Brady Peterson: From Licensor to Setting Up Shop(ify) - tBR Person of the Week

My inventor life began around 10 years ago when I began tinkering away on a magnetic toy that was to become my first pitch, to Mindware at CHITAG in 2014. I was very fortunate and licensed the toy soon after the meeting, which went on to become MagnaMix, and even more fortunate that it remains on store shelves to this day.

So, let me dwell a little bit on CHITAG. I’m sure most of you have heard of it and many have attended, but it was CHITAG that single handedly set me off on my inventing journey. Since that first conference, where I attended as a new inventor, I’ve gone on to license around a dozen toys and games to the likes of Mindware, Marbles (now owned by Spin Master), and Fat Brain Toys. I can’t thank Mary Couzin enough for all she has done for not only me but for the entire inventor community (not to mention in bringing the toy and game companies noticeably closer). If you are a new, seasoned or just a wannabe inventor you simply cannot go wrong in attending ChiTag in November, whether it be in person or of the virtual variety.

Ok, so on to the topic at hand – how I went from an inventor licensing my ideas to becoming a publisher / online retailer. Even before the current situation created an increased opportunity for stay at home activities, I had dreamt of bringing a product to life, cutting out the middle man and selling directly to the end consumer (hello Warby Parker!). This somewhat meandering article is about that year-long journey and will touch on the following topics in what it took to bring both the Otrio Inventor’s Edition and Otrio.com to life:

Selecting the Product to Sell
Factory Sourcing
Product Development
Package Development
Manufacturing and Testing
E-Commerce Platform Selection
Website Development
Shipping (inbound) and Warehousing
Marketing & Advertising
Customer Service

Disclaimer: Consider this to be from a layman’s perspective and of the lessons I learned for my specific project. I know many if not most of you are far more knowledgeable on many of the topics discussed than I, which is precisely the article’s point. I’ve found that you don’t need to be an expert in all areas to chart a viable path forward, you just need to know how to find (and engage) the true experts where needed.

Selecting the Product to Sell

This one was relatively easy. I had always retained the rights to make and sell a luxury version of my game Otrio, from my initial contract with Marbles (the Brain Store) on through the transfer of the IP to Spin Master. I had always envisioned a solid walnut game board w/ anodized aluminum rings, so that is what I set out to bring to life, a top shelf Inventor’s Edition of the game.

Takeaway: Selecting an established product / concept which already has some brand awareness can help you to hit the ground running. Otrio was a previous Finland and Sweden Family Game of the Year winner (2016) as well as a TOTY finalist (2019). In addition, Otrio is sold in Target and Walmart, has sold around a half million copies and is available in around 20 countries worldwide.

Factory Sourcing

I initially started googling wooden toy factories as well as evaluating companies on Alibaba.com. Needless to say, there are dozens if not hundreds of options out there, but where to start? Then it hit me, there had been a former team at Marbles that had gone down that path and worked with numerous factories on their amazing brainy toys, so surely they would have some suggestions on where to look. Bingo, after a couple of calls I was put in contact w/ a fantastic wooden toy factory based out of Taiwan, Tree Toys.

Takeaway: When you’re not sure where to start reach out to someone that’s been down a similar path before. There are tremendous resources available in the toy and game industry and most people are more than eager to help you out. If you’re looking for a one stop shop you can look to someone like The Product Greenhouse (who are amazing btw), or if you are interested in doing some of the lifting yourself then you can work with one or more specialized companies to fill in the gaps, which is the direction I chose

Product Development

This one took a while. The game board and aluminum ring design were the easy part, the more challenging part was in dealing w/ the natural warping that occurs to wood when exposed to a variety of natural conditions. Without getting into too many details the product development process took around 6 months and 4 or 5 iterations (that I was aware of) before the warping issue was under control. Never could I have imagined how many process steps, how much time and how much TLC would go into making a single solid walnut Otrio board.

Takeaway: Select a partner that has been there and done that with your product type. Most manufacturers will tell you that they can make pretty much anything, and some probably can or will outsource certain components, but it’s probably best to gravitate towards companies that make products similar to yours (e.g. you probably don’t want a plush toy manufacturer quoting you to make a kids bicycle). Tree Toys has vast experience with making high quality wooden games and toys, so they were the perfect partner for the project.

Package Development

Not to diminish the effort involved, but this one was relatively straight forward. I already had a packaging artwork direction in mind, so all I needed was to partner with the right design firm to refine it and make it a reality. That partner was the amazing duo of Luis and Melissa Diaz at Idea Monster (who were also previously affiliated with Marbles and recommended by former employees). I cannot say enough about their work. Simply wow – these guys know their stuff. They were able to take my sketches, improve upon the core design elements and seamlessly work with the factory on all of the final files to bring the product to life.

Takeaway: Get input from people you trust and, if possible, align yourself with those responsible for products you want to emulate. I really loved Marbles products, both the design and function, so it made the most sense in the world to reach out to the people that helped bring them to life.

Manufacturing and Testing

Once the product development issues were resolved and I had approved the production samples, the manufacturing process was a completely hands-off process from my perspective. I was given a production schedule and told to hold tight. This sounded great but then it dawned on me, what about product testing? What tests were required to sell in the US? What were the age specific requirements? For this I engaged a firm that was created by a few former Marbles employees, The Creative Fold. Their team had worked with Tree Toys in the past, so they were already familiar with their staff as well as were very knowledgeable on the US testing requirements. The Creative Fold created a testing requirements document for Tree Toys to execute as well as reviewed the testing results upon completion, again making the entire process nearly effortless for me.

Takeaway: Working with a US based firm that had experience with product compliance as well as with the specific factory I had chosen made what first appeared as a tricky task to navigate completely painless.

E-Commerce Platform Selection

Although there are numerous platforms / site builders out there I was already firmly entrenched in camp Shopify from day one. Part of the reason was its industry leading status and part was due to a friend’s success in using it. Plus, everything a resource strapped beginner needs is already integrated into the platform: from storefront design to content marketing to performance analytics.

Takeaway: Going with a proven industry leader can take a lot of the guesswork and risk out of a decision. As someone once said, ‘Nobody ever got fired for going with IBM’. Ok, maybe I’m dating myself a bit there.

Website Development

Although Shopify comes with many free themes I chose to go with a paid theme (Kindgom) for the site for a relatively reasonable price ($180). Then, once again I tapped the very talented team at the Creative Fold for both website creation as well as product photography. After around a month of back and forth Otrio.com v1.0 was finished and ready for business. Now I just needed to receive the product in-house (which is literally what I was initially thinking).

Takeaway: For me it was the opportunity cost of my time. Although I probably could have fumbled around configuring the site, I found hiring an expert to do the job not only freed me up to work on other aspects of bringing the business to life (not to mention working my day job), it undoubtedly resulted in a much higher quality end product.

Shipping (inbound) and Warehousing

Fortunately, the seemingly complicated process of end to end shipping from the factory, including navigating through customs, was made easy thanks to the team at Tree Toys. They arranged all of the details for the shipment to arrive at my front door, all I needed to do was tell them where to deliver them and be ready when they arrived. The biggest question mark became where to put 1000 games, which came in 500 case packs on 10 pallets. As I eluded to above my initial thought was to have the games shipped to our home and keep them on prem, primarily to save on the cost of storage. But where? The garage gets too hot and humid and our basement was already modified to double as a daycare center. Long story short, and thankfully due to my wife’s insistence, we made the smart decision and rented a 30’ x 10’ climate-controlled storage locker out by the airport. What a great call. I had no concept how much space 10 full sized pallets would take up, let alone how much effort it would take to haul 500 fifteen-pound case packs down to the basement.

Takeaway: With respect to the shipping, pre-negotiating a full end to end agreement with the factory at the start of the project made things infinitely easier. On the warehousing, trying to save a buck would have been a huge mistake. Not only with the effort required to move the games, but also with the household disruption that would have occurred by storing the games at home.

Marketing / Advertising

I still have a ton to learn here but what I’ve learned so far is that:

Google Ads are relatively easy to set up and get running, but learning to use them effectively w/ respect to cost and targeting will take some time.
Similarly, Facebook Ads are relatively easy to set up and provide some nice simple metrics for evaluating effectiveness (and there are much more complicated metrics available). Also, Facebook offered $200 in free advertising if you spend $100 in 30 days. I was also able to have three near hour-long conference calls with a FB marketing expert to set up and monitor my first ad campaign, which extremely helpful.
There is tremendous power in advertising on local Facebook groups. My wife is a member of Chicago’s Northshore Moms group, which allows business posts the first Monday of each month. The first post she did received a fantastic response and resulted in around 20 orders (and nearly 100 positive comments from those that have played Spin Masters versions of the game). Many don’t allow advertising, or only allow it during selected periods, but doing a bit of research to find local groups that are a fit for your product and allow local advertising can be very fruitful and free or inexpensive.
Magazine ads can be expensive. I was able to reach an agreement to advertise in Dwell Magazine, but ads in some other suitable periodicals were way outside of anything I could afford, especially given the limited profits available with relatively small quantity of games I have available for sale.
Inclusion in magazine and/or online Holiday Gift Guides can be worth their weight in gold, but finding the right product submission process / people can been challenging. When Marbles introduced first introduced Otrio they were able to get it into Real Simple’s Holiday Gift Guide, which reportedly really helped with sales. Fortunately, I was able to contact them w/ respect to submissions but have found it difficult to navigate to the right person w/ many other magazines and online resources. You can hire a PR firm to help with this, but this can be costly and there are no guarantees. So if you’re reading this and know of any Holiday Gift Guide contacts feel free to point me in the right direction! .-)

Takeaway: Social media advertising is a beast, in both power and complexity. To help navigate this there are some good free resources available, such as google and YouTube, and of course many paid online courses and agencies to assist you with your efforts. Sorry, I’m a complete newbie so that’s all I have on that one.

Order Fulfilment & Shipping (customer)

This was probably the most shockingly easy part of the whole endeavor. I had nightmares of running carloads of games to UPS, USPS or FedEx and then waiting in line to have them weighed, measured and labels applied. Imagine doing this for dozens of games on a wintry Saturday afternoon in December? Well, much to my delight that wasn’t remotely the case. Unbeknownst to me when I signed up, Shopify has that all easily covered. Your unfulfilled orders show up in a list and all you need to do is select a ‘Print Shipping Label’ option and the software automatically presents you with shipping options and costs from all of the major carriers (based on your pre-set up shipping box size and weight). You simply pick which option you want and print the label. Your linked bank account will be charged for the shipping charges on a periodic basis (weekly I think), just as your sales deposits automatically get deposited into your account (every few days). Super simple. Also, you can schedule a UPS pickup for a nominal fee ($4), even same day (depending upon where you live I guess), and they’ll take as many packages as you have to ship. The one caveat is that this works well when offering your customers free shipping or flat rate shipping, but if you want to charge them the actual shipping costs I believe you’ll need to integrate your carrier account into Shopify. For me a $10 flat shipping rate just about covers a game’s shipping cost within the continental US and the convenience is unbeatable.

Takeaway: I lucked out on this one, but if you’re starting out it will pay to figure out how your fulfillment will work end-to-end before selecting an e-commerce platform.

Customer Service / Returns

I honestly don’t have much to report on this one since I’m just starting out. I do have an FAQ on the site that says if you have an issue please contact me directly and we’ll figure it out. I’m sure I’ll have to more formalize that stance at some point.

My last point (and strong opinion) is that the relationships with the people at the companies you work with are as important as the companies and their capabilities themselves. I’m sure I could have found a factory that could have made game cheaper and more quickly, but that’s not what I was/am looking for. I want to know my games are in the best hands possible and if issues do arise there are people there that I trust to resolve the issue. Same goes for the people at The Creative Fold and Idea Monster. I consider these people as much friends as much as business acquaintances and am looking forward to raising a glass to our friendships, and hopefully business successes, when the timing is once again appropriate (which will hopefully be at CHITAG in 2021 at the latest).

If you have any questions or comments on anything I mentioned please don’t hesitate to reach out to me at brady@otrio.com. I’d love to hear from you!

My À la carte approach (and what I used them for)

The Creative Fold