Ecommerce: From Successful Real Estate Investor to 7-Figure DTC Brand Owner with Joshua Ellis

Hey guys, we're here for episode 26 of the e-commerce opportunity where I'm joined by Josh. Hey, Josh. How are you? Thanks for having me. How are you doing? Well, man, I'm pumped to get your story I'm pumped to kind of catch up on when we first met about a year and a half ago So lots of good stuff coming your way. Do you mind starting with kind of what you're currently working on? Sure I am the founder CEO Creative director, you know wearing many hats here at with cocktails With co is a fresh ingredient cocktail mix No preservatives. No additives. We've kind of taken the the challenges out of making a cocktail at home Especially when you host so with co stands for with company. It's very much focused around building community one bottle at a time So that's a little bit about what the project is What we're doing currently is scaling we're learning how to scale How to find amazing people that are a lot smarter than me bring them on the team and continue to push the brain as far as we can beverages a very It's a very big industry, it's a hot industry right now I think Kobe kind of changed some of the habits of our consumer and our customer and it's been a wild ride So the best answer your question, we're trying to build one of the most Incredible beverage brands surrounding community and how we gather today, so That's that's in a nutshell. We could break that down into a lot of different dimensions and degrees, which I'm sure we will Yeah, and the second I'd love to talk about like what you think change unlike the consumer behavior But first I want to talk about like the why like why did you start this? What opportunity did you see? Was it a personal story? What's your wife? Yeah, I think the best answer that my why all these oftentimes is taught tied to how I'm wired how I am wired is Grew up as a son of an entrepreneur. My dad owns some car dealerships here and Nashville That's where I'm out of Nashville, Tennessee I was more of a rebellious learner if you will meaning Educate the education system did not wasn't my learning style and but yet we're all put in rows and taught to absorb information and then show up and be able to regurgitate it and for me, I wasn't the best student not so much because a lack of intellect, but my interest was being at the car lot learning how to Detail cars purchase cars sell cars. It was more watching my dad Solve problems for people Then all sudden I got attached to that emotion, which is I could go do anything But I want to solve a problem. And so for me it was about street smart. It was about Learned and experience education. So between the ages of about 15 To 21 I was working the car lot So while my friends were getting off school and going to hang out for me, it was like I know where I'm going I'm going to the place where I'm learning and feeling energized and passionate and my dad always said it's not so much what we're selling it's about learning to listen to the customer need and Being able to solve a problem and once you learn that you can plug that model into almost any business or industry And so I think I was learning more about People and problem-solving than I was Detailing cars and helping my dad sell them from that stemmed a Almost a nature of I'm not gonna go to school I did not go to college by choice and I think a little bit of a rebellious mind of like I want I want to Break the system break the mold Go to school Then go to college and not be so certain on what the end result is or what you're driven by you're passionate by and so For me I said because I don't know I don't want to go to school instead. I want to spend the next four years Getting paid to learn something so I wouldn't got a job in insurance Wasn't the best fit for me, but I did really well I was rookie of the year that year Youngest uneducated kid in in a fortune 100 company. I did really well because I took those same principles What is who are these people? I'm talking to what's their problem? How do I add value a level of trust and then enroll them and align them into a product offering or service? And at this time it was insurance and I was like man this does work I can I can actually Have to take the same equation into a different industry show up and and follow those steps and so insurance was something where You know, I made money. I made decent money or being a you know 21 22 23 year old and my friends were in college, you know going out partying collecting debt And there was almost this Magnetic synergy of like man, what's Josh doing? Like how's he learning this stuff? Why is he pushing the limit and showing up and kind of breaking the mold if you will? And for me, that's why I say that rebellious thing is like wait, everyone's going this direction I want to go this direction and somewhere along the way. I'm gonna find my way and For me it was it was insurance at that time To speed up left there saw the real estate industry was exploding in Nashville First thought is I don't want to be a realtor like I thought about my parents realtor and I'm like It's just such a it's just not the cap I want to wear and I'm like, dude You're an insurance You were able to come into something that you thought was kind of an older industry and you found your way and you did it Your way now go in a real estate and do that. So In about 2015 I left insurance Took a leap. I mean, I think I was at like my Six-figure year and was like, you know what? I'd rather quit tomorrow and go chase something else and learn that and kind of pull the rug out from under me and Go and see if this formula works in real estate what I learned during that time which is going to play in here with with co in a second is I Love being super uncomfortable It's how I perform when I don't know how it's gonna work If I don't have all the answers if I don't have the education the resources the knowledge, etc it's well jump out of the nest and grow your wings on the way down or you can stay in the nest the rest of your life and and not take that risk and So jumped out of insurance did the real estate thing. I think I might have lost rookie of the year in the state of Tennessee by Like a couple deals and to me those accolades aren't they don't really Drive me but it was like, oh my gosh. I just started realizing I can do this Flip the script and still solve a problem and understand How to find something I'm passionate about that also solves a problem And real estate was a was a blast. I did it for the last four years as a realtor, but then started Shifting my hat to being an investor And bought a couple dozen rental properties and continue to do that and love that as a passion project but last year and 20 the start of 2020 Actually the end of 19 I should say I call him now He's a partner in the company a gentleman approached me and said Josh, you know, I see you're doing real estate He owns a publication and they had around real estate. They had done a story on me About being a realtor and he's like, I think you've got something else that That you need to be doing you've got this little cocktail company that you and a buddy started These are basically what the bottles look like. So they're just all fresh ingredient cocktails I'll kind of get into this in a minute. He's like you have this amazing product that solves a problem Why are you selling real estate? And I'm like, well, it's just it's safe. I don't know how to build a product brand I don't know how to scale an econ product. I don't know wholesale distribution. I just don't it's not a world I know and that was holding me back and he said I Think you were made to do something massive in your life, and I think you've got the right product you just don't have all the information and I think you need to go all in on that and explore it and Something started stirring in my heart that excitement to flip the script and to jump out of the nest and to just get scared again I'm like I Wanted it. You know what the the fear start and the uncertainty started actually being An appetizer to great things for me where I'm like, yeah let me try some of that and it's always led me to the next season or the next business and Then at 19 he said I'll help you with this, but you gotta do three things. Number one. You gotta quit being a realtor. I'm like, okay Number two you have to sell one of your rental properties and Use that as seed capital because you and your family are not gonna make any money for the next six to eight months while you lay the foundation and Number three, you got to go home and tell your wife your crazy idea and get her on board because without her this isn't gonna work and I went home and over the next month. I did all three of those things and the start of 2020 I was all in at with Co Had we had no revenue coming in But maybe a couple liquor stores. I was again leaving probably a probably a low It was low six-figure comfort and was just like cool now tomorrow. I have no money coming in. I Will not be able to get approved for anything from a bank because now I'm I'm a lot riskier without all this real estate income But that was that all-in moment It was all or nothing because I realized I had to get so scared That I would fight to make it happen and I tried doing the cocktail thing on the side for about three years and we never What it never really got any traction And so when I made that all-in commitment, I risked everything. I risked my wife and I all of our Savings we blew through I risked, you know any commission from real estate and I risked everything all of our assets and said I'm gonna go all-in and that's kind of what led us up to how I got to this moment of with Co and little did I know, you know, or anyone in the world know for the most part is We're about to go through a pandemic like what a time to risk it all right? But again, we didn't know and and the beautiful thing is Cove It actually played a significant role in what the last 18 months have looked like since since going all-in And I'm fired up for your story. We met in February 2020. I geek out. I liked you I knew a little bit of your story, but actually just learned a lot So really appreciate you sharing that one thing. I think that would be interesting before we talk about like, you know Scaling the business and growing the business. We talked about product development. That's not something that anyone's ever really talked about You know, how did you go about developing the product and what is the product is it alcoholic is a non-alcoholic How do you use it? We talked a little bit about that Yeah this Initially, I'm gonna grab something right here off-camera initially, I Love to host that's just part of my How I'm wired is community and gathering and creating experiences for people every year on my birthday Which actually was a couple days ago. I always do a big party I'm already planning one for later this month, and I love gathering. I kind of have this Nostalgic Gatsby version, which is like how do people feel when they're here? What the glassware what I swear like elevation and Experience and ultimately community at the end of the day. So I was hosting a lot. I met a gentleman This is like five years ago, who was a bartender out of st. Louis Bisbo Very talented craftsman Attention to detail at heart We got coffee and come to find out what really drove him was creating incredible experiences through beverage And I knew that that was his why well a few months later. I'm having a birthday, which is June 7th Five years ago, and I'm like, hey, man can you show up and just bartend in my backyard bring all your tools and Your you know leather apron or whatever it is that could elevate it, right? We said sure. When is it? I said tomorrow night. He's like do that I'm working too short of notice, but he said Let me do something you show up to your birthday I'm gonna drop some stuff off and make something special and I'm like cool called my wife. I'm like, hey, this guy's coming over I've only met once just let him in the house He's gonna set something really cool up and what he did is he set up a self-service Bar cart on our back porch. So station one. My last name's Ellis. It said Ellis Island old-fashioned station two was something around Flowers, which I think now has become the bouquet Which is one of our cocktails and then the other one was a mule with ginger and this little instruction card I was handwritten said poor poor it wasn't even called with go Actually, we had to change the company name at some point, but it's basically said for one jigger, which is a little Pouring thing that bartenders use or an ounce and a half of this Ounce and a half of liquor stir and garnish and I'm like, all right tried it and I'm like, holy moly This is the best old-fashioned I've ever made because I can't make drinks very well, which is so funny that I'm on this company, but Three things happened that night. We had about 50 people over big birthday party and and these three moments hit me number one These taste great and these were his recipes that he was selling 14 $15 cocktails I'm like these taste phenomenal the ingredients the freshness. I love them right and it's how neat we're in my backyard number two All my guests are loving this experience. They're all making their own drinks We're all trying each other's and being like wow yours tastes just like mine. So my consistency and then last the problem solver is I Just hosted 50 people and the only drinks I made a night were mine and that's where I'm like There's a pain point when hosting there's a pain point around community and gathering at the home Or wherever you are that you're having a drink if you don't know what you're doing You're stuck with a subpar quality drink. The flip side is Bradley my original founder He knew what he was doing. So when he was hosting you spent the whole night making people drinks So we're like, let's create let's take bar recipes, which is what these are this is agave margarita I Called him and I said if you can figure out how to follow your cocktails that you serve in the bowl I'll figure out how to sell them and five years ago We went out on a mission only knowing each other for one coffee meeting And we went all in and he created the entire line right now. We have eight cocktails From gimlets to old fashions to a CBD Paloma We're about to launch a pineapple chili like we have all these amazing things that are in the line, but it's all His work of art that we figured out how to how to bottle and create a product So, you know we do we have a co-packer. We went found a co-packer. They bottled it got a label company Tons of years that I just put into two sentences We bootstrapped it I put a thousand dollars in a bank account five years ago and Here we are today. So from a product standpoint We we decided we can't sacrifice quality for convenience so everything is top-shelf quality ingredients as I said at the beginning of the Our conversation no preservatives no additives if you go check 90% of what's out there You're gonna have a bunch of stuff on the back that you can't pronounce I know it might be hard to see but right here you can see we have Fresh lime juice agave orange oil and water That's the only thing in here what you can add and then step two says add your liquor of choice So some of them you can do vodka gin tequila rum champagne even soda water that for those that don't drink. So That's a little bit of just product development took about three years We didn't have any money if I was to do it over again, which we'd all do things different We could I could probably spin a similar product out and in probably six months, but the first two to three years is just us Bootstrapping and the mixer space was not very big. Matter of fact, it was mainly neon green plastic cups or plastic bottles So like there was definitely nothing in the industry now, there's a ton of great products out there But that was a little bit of just product development was just really scrappy Problem-solving I didn't want to raise funds and try to figure it out because I knew that would be too easy It was like no, let's let's stay scrappy and really learn how to build a great product And I will say today the result of our success is not our marketing spend and all these other things It's a product is so damn good that people order it over and over and over and at the end of the day It solves that problem Of making a drink at home so a little bit of the product backstory five years ago Yeah It took me last year to actually quit my job and go all in and that story is a remarkable story in and of itself Love it, man. No, this is super inspiring I appreciate you sharing all this in terms of the business today Like what does the team size look like and what are some of the roles of the of your team members today? Good question When I met you in February of 2020 a geek out shout out Nick Great. That was a great podcast you do with Nick by the way Love them When we were at geek out, we had never run a Facebook ad we had net no paid media We had no email strategy. We had no distribution. No wholesale I came out there as a one-man team and I had one other person delivering stuff to liquor stores We're maybe doing you know, five six seven thousand a month and total revenue just delivering product door-to-door When I came back From geek out which is for those that don't know very ecom focused from email to paid media, etc I'm in the room with guys spending millions of dollars and paid ads. They're looking at this bottle going You've never run an ad. This is liquid gold for the ad space and for email. It's like What are you doing and I'm like, well, I'm here with my buddy Chandler Welling and they're like, oh well You're in good hands Chandler's gonna he's the dude Y'all are and Chandler and I had only met one other time and he's like bro. Come out to LA with me We clicked we became fast friends. We're still really good friends this day hung out last week and He was the first believer and like hey Let me show you a world that you don't know and it's gonna be one that's gonna have a significant impact. So We come back from geek out LA Chandler and I work out away, even though we didn't have much money to onboard Facebook ads and from then till now that Just that that one channel allowed us to really scale the company up. But from there open up Amazon. We're on Amazon Prime Depending on your area probably same day shipping To getting state distribution, Tennessee, and now we're working on Georgia and Florida Onboarding with brands like Williams Sonoma and some really awesome partnerships and That all really stemmed from about last February till now. I believe we are Between some advisory roles that I brought on just key beverage Experts that are I'm just blessed to even have crossroads with them and have them behind the scenes with me so between advisory and our sales team CMO a COO, I think we're right around 20 people Actually, no, I just scheduled a big company dinner for July and there's 25 people Again lat early 2020 do an eight or nine thousand a month and by myself so It it's a testament to I think that all-in mentality like being on One foot in one foot out actually becomes a hindrance like the side hustle thing works but once you to extend but once that proof of concept and that clear vision forward and Building your systems here what I like to call like Scalably adaptive systems that can be You know replicated and you can plug people into those systems and you start to solve problems as you get bigger and as you get Bigger you're able to find better people than you So that's been a neat story of worrying being I say this and I laugh about it being the marketing guy Instagram guy Photography guy video guy accounting guy delivery guy sales Got like it is if you're listening and you're wearing 30 hats like that's what you need to do You have to wear 30 hats So then you know how to steward it remove it and give it to somebody that is way better at doing it than you So I think we have an amazing team and most of our Profit in the company just gets rolled back into finding more great people to help And I love this and congrats to me. It's crazy to see from your 2020 to June of 2021 Just that the rocket ship of growth and the hustle and the hard work and the highs and the lows So that's incredible The last topic that I really want to cover is something that you kind of you know Mentioned a little bit at the beginning I want to talk about like how COVID had changed kind of Consumer behavior and buying patterns and kind of also like tying that in with like your e-commerce thoughts versus retail thoughts Like how are you kind of positioned today? And how are you positioning in the future? Can we talk through some of that for sure? Obviously, we all know there's probably not anyone listening that can't resonate with what our lives look like last year and in many ways It was devastating and in some ways it created challenges that we had to adapt to and a lot of those led to some awesome outcomes, but You know you start to think about as a as a people we were We were we lost freedom in many ways and in that freedom A lot of people that buying habit was justified to online buying and it was geared toward comfort, right? We're not going out when we go out We generally are spending money on things that make us feel good and look good And that could be food or beverage or going to the movies or shopping when all that freedom almost becomes Enclosed to your home and your couch you start to look for things that make you feel a little bit like what life was like before we quarantine and Drinking was one of those big things for people and I'm sure in many ways there was more drinking than we all should have been doing But in other ways there was I'm at home and tonight You know, it sounds good that old-fashioned that my bartender friend used to make up the road Well, I can't go there now The next thing they do which we all do is we get our we get on here and we start trying to solve a problem For ourselves, how do I make an old-fashioned at home? Oh, it's Cinco I'm gonna type in margarita mixes BAM. Whoever is playing the game behind the scenes through advertising and email and pay media and own media all of a sudden becomes There we are at the top of your search. You're going to Google you're going to Amazon and so I think in many ways it led a lot of our consumers to start looking for What is staying at home look like and for many of them? It was it looks like online shopping and I think We rose to the top Because the quality and because the systems and structures and the marketing efforts we were doing behind the scenes So I think it just changed the behavior and now it actually not only did it explode beverage Historically higher than it's ever been It put mixers on the map in a way. They've never been And it's no longer like a liquor store is just about getting liquor now It's about well, how do I want to experience that liquor? What new mixers have come out? What is the best looking one on the shelf? It's a it's you know to buy something without knowing how it tastes is difficult And so for us, we just had to brand it. Well package it well and make it taste well But I think that's what the Kovac Error did if you will for our consumer is made them were open to exploring beverages at home without buying 19-ingredients and looking on Pinterest and not being able to make it taste like they want but then having all these extra ingredients in your Fridge now, that's everything you need in one bottle you pour this over ice you add liquor you stir it or shake it and you've got a fresh cocktail beverage that We have places in Nashville selling these at twelve thirteen fourteen dollars in their restaurant So you get that quality, but you're able to do that at home And so I think for those reasons code would play to a role in our consumer behavior for sure Yeah, that was beautifully summarized and well said and I guess the last question I have is don't don't give dollars But as a percent, what's the markup between or not the markup? What's like the distribution between sales coming from retail or like bars and things like that restaurants? And what's the sales coming from online? What's it today? And where do you think it will be in a year from today? good question, so I Would say most of last year we grew about 1100 percent from 2019 and 2020 obviously But we shared a little bit about that. I would say majority of that in the beginning was EECOM What that did is as that EECOM cash flow is beginning. We were then able to start looking at The wholesale side and liquor stores and getting distribution. So I think last year as a whole we were probably 65 70 percent EECOM and all the remaining 35 to 40 was probably Wholesale now, I'd say it's depending on the month. It's pretty close to 50-50 and I for us as a beverage company We're building to sell whether we ever sell or not as a different question But the mentality is built the whole book built to sell Is really the premise that got me thinking about how do you build it right and make it attractive along the way? To where it's more omni-channel approach not a singular approach where it's like well, here's your EECOM. All right, it's valued at this or here's your 19,000 liquor stores. It's died at this what is attractive about what we're building at with Co is It's not singular focus. It is this omni-channel approach where the value of wholesale is significant to an Acquisition if and when that ever comes but also they can go well Look at all these customers you own look at the emails that you guys are doing to build value and Email is one of our highest performing channels. Thanks to chase Just his course and as his ability to help us understand that story and how important it is has Probably Seven or eight X its revenue just working and and having someone on my team work exclusively with all Everything you're teaching which is fantastic. So I think where it's going to go in the future for us. The play is obviously continuing to grow EECOM It's always going to be a focus because it allows us to actually have a relationship with our customer and engage and create a bigger Really a life a lifetime customer But what we're focused heavily on over the next 12 to 24 months is national distribution so I'll summarize this in about 30 seconds. We are currently in Tennessee We're working on launching, Georgia right now, and we're also working on launching, Florida What that means is we go and we find a distributor They say hey, we have you know, 10,000 liquor stores and bars and restaurants in these in a state They take our product and they become they're the ones the truck sitting outside of liquor stores and restaurants Dolling cases of product and we've all seen it. Our goal is to Probably be by the end of this year and in six to seven of the biggest drinking states And then next year probably roll in to between 12 and 20 states For distribution, it's a heavier play, but at the end of the day It's what will set us apart and really rise to the top But especially with all the competitors out there is market share for distribution is going to be huge in beverage It's not if you have a product company It's not to say that that's the best route for all products But for us for the game, we're trying to play with this scale big and raise valuations fast major top line focus With a very high aware awareness of bottom line a buddy of mine. Josh Durham says Top line is vanity bottom line is sanity. And if you're listening right now, do not neglect the bottom line at all So that's the future for us state distribution national distribution and then just continuing to build a wildly Large family of with co-drinkers that are all drinking with company around the world. So that's that's where we're headed Fantastic fantastic way to end it dude. I appreciate so much of your story and you know, how transparent and all the insight Thank you so so much for being here what's the best way for people to go try your product for people to ask you a question be able to Work with you work for you. What are the best ways that people can find the website and kind of you personally? Yep I'll start with me personally. I try to share a lot of just my authentic journey. I don't really hold a lot back Here's what I'm learning on the type where I like to trip over something and talk about it while I'm still in pain And then years down the road try to say it in a way that relates. So if you want to follow Just true authentic entrepreneurial journey behind the scenes of the company and my life my family, etc You can follow me at at modern-day leader On Instagram, that's my primary outlet For me personally and as far as with co Our website is with co cocktails. That's w I th co cocktails calm that's ultimately the best place to Follow our journey let alone become a customer for those of you that prefer Amazon We are an Amazon Prime just go to Amazon and type with co But definitely follow us on social media that same handle is at with co cocktails Love to have anybody listening. Give us a shot Let me know what you think and let chaser I know and I'm sure you guys are gonna love it There's like I said, whether you drink whiskey vodka gin rum tequila mezcal or soda water Kind of covered the entire gamut. So Yeah, follow us and find us on socials amazing Josh. Thanks so much. Appreciate you Awesome, man. Thanks Jason worth