to whether the product they have in their hand is legitimate or not.

Vicki Weinberg: 00:29:07

That's really smart. I really like that. And I'm assuming that some of the places selling these products had no idea they were counterfeit.

Ryan Margolin: 00:29:14

No. You'll find a lot of the brick and mortar stores that are just selling the product and they're buying it from sales reps. They don't have any idea. But then there are some who know full well what they're doing. And it's very easy to tell the difference now with the systems we have in place internally. So it's taken us a long time to navigate those waters and, but we've learned an awful lot and we know it's a part of the industry that will never go away. And for our company it will never fully go away. But if we're doing what we can to make sure that it makes it next year impossible to replicate the brand and letting people know that this is exactly what they should expect when buying one of our products, I think it's going to be very difficult for counterfeiters to get away with it.

Vicki Weinberg: 00:29:51

That's really interesting. Thank you. And also, I'm just wondering, do you protect your brand or do you also protect your formulations aswell?

Ryan Margolin: 00:29:59

We do. Yeah. So for the products that we have in our line, they would be general formulations that we can, you know, kind of adjust according to customer's needs. There's no real need to patent that technology because it's not really innovative. But for some of the products that we work on that do have innovative technology in them, yes, we absolutely do. So there's, you know, trademarks, copyright design, right? And all of those type of IP protection things that we do. But then on the other side, you have your patents and those would fall into the lines of formulations.

Vicki Weinberg: 00:30:27

Amazing. Thank you. And as you've said, so I guess it would just depend on exactly what you were selling as to what kind of protection you need. So it sounds like if anyone's wondering what they need, the best thing is to go and get some sensible advice.

Ryan Margolin: 00:30:38

Absolutely. And one of the key things that I always say is that for me, I know the journey we had in finding good people for that purpose. So if anyone that's listening that needs some advice on that or needs someone to contact, I'd be more than happy to point them in the right direct.

Vicki Weinberg: 00:30:53

That's a really kind offer Ryan, thank you so much. Um, I have one final question before we finish. It's a question I ask everyone. Obviously you shared a lot already, but this might be a tough one. What would your number one piece of advice be for other product businesses?

Ryan Margolin: 00:31:07

So for product businesses, I would say just make sure that above everything else you focus on the consistency of quality. Because you know what, you're only really as good as your last sale. If you have a dedicated, loyal customer that's been ordering, you know from you for years, and you find that, you know, they get a couple of bad orders. They're not coming back to you, they're going to find a competitor to go to. So from a product per, from a physical perspective, there's that. I think from a personal perspective, one of the last pieces of advice I would say is that, you know, look throughout your time of growing a business, no matter how big or small you know, the company is or gets, I think realizing that, you know, you need to control, you know, the level of fear that you're going to have, it's going to be vitally important because there's going to be aspects of your journey that push you into really uncomfortable situations. But you have to welcome it. You have to welcome it as an opportunity to learn. I often talk about fire as an analogy. I mean, fire has the ability to do one of two things. It, it can either burn everything down around you or you can control it and it can keep you warm. You know, I think it's a mindset thing that you really need to work on in order to make sure that you're always in a right frame of mind to deal with whatever's thrown at you. Because you have to remember, mindset is only a tool. It gives you the ability to do something. It gives you the ability to look at things in a certain way. Ultimately you have to use that tool then to fix the problem or to move forward and make the changes. So that on the personal side, that's my last piece of advice that I think I'll give.

Vicki Weinberg: 00:32:31

No, that's brilliant. Thank you. And thank you so much for everything you shared. It's been great to talk to, to you.

Ryan Margolin: 00:32:35

No, thanks a lot. Yeah, I appreciate it. It was good to chat.

Vicki Weinberg: 00:32:40

Thank you so much for listening right to the end of this episode. Do remember that you can get the full back catalogue and lots of free resources on my website, vicki weinberg.com. Please do remember to rate and review this episode if you've enjoyed it, and also share it with a friend who you think might find it useful. Thank you again and see you next week.