A chocolate maker and two retail consultants talk virtual markets and agile buying strategies

Hello and welcome to Brick and Order, a podcast from Fair, the online wholesale marketplace powering local retail. Every week on Brick and Order, we'll hear from a couple of entrepreneurs from the Fair community, from independent brand owners to local retailers, to hear firsthand stories of triumphs, growing pains and advice for the year ahead. My name is Clarence and as always, I'm excited to sit down with creative visionaries and small business owners and to share their stories with you. It's officially summertime, which only means one thing in the wholesale world. Trade shows are coming up. On today's episode, we'll hear from a brand owner and a pair of retail finance experts on navigating both virtual and in person trade shows and how best to prepare your business for a successful show season. First up, we'll chat with Jonathan Graham, owner of Compartes Chocolate, an LA based artisan chocolate brand founded in 1950. Jonathan began working at Compartes at the age of 15, and despite having no formal culinary or business training, he has grown Comparthes into an international brand of over 200 different flavors. Then we'll hear from Paul Erickson and Nico Cabral from Management One, the leading provider of retail merchandise planning, business insights and education to independent retailers around the world. First up, let's hear from Jonathan Graham of Comparthes Chocolate. Jonathan, welcome to Brick and Mortar. How are you? I'm excellent. I'm so happy to be here. Thank you for having me. Excited to have you here is like we have the modern day Willy Wonka among us. This is really, really a pleasure. Absolutely. I mean, I feel like, you know, with Compartes, we've created this Willy Wonka esque world that we really create these amazing confections. And from the beautiful packaging to the different ingredients and flavor profiles that we use, I definitely like that idea of modern Willy Wonka. And I will take it when you say that. Of course. No, it's just incredible. I think chocolate means so much to a lot of people. But before we get into any of that, I would love to hear where you're calling us from today. I am calling live from the chocolate factory. So we have our beautiful 6,000 square foot chocolate kitchen. I call it a factory, but it's really not a factory because everything is handmade. Um, it's all done the old fashioned way, but it's this beautiful facility, 6,000 square feet in the heart of Los Angeles in Hollywood. And this is my home away from home. Oh, incredible. Is there anything that you're excited for into the summer as the world kind of opens up a bit. Our stores, we have three retail stores in Los Angeles. When this of course started, our stores are still closed and I think we're going to open up this one here on La Brea, which is attached to the chocolate factory and kitchen. And what's so amazing is when you come into our retail retail store, on one side of the room you have all of our line of chocolate bars and there's on the other side you have a glass wall and see our beautiful chocolatiers hand making the items right on the other side. So you walk in, there's a glass wall and basically you're shopping inside the chocolate factory. Yeah, this is such an amazing experience. Folks are shopping and they're seeing all this chocolate and they're seeing people actually making it. And so everything just feels very tangible. Absolutely. I feel like the future of retail is sort of like you have to have these experiences and have reasons for people to come in to the shop because of all the competition online temperates with our chocolate bars, it just is so visually appealing to people, you see, I see like we get tagged in a lot of Instagram posts from people on fair who have bought our chocolate and their customers are standing in front of their bar, you know, display that might be at the counter of their shop. And because it's so colorful and more vivid, it creates this experience which I think again, looking at retail trends, these experiences and multisensory sort of displays are what people are going to be posting about or want to go to somebody's shop for. Exactly. And I would love to understand all about the rich history of Kaparte's chocolate. Right. No pun intended. Tell us about the founding story and how you got involved with the company. Compartes has been in business since 1950. It's one of the oldest confectionaries in America that still makes everything from scratch by hand. We don't have conveyor belts, we don't have machinery. So every single chocolate bar is hand mixed, hand poured. Really. Our tagline should be handmade in LA with love. Because every single bar has so much love that goes into it. It's so human. There's all these touch points of people's hands doing the quality checks on it, making sure that everything's perfect. So Compartes has this real rich heritage and history for being a small independent boutique chocolatier. And we're now going on 72 years in business. The original owner was named Mrs. Compartes, who started it and my family bought it from her when I was about 15 and it was a traditional chocolate shop. Think about what you would see at a boardwalk that made fudge. And we sold stuffed animals and gummy bears. And I've always been a foodie, right. And I love art and I love design and I love style and I, I love la. So as a kid, I started just tinkering around with recipes and my family was like, oh, you know, we don't really want to change the status quo, but they let me do a little bit. And then it started to get more and more attention and food and wine somehow tasted our chocolate and said it was the top 99 foods in America. I believe it was the only chocolate on that list. Yeah. And then when I was 21, I had created this line of truffles called Jonathan's Signature Truffles. And Bon Appetit requested a box to sample. Long story short, they had a tasting and it was the only chocolate to ever get a perfect score from Bon Appetit in the history of the magazine. So that sort of put us on the map. And then from there, when I was 24, I took out a loan at the bank and I bought the company from my family because I decided this is what I love to do. And obviously I was passionate about it, creating all these recipes. And at that time I was focused on the chocolate itself. The packaging really was non existent at that point. But then when I started to think about how I can grab people's attention on a retail side and differentiate my product, I started designing all of these beautiful, whimsical, colorful, really personal and special designs and chocolate bar boxes that would appeal to me. And basically going from 1950 where we had Marilyn Monroe, Henry Kissinger, the Kennedys, Frank Sinatra, Elvis Presley shopping at Compartees, it had lost its luster. And then I came in, revamped everything, kept the name the same. And I created a modern day chocolate company, something that I would be excited to buy as a customer. I remember seeing that live stream from the fair winter market earlier this year and I saw how passionate you were. It was actually very, very inspiring. I bought some chocolate and literally it was the best chocolate I've ever had. And I'm not even a big chocolate guy. Legit. I destroyed the three chocolate bars that was in front of me and it was just such an incredible experience. Thank you. That validates to me what I'm doing and my focus. I've really just been focused on chocolate. You don't see Campartes doing a million other different things. I've spent 20 years developing these recipes and this sort of brand into your go to place for chocolate. I mean, you know, to hear that it's the best chocolate you ever tasted is. It puts such a huge smile on my face because this is my passion. This is. It's my life's work. And again, even just having our 15 chocolatiers that hand make this stuff, they. Some of them have been here for, you know, 13, 14 years. They've grown up with me, they've grown up with this business. What are you most proud about as a person who bears the responsibility of continuing the Capartes tradition? What does that mean to you? Honestly, I'm really proud to be in so many mom and pop boutique retailers. It might sound corny because that's what we're talking about. Fair. But it's actually true. That was my family's business. That still is my business. We're a small company. Even though you can find our chocolate in so many places and it looks so perfect, it's all done by hand. I have to say I'm pretty proud of, like, some of the achievements. You know, Oprah has always been a huge fan of compartees, and she's put us on her favorite things list. It's just amazing to think that I am this small business and I don't have a staff of people on doing marketing. I have zero. I have no salespeople. It's wow. It's incredible to me. And again, it's just like I feel like I found my calling with compartees, and I feel like the brand has really found its footing and I want to continue just on the same trajectory and continue doing more and making more delicious products for people to enjoy. What does the day in life look like for you? Generally, in the morning, I taste everything to make sure about the batches. So I have these little tasting spoons that I'll go around and taste through the different things that the staff is making. And I make sure that it has enough ingredients and chunks. I mean, that's what we're really known for, right? So the donut bar gets all these fresh chunks of donuts from my favorite donut shop here in la. Or we have the birthday cake bar. And I always have to make sure there's enough sprinkles. So, like, every time I walk by the machine, I dump more sprinkles into the machine and then I come and I generally will print out all my online orders. You know, we're a small business, so we have two or three people in Our shipping department. So I'm doing anything that's needed. I generally will do all the shipping for fair. I like doing it even though I have people that work for me that could do it. I really like seeing the product go out. I like seeing this creation that I've made be successful as a person that. Doesn'T come from a culinary background inherently. Right. How did you go about creating some of these new tastes and flavors? I didn't go to culinary school. I haven't gone. But in terms of culinary, I really think that chocolate is something that's so much a part of our consciousness, it's related to memories. And I feel like chocolate is a food, really a good, a tangible good that transcends all boundaries. Every country, every person in the world experiences chocolate in some way, shape or form, whether you're in England and you're eating Maltesers or you're eating Milk Duds in the United States. So I thought, how can I take these flavor profiles and elevate them using gourmet ingredients? So it's using, you know, I've sampled 200 different chocolates in order to get to my unique Camparte signature chocolate. That is what you taste in all the bars. When I'm using strawberries, I'm going to the farmer's market here in LA and getting, you know, organic strawberries from my favorite farmer that we use in the bars. So it's taking all of these, again, nostalgic flavors, flavors that I know people love, and elevating them by using really high quality ingredients and recipes that are very unique and special and evoke that feeling and that emotion, that chocolate, it just makes people smile. Where do you look for inspiration when developing new flavors? I feel like Temperature's is very much inspired by la. I think that no matter where you see our product, which is really a unique thing for a brand and a product, whether it's in Omaha, Nebraska, or in New Jersey or Mississippi or Louisiana or or Portland, Oregon, you can tell this is that LA Chocolate Company. There's a sense of fashion to it. There's a sense of style, of art, of design. You've got the palm trees on the chocolate bars. A lot of them are drawings of mine. The S' mores bar has my dogs on the back. And why give normal chocolate when you can give chocolate with flair? Chocolate that's special, chocolate that's personalized. I feel like the line itself, all the bars with the different colors and flavors and stuff like that, it feels personal. And with so many different flavors, there's Something for everyone, which is why you see multiple bars in one transaction. What you're doing with the chocolates is so reminiscent of the city. And it's really cool to see how you're infusing all of that into the chocolate. And I know you mentioned before a bit about sourcing your ingredients from strawberries from organic and local farms and farmers markets. What do you usually source the ingredients for for your new flavors and your chocolate? I source them really from whatever my favorite things are. I always try to shop local with everything. So again, it's like the brownies actually in our brownie bar. A lot of our staff makes the brownies at home. We have this pecan pie bar that we do for the holidays, which sold out last year on Fair. So everyone get your orders in soon. But that pecan pie, I actually made the pies at home that we put into the bar. And I feel like that's what people come to compartes for is the really high quality ingredients coupled with the gorgeous design. I want to switch gears just a bit into navigating wholesale. What has been your experience navigating the process of selling wholesale and how did you actually fall into Fair? So originally I never set out to do wholesale, but the demand has been so huge that I would receive all sorts of emails. You know, I was getting 10 or 20 emails a week even before I joined Fair, of people that wanted to carry our products. And I would say five years ago, I wasn't able to accommodate a lot of the wholesale requests that I got because we were a lot smaller every year that my business has been going and that I've owned it, which is now 10 years since I bought it, I reinvest into my business. So that was a huge investment to create this business, beautiful 6,000 square foot chocolate facility and being able to keep up with the wholesale demand. And we're sort of new to Fair as well. We only started in October and we do get a lot of orders on Fair that are for thousands of bars. It's incredible the reception that I've got from the Fair community and all of these independent store owners. It's quite amazing to see this great community that Fair has built and cultivated. I think a lot of folks on Fair, and I can't speak for all retailers, just the folks that I got the privilege to work with, they really look for authenticity in the story and the narrative and the commitment from the brands that they partner with. Right. Because it's a reflection of their brand, of who they bring in. And I think that's probably what is resonating so much with our community. I read the reviews that people write on Fair and the things that people write about the brand. It touches me because this brand is me. This is what I love. After the winter market that we did the Live from the Chocolate Factory, I would call people if we're out of stock on an item like we couldn't, you know, we ran out of the packaging or something is taking longer to make in a batch or whatever, which doesn't happen often. But there was such a huge response from that winter market and I was calling the customers and they were shocked that it was me calling them. They're like, I saw your video and da da da da. And they were giving me suggestions on bars to make and telling me how much they love my story and love my product. And it was really touching and amazing to think that these people on the Other line, my story has resonated with them so well. Have you done any in person trade shows or what was your experience like selling at trade shows? The Winner Market on Fair was the first sort of trade show that I did and it was phenomenal. I think that opportunity for people to come into the Chocolate factory was so amazing because they can see the bars, which you can't really see from a picture on my Fair shop. So I think that was really special and unique. And that actually to me, and I could just speak for myself, is probably a much better experience than going to a trade show in some big convention center and giving a sample of something to a million different people because they were actually able to see the products being made and to really interact with me one on one. We had that chat feature going on and things like that. And I love also interacting with customers. We'll give people ideas on how to display things. I send them sometimes pictures from our displays. So it's quite interactive and amazing. And I feel like maybe a traditional trade show wouldn't necessarily be the same. I don't know. I've never done a traditional trade show. And some of the reasons behind that was a. It's cost prohibitive for a small business like mine and mine is a small business. To rent a booth in one of these conventions a lot of times is quite expensive, number one. Number two, I also feel like Fair curates the brands that are on Fair in a very good way. And all the people that are buying my chocolate are stores that I think are cool. So I would want to go into them, but I wouldn't want my chocolate to be sold at Target. I want to sell to like minded stores. I know it's your first time participating in any trade show. What advice would you give brands that are participating in a virtual trade show for the first time? To make sure that you get ahead of your assortment and make sure that you have a lot of inventory on hand before you start with the trade show and that you have a big assortment. I have so many options on Fair. I've seen a lot of other brands that don't really have a lot of products on Fair. And I think that the more products that you offer, the more chance you have to catch attention of buyers. I love Fair and I really, really appreciate Fair and the value that it brings to my business. What is your promotion strategy for your wholesale line? So we did a promotion during the fair winter market. I would probably do a promotion on a future market because it did really help increase the sales. But I don't really do promotions but really on the wholesale side. If you think about it, my company, I set it up to be retail. So the cost of these amazing, beautiful chocolate bars is really, really high. I don't have a lot of movement in between my wholesale price and doing a promotion on top of that. In fact, I've never really done the math but I probably lose money on a promotion. But it's just worth it to get into all of these stores. I think for the what you're getting for compartes, it's got a very, very, extremely high value and the price point is actually reasonable and, or maybe even low. You know, we've been sold for 9.95 for our chocolate bars for 10, 10 years. I don't ever want to go more than the $10 mark. So I think in terms of promotions I'm very strategic to when I use a promotion and if I do a promotion it's a very short lived, quick promotion just because I feel that the value is already so good. It's Pride Month. Are you celebrating with Capartes? So for Pride Month we're going to have a tie dye chocolate bar which is really exciting. I've been working on this for a long time. I designed this amazing tie dye packaging. I and the chocolate itself is going to be tie dyed. So it's going to be yellow, orange, blue and pink I think. And each one of those colors is a different flavor. And then Jonathan, me personally is going to hand swirl all of them and it's going to be special, unique, I mean rainbow tie dyed chocolate bar. You tell me what customer would not like that? That's so cool. Finally, where can our listeners find comparthes? Our listeners can find compartes in all of your wonderful boutique mom and pop shops that are part of this amazing fair community. And obviously, compartes.com, our website, our Instagram page, ompartes. And so stay tuned because a lot of new stuff's coming and and I want to continue on this great journey that I'm on with all of you and continue doing what I love. Jonathan, AKA modern day Willy Wonka, thank you so much for joining us here on Brick and Order. It was my pleasure. Thank you so much for having me. That was Jonathan Graham of Cooparte's Chocolate. Thanks, Jonathan. Now we're going to hear from Paul Erickson, director of sales and Nico Cabral, director of marketing from management 1. Paul, Nico, hello. Thank you so much for coming to Brick and Mortar. Thanks, Clarence. It's great to be here. Where are you all each calling from today? Well, I'll go first, Age before beauty. I live in Minneapolis, Minnesota. I'm joining TODAY from Redondo Beach, California, just outside of la. Now that the CDC has started to lift restrictions, what's the one thing you each are most excited to do this summer? Yeah, I actually have two. One of them, I love outdoor music and not being able to go to a concert for the last 13 months has been pretty crushing. And I'm looking forward to my next show at the Hollywood bowl for sure. The second one is going to Magic in Vegas. It's something that I look forward to because Management One is a virtual company. We always have been. And shows like Magic twice a year are our opportunity to see not only clients and colleagues, but co workers. And I'm looking forward to seeing Paul in August for sure. Well, that's a first. Let me just say that two things, Clarence. Number one is I am going to go to Manny Steakhouse in downtown Minneapolis and get a big ribeye steak because that's something that I've really, really not had for a year, over a year now. So I'm looking forward to that. And a martini and a really good glass of red wine. Let's start right there. That's number one. Number two is two weeks over Memorial Day weekend, I'm flying down to Kansas City to see my new granddaughter, which is going to. She was born in January, so I'm kind of excited to meet her for the first time. And as is all our family, we're all congregating in Kansas City that weekend. Wow. Yeah. Congratulations on that. And Nico, I agree with You, I think I just feel like once everything kind of opens up and we have concerts and people are fully vaccinated, et cetera, I think we're going to have a really, really fun summer. Can you tell our listeners who may not be familiar with your work what management1 is and the kind of work you do? Essentially what Management One provides is merchandise intelligence for independent retailers. And we do that through education. We do that through our proprietary software called Retail Orbit. And essentially we get retailers focused on their cash flow, inventory, turnover, and we provide them with data forecasting that they simply cannot get from things like their POS or their accounting software. And it's a one on one, in depth coaching session each month or each week, depending on how the retail expert wants to structure it. And it truly gives them a level of information about their business that they just never had before. 50% of our client base are single store independent retailers. Our fees are commensurate to how big you are. And so we have clients that, that are very, very small and we have clients that have 20, 30, 40 stores. But what our clients all have in common is their family businesses. That's who we help. And it's a month to month service so that if we do not deliver what we say we're going to deliver, which is to increase their sales and increase their cash flow, then they don't need to keep paying us. And so we're very, very accountable to our client base. Based on that, a lot of our. Customers are focused on financial planning and preparation for the summer. Can you share your predictions about what the retail industry might experience this summer? This has even surprised the folks here@management1. We anticipated a fairly rapid recovery once the general population started to be vaccinated and people felt safe again to go out and visit stores. What we have been surprised is how fast and how large this spike and retail sales has been. It's not just our clients. At Management One, we work with over 1,000 retailers, all independent retailers. And so we have a perspective that you don't see on the Wall Street Journal, which are just dealing with probably publicly traded companies, large national chains. And we can share with you that the independent retailer is doing very, very, very well right now. In fact, surprisingly well. We're looking at sales gains in April, almost over 20% from what April was in 2019. So the spike has been RA. Rapid shopping is social, Clarence. As you know, buying online is not. People are craving that human connection again. And that's what they're, they're sitting on a lot of Cash. Nico and I have talked about this a lot over the last year and how the savings rate has mushroomed in the United States to. I think the last number I was reading was that there was 1.6 trillion with a T dollars in savings now at the end of the pandemic, that was not there at the beginning. So people had no place to spend, nobody went on vacation, no one's going out to dinner. And so all of this has created a, I think in some ways, maybe a once in a lifetime opportunity for independent retailers to be ready for this. And it's exciting. Retailers are in a good mood finally, you know, which is also good for us. And I think that the summer is going to be absolutely fantastic in terms of business. Wow. And so the real question, I think, Clarence, is how long does it, this spike due to pent up demand Last@management1? We believe that this spike we're dealing with right now has some legs and we think it will last through the end of 2021. How do you advise retailers to take advantage of this phase of increased spending? One of the things that we have seen is that a lot of retailers have discovered that pre pandemic they were carrying too much inventory. There was a book written about 15 years ago that I talk about a lot by Barry Schwartz called the Paradox of Choice. It's a book on psychology, human psychology, and how the fact that if you present people with too many choices, they simply cannot choose. And there have been many, many studies that have been done on that since then and have proven the point that as a retailer, you think you want a lot of choices for your customer when they come in to shop. The reality is, is that if you do that, you're actually inhibiting the amount of business you can do. You're making it more difficult for them to choose. And what we found during the pandemic is that was very, very much true, that our client base was doing a surprising amount of business even during the pandemic, with a surprising low amount of inventory. So they were turning their stocks very, very fast and actually did quite well. Not in every Clarence, it wasn't in every vertical. Certain verticals struggled more than others, there's no doubt about it. But overall, I think that the one thing that retailers really discovered is I don't need as much inventory to do the business. In fact, it's actually been a benefit that they can sell the inventory more quickly, then the customers come in more often because they're seeing more new and consequently they can continue to grow profitable sales. I always lean on the marketing side just because I come from the marketing background. If I'm looking to tell people where to spend their money as it comes in, I always look at customer connection. Because one thing that brands did lose in the pandemic is loyalty. And their customers were being pointed in so many different directions online that you really need to invest some of this revenue coming in into reconnecting with your customers. How are you going to get them back? How are you going to bring them back into the store and grow your audience? I think it's the greatest strength of independent retail. I mean, big box stores simply cannot compete with the local mom and pop in terms of customer connection. I think Nico makes a really good point. The loyalty thing is very, very important, always has important. But even more so now, I think that independent retailers need to understand that people would rather shop from an independent than they would a national chain. National chains are large monolithic organizations. But the independent store in your community, you need to tell them that you're independent. You need to tell your story. That hearing a story is actually triggers like dopamine and chemicals in the brain. That's chemicals about good feelings, and it makes us feel good. And so anything that independence can do to talk about them and they're part of the community and giving back to the community, all that kind of soft marketing was important. But I think post pandemic is even more important than ever before. So, based on, like, learnings from the pandemic, what metrics should retailers be focused on heading into summer 2021? There have been for decades, eons, certain metrics that retailers have always looked to to really judge how successful they are and how profitable they are. And I think that the pandemic has changed the suite of metrics that they were using because they've become somewhat out of date. We lost 20,000 doors in the last 12 months. You know, a lot of people thought, well, there was department stores. And then a lot of people said, well, it was stores in malls that really had difficulty, or it was luxury stores. And really, in every one of those cases, Clarence, at management, we saw, yes, there were a lot of failures in those verticals, but there were also a lot of successes. But one area that everyone had in common was on the balance sheet. And retailers that were carrying too much debt really struggled during the pandemic. In other words, that that debt, with a combination of sales declines, crushed them. So the suite of new metrics, we think now that we're leaving the pandemic, that all retailers should be Looking at has less to do with profit and more to do with cash flow. Now, you might think in a retail store those two things go hand in hand, but they really don't. Any retailer can go months upon months and upon months without showing a profit, and many, many do. But you can't keep your store open a day without cash. And so the new metrics, we believe, have everything to do with cash flow. For example, instead of gross margin on accounting, which, which deals with cost of goods sold, which is essentially, I think, a very misleading metric in accounting because it is what it says. It is the cost of the goods you sold, not the cost of the goods you purchased. So one new metric is cost of goods purchased or cash margin, not gross margin. And then off of that, we can, we can look at return on investment. And it used to be gross margin, return on investment. Now is cash margin. Everything has to do now, I think with retailers really watching their cash flows, and that is tied exactly to how they handle their inventory position so that they don't get back into the bank too deeply and keep the inventory coming in and going out quickly. And honestly, just having a more manageable inventory just makes your life easier. Honestly, it just really helps you and your staff really understand what do you have and what you need to move and what we should be prioritizing as a team. I think, Clarence, it gets down to, you can't be everything to everybody. And so every retailer is going to have to decide who their customer is and not try to. In inventory control, we call that wide and thin inventories. And what every retailer needs to do going forward is who is your customer and how do we go after that customer with a narrower targeted inventory that we can sell quickly. As it turns out, you don't need 15 colors of one particular T shirt, for example. It's just too much. How are you coaching retailers to adjust their strategies? Given the increased focus on cash flow. I think that retailers need to take a hard look at what they're carrying. The thing the pandemic has done is that we have shifted emphasis on what we call at management classifications of merchandise. In other words, some classifications were a lot stronger pre pandemic than they are even post pandemic. And that gets back to, again, not carrying such a broad array. Nico just mentioned 15 colors. And it also may mean not carrying 15 sizes. Sometimes, Clarence, the retail narrative that we hear out there is not always right. Sometimes you have to zig when other people zag. And really successful retailers, I think, understand that. And those are the retailers That I think that they have the opportunity today if they're willing to take some chances and understand who their customer really is. We call it failing fast. And when we look at the data trends of particular products, you can see what's selling and what's not. And don't be afraid to just say, all right, this one's not selling, get it out of here. It doesn't matter what kind of retail store you have. The problem that retailers have when they know they make a mistake on inventory. In other words, they bought wrong. Clarence. They know it's a mistake, but they listen to the bad accountant on their shoulder who says don't take a markdown because you're going to lose money. So try to sell it at full price. Well, at some point, you know it's not going to sell at the current price you have it at. At that point, you have to completely forget about making money on it. Making money is no longer part of the equation. What, what now becomes paramount is getting your money back as fast as you can. In other words, taking a markdown that's going to get rid of it right away. Markdown in a retail store is not a zero sum game. It would be a zero sum game if you had a shelf of bad products. You took it and marked it all on, half off and then the shelf sat there empty for the next six months. Well, yes, then you would lose a lot of money. But the point is that's not going to happen because now those shelves are being replenished and so now you bring in product that you can make money on, make margin on, which mitigates the markdowns you took. This is also part of the new metrics that we're looking at post pandemic that the retailer has to think about. And so markdowns, while they are an expense, they are an invisible expense because you don't write a checkout for them. They also though can be a very big asset if you know how to use them. And I think it's also something again where we talk about the strength of independent retailers over big box stores. Independent retailers have the ability to have that agility over big box stores. There's not the same bureaucracy as far as what type of markdown we're going to apply. Well, we can't really get rid of this line because the overall brand has a relationship with the wholesaler. Independent retailers can make decisions like that and they can kick products out that aren't working much, much faster. Agreed. Knowing who your demographic is and being okay with targeting Those folks specifically helps you know your brand as well, because people can actually understand the type of folks that you're trying to attract. How can shop owners regain or build back their confidence in their business? Well, we actually did a webinar on that exact topic. We called it getting back on offense. And you're totally right. For the last year, we've been telling people you're way too over leveraged, you have way too much inventory. There were supply chain issues with inventory and it really got people in 2021, it got them scared to bring anything new in. And now I think the pendulum has totally shifted the other way and they're not buying enough to actually fulfill this spike in demand that we're seeing. So we're trying to get people, I guess that's one of the main things that Management one does. We try to really keep them in the rails. So don't go too far left, don't go too far right. We try to keep you right in the middle. And that's going to be the challenge right now with this spike in demand is getting people back on that buying train. It's just a matter of getting them to buy intelligently instead of going crazy and buying everything that they think is going to sell in the store. And I think too, to your point, it's just really getting back on that horse. It's just really, just doing the thing and just talking to your community members, talking to your social platform and just asking folks what they want to see. They'll tell you for better or for worse, they'll definitely let you know what they're looking for. And don't be afraid to source from local sources in the community or don't be afraid to source brands that nobody's ever heard of yet. Take a chance on a brand and if it hits, go with it. If it doesn't, again, we go back to agility. You can kick it right out. Yeah. And just to quickly plug fair here, that's why we offer those nasty terms, those free returns. It offers flexibility and freedom. Any parting words for our retailer, community? I think that, you know, they need to get back in the saddle again. I. I do not think we can underestimate the trauma that independent retailers have experienced over the last 12 to 14 months. The fact that anyone listening to this interview is probably still in business after going through maybe the most difficult period in the history of retail in the United States, certainly since the Great Depression, means that they are all survivors. They are all people that have made it through. And the silver lining to what we've gone through is that we are now, I believe, gonna go through an era of unbelievable growth and prosperity and potential for every retailer out there. That's going to be their reward for being there. They have to have the confidence in their business. They have to have the confidence in themselves. So that would be my parting words for the retail community. The future is in your hands. You survived this and now let's go out and start really making money. That's powerful. I would add to that and say that it's as difficult as this was in 2020 for retailers, it really was a wake up call. And one of the things pre pandemic that was really just annoying for me to hear was this idea of a retail apocalypse and how retail was dying. And it never was. It was always a myth. The idea of independent retail has a lot more value than even the independent retailers know. Their importance in the community is something that is now quantifiable. And I think as people come rushing back in after this pandemic, you're going to see how important these businesses are and truly embrace it. Finally, where can our listeners find Management. One on the web? Management1.com is the first place to start. The other place would be on YouTube. We've in the last year, thanks to the changing climate here, we've developed a series of webinars as things, especially in May and June, April, May and June last year, when things were changing by the week, decided to put out a webinar that really just provided information to really give folks a North Star in this crazy time that we were living in. So folks, definitely take a look and reach out to Management one. Thank you all so much. Thank you, Nico. Thank you Paul for joining us today on Brick and Mortar. Thanks. Thanks Clarence. It was a pleasure. That was Paul Erickson and Nico Cabral for management 1. Thanks you2. That's all for this episode of Brick and Order, a podcast from Fair. This podcast was recorded in Los Angeles, edited in Brooklyn and Denver and can be downloaded wherever you listen to podcasts. Follow us at fairwholesale on Instagram. And if you're a brand hoping to start selling On Fair, visit fair.compodcast to find out more about Fair's upcoming market events. Visit fair.com markets thanks to our production team, pod people. Rachel King. Matt Sav, Erica Huang, Madison Lusby, Michelle o', Brien, Lizzy Goldsmith. I'm Clarence. Thanks for listening.