How I Grew A Men's Pouch Underwear Line To $1M/Year

$100,000
revenue/mo
2
Founders
0
Employees
product
SHEATH LLC
from colorado springs
started February 2014
$100,000
revenue/mo
2
Founders
0
Employees
443K
alexa rank
12.8K
followers
18.5K
followers
311
subs
platform
email
customer service

Hello! Who are you and what business did you start?

Hello, my name is Robert Patton and I am the CEO of SHEATH, a premium men's pouch underwear company that sells to active men in over 74 countries.

If you are not familiar with pouch underwear, our original design has what we call an inverted kangaroo pouch for your joey located inside of the garment to separate the package from the inner thigh region. Our latest models now feature a similarly-designed dual pouch which offers separation not only from the inner thighs, but also for the penis from the testicles, keeping everything dry and comfortable.

We sell mainly men's underwear, but recently introduced the women’s line and we are currently generating over $4K a day in sales with that projected to double by end of summer 2019.

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What's your backstory and how did you come up with the idea?

In the beginning, it was an idea based out of necessity. I couldn’t find the product I wanted so I created my own. At the time, I was not strapped for cash because I was in the Army, but I was only making about 50 grand a year risking my life for a cause I no longer believed in.

You have to find what works for and motivates you to keep going day in and day out for as long as it takes. Are you willing to sacrifice 20 years to dedicate to this dream without pay? If not, then you may not have what it takes, if so, you do, and most likely it won’t take 20 years.

The idea

It was in Iraq in 2008 when I was on my second tour with the Army 111th Quartermaster Company. As you can imagine, it was hotter than the devil's balls. This time I was in Tikrit and I was on mission.

My biggest problem was that I couldn’t help but be annoyed with my underwear situation at the time. The underwear I had been issued were old, loose, saggy and coarse like sandpaper, making my situation downstairs a hot mess with extreme chafing and discomfort. In fact, it was so uncomfortable that I had a “necessity is the mother of invention” moment and I conceived the idea that if everything downstairs (the junk, package, boys, frank and beans etc) was separated, this would eliminate skin-on-skin contact, thereby reducing excessive moisture and improving comfort significantly.

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So while testing out my prototypes, the boys were now being kept cool and dry rather than compressed and constricted under hot, dark and moist conditions for long periods of time, which, for anyone, comes with undesired consequences, i.e. persistent rashes and/or excessive need for re-adjusting.

A failed business in my past

Being that I was in the army, I had no background in clothing construction development or design, but I did have a background in inventions. I actually, unofficially, invented crazy keys back in 2000. Yes, the keys that have your favorite football team or Disney character on them.

I had the idea back in 2000, but quickly gave up after a few months because it was too hard to do the way I wanted to manufacture the keys. Rather than painting the design on, I had envisioned it engraved on the key, which overcomplicated the invention, and ultimately, because it was too complicated, couldn’t find help, so I gave up.

This was also prior to reading the book that changed my life, Think and Grow Rich by Napoleon Hill, which would have taught me never to give up at the first sign of defeat. Unfortunately, or as fate would have it, I did give up at the first sign of defeat, as many often do. But the experience wasn’t a total loss.

What I took from that endeavor was to keep things simple. Don’t over complicate things. I applied this when conceptualizing SHEATH. Keep it simple. Had I figured out the paint on the key idea back in 2001, which I had actually tried once but with too thick of paint that would constantly chip off, I would have succeeded and my life would have turned out very different - I would have been the key guy with kiosks all over the world in Walmarts and Home Depots, but now I am the underwear guy.

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Both are cool and I love my current position, but I never forgot my first major invention that failed. Particularly when I saw a “Crazy Key” in a store about 5 years after I had given up, I felt like I got punched in the gut… Fortunately, I was in the Army at the time so I didn’t dwell on it and it wasn’t long after that that I had the idea for SHEATH. So to reiterate, I didn’t have experience at all in underwear or fashion, but I did have experience with inventing and was now armed with the knowledge of keeping the idea as simple as possible and not giving up at that first sign of defeat.

The lesson is, in the beginning, keep it simple. Baby steps. It is the key to starting a business. Many people over complicate the matter so much in their mind that they never even make the first move. There is always time to expand on the idea later, once you are solidified and making enough money to turn the cogs of the business.

Research

Before moving forward with my pouch underwear idea, I did some research to see if the product had already been invented.

I noticed on google patent search that in 1981, a man in China invented something similar, and therefore, I didn’t think I had the option to make a full Utility patent, so I decided to create a design patent to provide some protection.

Note: Design patents are essentially useless unless you are designing a new shoe. If you are designing something with functionality, you need to attain a Utility patent.

With or without a patent, I knew the idea was good because when I would tell friends about it, they unanimously agreed that it was a clever idea. Never did someone say to me, “this is stupid”, aside from the obligatory skeptical family members that felt like I was throwing my life away. (When starting a business or taking a professional risk, be prepared for some of those closest to you to be the least supportive. It’s not always the case, but if it happens, waste no time trying to convince them or change their minds. Drop their opinion and move on. It is a sad truth.)

I also knew it was a good idea because I loved the result and it worked. Speaking of the idea, let me explain in greater detail what it is and then I will get back to how I knew it was a potential game-changer.

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The idea itself is simple; an isolative pouch on the interior of the underwear for the groin region. We describe it as an inverted kangaroo pouch for your joey, a hammock for your soldier, a holster for your gun, a sheath for your sword. These descriptions quickly cue people in on the functionality of the underwear, which is to isolate the male anatomy from the inner thigh region, thereby eliminating the need to readjust by keeping you cool and dry. They look like regular underwear on the outside, but it is what we’re packing on the inside that makes the difference.

I noticed on the United States Patent and Trademark Office search that similar inventions already existed, but nothing quite like what I had in mind. This lent credence to my design, as I now knew that others had been on the same track of thought and that there was clearly a demand to be met.

Take us through the process of designing, prototyping, and manufacturing your first product.

Initially, I hand-stitched together some extremely raw prototypes (zero sewing experience) while I was on tour in Iraq. You can see one below.

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When I got back from the war, I bought a sewing machine and began playing around with new designs.

Eventually, I found a seamstress that would help with making the initial prototype. This was in 2010. I then went onto a website called mfg.com where I was coupled with manufacturers that bid for my contract.

I ended up going with a company in Pakistan. The guy called me and told me he would walk me through the process. It was great, but I was too excited and incidentally rushed production when the product samples weren’t ready - the pouch was too high. This set me back a good three years.

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Note: Never rush production, especially not the one you intend to launch your new business with. You will want to because you think you have to rush to get your product to market, but if you rush it and it’s not right, then you will wish you had been more patient.

That being said, everything happens for a reason. I was still enlisted in the army and married at the time, so having a budding business while going through a divorce wouldn’t have been in my best interests anyway.

The setback allowed me to regroup on my personal life. I got out of the Army and went back to college by utilizing the Post 911 GI Bill to attain my Bachelors in Organizational Development, followed by a Masters in Business Administration from the University of the Incarnate Word in San Antonio TX.

At this time, I had also been working as a tailor’s assistant to learn the craft of garment construction, deconstruction, and reconstruction. I created new prototypes during that time which brings us to 2013 when, finally, my small team and I did our first Kickstarter to help us finalize the payment for our next production.

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We found that hundreds of people were willing to back the project and get us funded, proving to us that we really had something special on our hands. By the end of the campaign, we were feeling like we were on top of the world. We sent out products to hundreds of satisfied customers who then reordered more pairs and we used those earnings order our next batch of product. Production was well underway and sailing was going to be smooth, or so we thought.

Unfortunately, it seemed we had put all of our eggs into an unreliable basket, yet again. Bad pouch placement and riddled with inconsistencies… The new shipment was virtually unsellable. It seemed like an unmitigated disaster and yet another major setback. That’s when I felt it, the same feeling that cost me my designer key invention. Defeat. This is where my new sense of faith and persistence came into play. The old me might have folded at this point, but I didn’t even flinch. I was not about to let it stop me again.

We took our lashes, made things right for our customers, assessed our strategy and moved forward. We were able to get 35% of the cost back from the faulty manufacturing, but this was not enough to make a new purchase with a new manufacturer. After a year of hard work righting our wrongs and perfecting our approach, we sourced a new manufacturer to produce our newly revised design and decided to attempt another crowdfunding campaign. This is where we really kicked into high gear.

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The results may not seem like much, but, since the completion of our 2014 Kickstarter, we have yet to go a single day without sales.

When you fail to quit, the universe will do a funny thing. It will actually acquiesce to your desire, though it will test you. When it sees that you won’t give up no matter what, it seems as though the universe will just kind of give in. What that meant for SHEATH was the discovery of a new production company that specialized specifically in men's underwear and had the bandwidth to work with us.

They asked if they could make a sample for us, so I sent them one of our existing samples to recreate. What we received in return was noticeably better than what we had sent them. This gave me a great sense of reassurance. I knew that this new and improved SHEATH Underwear, which we coined as SHEATH 2.0, was exactly what we needed to solidify not only our revolutionary concept but our reputation as a company that offers reliable, quality-crafted products.

A true concern for quality, along with treating every customer as if they are your one and only, are the key ingredients in creating a successful business. When you have a high-quality product, a supportive team, impeccable customer service and healthy margins, the rest will take care of itself.

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Describe the process of launching the business.

The beautiful thing about launching a business is there really is no right or wrong way. There is no definitive procedure or rulebook that you must follow to be successful. This is because you never really know what obstacles are going to reveal themselves until they do.

Everyone’s path to success is different, but they all have similar characteristics: an extreme desire and faith that it will work; persistence and the ability to visualize ahead of time; writing down the goal and breaking that goal down into manageable steps from start to finish.

We originally started in 2010 with the name SHEATH. The naming took us a few months. We started with Junk Drawers, but found that was taken. We then considered Packaged Jewels and Southern Comfort, but they didn’t feel right. We then began thinking in terms of the functionality and masculinity of our product, which is when we came up with SHEATH. The comparison of a sword being sheathed just as the male anatomy would be sheathed in our garments... it just made sense.

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Then we bought the URL sheathunderwear.com and started making social media pages, Twitter, Facebook, Instagram, Youtube, Tumblr, Pinterest. Etc. We didn’t take out any loans in the beginning. It wasn’t until we really began expanding and revenue started becoming reliable that we began utilizing loans to keep up with demand.

Fortunately, it didn’t cost a great deal to start the website and keep it running. Also, the majority of our team was working for no pay for the first few years, aside from free underwear, including myself. This is where the ingredient of a supportive team comes into play. You’ll find that the vast majority of self-made individuals always had a supportive team that believed in them and backed their every move.

We applied for patents and did all of this out of my pocket, but you would be surprised to find that applying for a patent yourself isn’t very expensive unless you get an attorney involved. For those on the fence about it, there was a law passed a few years ago that gives preferential treatment to individual inventors and requires examiners at USPTO to walk you through the process, therefore you could file for, and get, a patent issued yourself at relatively little cost.

This would be less than $1,000 dollars and could protect your idea from infringement by others. This can all be researched and completed on USPTO.gov.

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During the first 3 years, we saw very little sales and thus, very little income. They were sporadic. Normally, we would only see a handful of orders a month, but sometimes we would have none at all or even as many as 15 orders. We weren’t promoting it heavily because, at the time, we were still in the early production phase and our products did not possess a level of craftsmanship and quality that we were proud of, but we did sell them and the majority of people seemed to like them anyway solely based on the concept. It wasn’t until our Kickstarter in 2013 that we really started to see almost daily sales and, ever since the 2014 Kickstarter, we haven’t gone a day without sales and our annual revenue has been on a steady uptick.

The biggest lesson to learn from all this is to never quit. Once you quit, the game is over. As long as you don’t quit, there is always a way to overcome obstacles. Don’t quit, but don’t lie to yourself either. If your product is garbage, don’t deny it - improve it or pivot to a new item all together. On the other hand, if you know what you have is good, don’t cheat yourself from riches. If you truly enjoy and believe in your product, you will find a segment of the population that also likes and believes in your product, guaranteed. As long as you want it bad enough, you will be successful. The true question is, are you willing to put in the work and do you have the patience to stick it out? Are you willing to put in 2-4 years of work with no return, paying yourself next to nothing for the sake of growing the company?

Allow me to reiterate. Our company was founded in 2010, but we didn’t see any numbers until 2013, which was immediately followed by another set back. What little revenue we had generated was all lost again. I personally wasn’t getting a paycheck from my own business until 2015, and it wasn’t much. Even since then, I’ve only been able to pay myself somewhere around 50-60k a year since the majority of the money flows right back into the company every month for expansion. So my budget remains tight and my life is far from lavish, but my business is mine. You must be willing to sacrifice for the long term. If you are looking of a quick payout get rich quick business, good luck to you... We have been doubling in sales annually since 2013, and I believe this is all due to me and my team’s sacrifice of the short term payout for the long term legacy.

Since launch, what has worked to attract and retain customers?

Initially after the launch, we liked to go back to our Kickstarter campaign page every few months to give them updates and spark a response from our backers, but eventually, that ran dry.

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Advertising

The next source of patronage was Facebook. Facebook still, to this day, provides a majority of our site traffic. It may not always be the highest quality traffic, looky-loos who want to see pictures of people in underwear, etc... but visitors from Facebook continuously result in a fair portion of our sales.

We also use Google Adwords, but the problem with this is that we have already optimized our SEO to the best of our ability, so most searches that trigger the Google ads tend to organically bring us up in the top search results anyway. So this feels a bit extraneous at times.

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Targeted Audiences

We also use Criteo, a remarketing tool that helps us place targeted ads in front of individuals who have visited sheathunderwear.com but have not made a purchase.

Below is a graph of sales by month from January 2016 to April 2019. You can see the growth, which has been steady, and this can be attributed to ad targeting strategies, influencer marketing (UFC Fighter Donald Cowboy Cerrone), social media ads, google ads, email campaigns and more. We have also had the spotlight shined on us by going on TV, the Radio, sponsoring local sports teams (Colorado Springs Switchbacks) as well as outdoor expos and really anywhere we can get our foot in.

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Amazon

Amazon has also been a great platform for us to gain new customers as well as offering options to our existing customers who take advantage of Amazon prime. The annual growth in Amazon sales is less noticeable, however, as we have much less control over it compared to our other sales channels. In fact, our Amazon growth has been relatively stagnant the past few years, but we are actively developing new methods to rectify that.

We hope to one day have amazon rivaling sheathunderwear.com in sales, the current goal being $1 million sales monthly on each platform.

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How are you doing today and what does the future look like?

Currently, business is good and we are profitable. We are projected to reach a gross revenue of $2 million for 2019. I actually just got back from a Shark Tank audition, so we are not too successful to think that we couldn’t use their help. It’s worth a try and for me, this was my second attempt; the first being in 2013.

Compared to our first attempt, we are in a much better position with a far superior product and system in place with a large base of loyal repeat customers to maintain revenue and steady growth. These are things they might appreciate, but we are not counting on that making or breaking us. Regardless of whether we are on the show or not, we will be successful. We already are.

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When it comes to customers, the lifetime value is yet to be determined, but we have individual customers who have spent over $1,000 on our products. However, we have only just begun achieving this level of loyalty. We have a long way to go.

Regarding the cost of acquisition per customer with facebook and google, this varies, but I feel like an average would be about $10. We spend about $200 a day on ads. Whether it’s facebook, google or influencers, the combined cost is somewhere around $200. We will be spending more as time goes on. We are always making progress.

Regarding our current operations, we are no longer shipping out of our house as we had for the first 5 years. Last year in October, we moved out of the living room into a warehouse in Nevada, which places us in a far better position to scale. Prior to this move, we were very limited by the space in our house. With the new warehouse, we have full scalability for unlimited growth.

As far as the website goes, we average 1-2 thousand visitors per day and our conversion rate has always been about 1.5-2.0%, which we have found to be the industry standard. As of late, it has grown closer to 3 conversions per 100 visitors, which is an improvement. However, we would like to see that number continue to grow.

The majority of our sales are from sheathunderwear.com, about 90% of them. Fortunately, that is beginning to change as we are seeing more sales from outside sources as well as amazon’s steady increase of monthly revenue. Other outlets include wholesale accounts and Touch of Modern from time to time.

Through starting the business, have you learned anything particularly helpful or advantageous?

Building a business really tests you as an individual, as you must utilize essentially everything you’ve learned from all previous experiences up until that point in your life. This is particularly true when it comes to education (school or otherwise), team activities, previous jobs, military training, etc.

Building a business really tests you as an individual, as you must utilize essentially everything you’ve learned from all previous experiences up until that point in your life.

When you put in the effort to become familiar with and master something, and you don’t give up, you improve your likelihood for success with every moment you spend working at it. When you are driven to your absolute limit during a practice session, that builds the character and fortitude that you will continuously be falling back on when building your business.

The person that will be the most successful is the person that has the best ability to deal with discomfort and acclimate to new conditions. Sports, in particular, are a great way to train you to find comfort in discomfort, which is invaluable in all aspects of life.

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I’m reminded of a funny story of mine about luck and timing. After the first Kickstarter and after I realized that our replenishment inventory was faulty and not up to standard for sales, we were in a state of limbo.

I remember that I went to a Joe Rogan Stand up show in Austin, Texas around this time and two major things happened that night. One, After the show, when Joe was doing some crowd work, I - stupidly - through a pair on stage to get his attention. In retrospect, I realize now how disrespectful this was, but what is done is done. He picked up the underwear and read the package and said “SHEATH, A pouch for your package? This has got to be the stupidest idea I’ve ever heard of, or a billion dollar idea.”

I like to think it is the latter. I still have the audio of him saying that it was a billion dollar idea, but he has since rejected all attempts at sponsorship for his podcast, quite possibly and most likely because of my interrupting his show to introduce him to SHEATH. Although, I am also aware that he is a very busy person with larger fish to fry. I haven’t taken it personally. I would probably take it back if I could, but what is done is done.

The silver lining of this story is the second thing that took place. After we left the show, I was sitting at a red light in Austin and was rear-ended by a taxi. A couple of months later, I got a check from the taxi insurance company for $5,000. I was able to use that $5,000 for a down payment on a new production with our new manufacturer. The remainder of the money was raised through second Kickstarter and the rest is history.

So, in a funny, involuntary sort of way, Joe Rogan has played a part in the success of SHEATH.

What platform/tools do you use for your business?

We are currently utilizing Shopify Plus, but I am hesitant to endorse it as I am not 100% sold that it is worth the $2k a month we are spending on it. They sold me on 10x-ing if I switched to this upgraded platform, and it’s looking like we are most likely going to 2x or 3x for the year, which we’ve been doing on our own all along. If we do officially 3x, then that would technically be our biggest growth spurt yet, but it is hard for us to tell at this point in time if we can attribute it to this platform.

We also utilize Klaviyo as our email marketing platform along with Gorgias as our customer service tool. We recently switched to these apps from MailChimp and Zendesk respectively, as we have been advised that these new apps have better track records in aiding budding businesses.

What have been the most influential books, podcasts, or other resources?

Here is a short list of my major inspirations that I frequently find myself thinking back to and learning from:

  • Think and Grow Rich
  • The Secret (the original movie with Abraham Esther Hicks)
  • Tony Robbins
  • Tim Ferriss
  • Joe Rogan

Advice for other entrepreneurs who want to get started or are just starting out?

My advice for anyone starting out or looking to get started is to read Think and Grow Rich because it really sets a solid foundation while also leaving some of the message up for interpretation for each individual.

I also find that the movie, The Secret, has some value to watchers if you can open your mind up to the possibility that thoughts are energy and affect your reality. Thinking positive attracts positive things to you. There is a lot involved in being successful. Some people look at it like a formula, some look at it like magic, some people do a combination of the two.

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Everyone’s path to success is different, but they all have similar characteristics: an extreme desire and faith that it will work; persistence and the ability to visualize ahead of time; writing down the goal and breaking that goal down into manageable steps from start to finish. My most concise tidbit of advice is this - start and don’t quit until you figure it out. Once you quit, it’s over. There is always a way, you just have to find it.

You have to find what works for and motivates you to keep going day in and day out for as long as it takes. Are you willing to sacrifice 20 years to dedicate to this dream without pay? If not, then you may not have what it takes, if so, you do, and most likely it won’t take 20 years.

Are you looking to hire for certain positions right now?

People sometimes ask if we are hiring. For the most part, we only hire from within our circle of trust since it is such a small company, but from time to time we bring in outsiders. We brought in one last year that asked if he could work for free to show us what he could do and within a week, he was on the payroll.

The problem is, most people ask for a job in the traditional sense rather than offer to demonstrate the value of what they can bring us. As a small company with limited resources, it is difficult invest in things without a sense of certainty, but if you can bring value to the organization and prove it to us right off the bat, then we are in business. So at the moment, we are not necessarily hiring, but we are always interested affiliate marketers that will promote the product for a percentage of the revenue on the back end.

If you have an audience and are interested in that, please feel free to [email protected] with your numbers and we will get in touch. You can also reach me directly at [email protected].

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

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-  
Robert Patton,   Founder of SHEATH LLC

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