Royce Reed has taken his passion for healthy pets and harnessed the power of WooCommerce to build his pet food subscription business, Alpha Dog Food.
I had the pleasure of chatting to Royce last week about his experience starting and running Alpha Dog Food. Some of the highlights include:
- how they’ve implemented their Ambassador (affiliate) program, which benefits Alpha Dog Food and many of their clients, including great animal charities like the Humane Society of Atlantic City;
- Royce’s seven favourite things about WooCommerce (we agree Royce, it’s so hard to choose!); and
- how Alpha Dog Food wound up accepting Bitcoin payments, and Royce’s experience with that so far.
I hope you enjoy reading this interview as much as I enjoyed doing it!
Kirby: How did you first come up with the idea for Alpha Dog Food, back in 2012?
Royce: It was actually in 2010. I was working for a food company and they had set up a direct consumer division. They were manufacturing meats and seafoods in their processing plants and selling them down at the restaurants—and they decided to start a direct consumer division.
I had some experience in direct consumer with a manufacturing goods company. So I jumped on board with them. When I started, I thought:
Hey, this has got to be the best product to sell on a recurring basis.
I was wrong. It wasn’t, because people’s habits are weird. Somebody goes on a diet, or they go out to eat. Their habits are always changing.
During that time, I was feeding my dog one day and I thought:
Ah this would be the best product ever to sell on a subscription basis, because it’s so predictable.
You know when you’re going to need it next if you use the same amount every day. (Unless the dog is growing). Once the dog is eight months to two years old, they’re going to eat the same amount for the rest of their life.
I started to do research on how I could get into that business. After about a year and a half of searching, I found our manufacturer here in the US, a family owned company, Ohio Pet Foods. They had a great reputation.
There was a massive recall in the pet food business back in 2007 and [almost] everybody [in the US pet food industry] was involved because they were buying really cheap ingredients from China (in this case). Ohio Pet Foods wasn’t involved and that really impressed us.
So in 2012 we got set up. We had a really basic plugin that we were using, which allowed us to bill [on a] recurring [basis]. And we used that for about a year. And we grew. But it wasn’t ideal, it was sort of an archaic website.
Then we found WooThemes. And once I landed on their page I probably spent an entire day [on there], I was just so excited about what I found. I tell everybody about WooCommerce and WooThemes and the [WooCommerce Subscriptions] plugin that you create at Prospress.
To answer your question, I got the idea when I was feeding my dog one day. I was working in direct consumer sales and marketing already and a light went off.
Kirby: How did you reach your first customers?
Royce: I went to my family and close friends. Before I even had a product—it was July of 2012—we talked to the manufacturer and said:
We’re going to place and order, but not until September.
What we then did was make presales. We raised the money that we needed to purchase our first product from our clients. We gave everybody a 20% discount, for getting on board early, and people were just so excited to help us out. We had a pretty decent network.
Now we’re at a point where we’re getting customers from Oklahoma, who are paying with Bitcoin. (They found us based on the fact that we have a Bitcoin plugin on our website). So [now] they’re coming from everywhere.
Kirby: I think I saw on your website that you focus on your local area, but are you now looking nationally?
Royce: We do focus locally—but we also sell nationally because we have great shipping rates from FedEx and USPS—most of our clients are here in the Philadelphia area.
What’s nice about that is we are selling a product, and we have our margins. But if it’s a local client—because we also have shipping built into our prices—we can make the delivery ourself, now we’re not only a pet food company, but we’re also a delivery service. Our business is sort of two-fold there.
We love local clients, because it allows us to have a better business. They’re the folks we can offer the best value to, because we’re not paying someone else to make the delivery, we’re paying ourselves and of course we’re going to give ourselves a discount. That should give us the best rates possible.
Kirby: What has been the biggest challenge you’ve faced so far?
Royce: The biggest challenge has been starting a business from scratch. We never raised money besides the initial customer orders we’ve taken, so it’s been a very much an organic growth. We reinvest anywhere from 10-20% of our profits back into the business, and we’ve grown every month that we’ve been open. But I’m sure if we did have some funds, we could grow even faster.
Kirby: How many people are on the team now?
Royce: It’s just myself and my wife. So it’s a family business. We use a plugin called Ambassador. Every time someone becomes a client, they also become an Ambassador in an automated process. When it goes through the checkout, they get a unique share link.
About half our clients at this point are from referrals. At the end of the month we pay referral commissions to our clients. It’s been a big part of our growth.
I own the business, but we’re sharing it with our clients in terms of the commissions that we pay back out to them. For us, it’s marketing money well spent on the people who support us. We’d much rather spend it there than on advertising that may or may not work.
Kirby: And many of those affiliates are shelters and rescue organisations, aren’t they?
Yes, exactly. So we’ll approach the Humane Society of Atlantic County, a wonderful organisation based out of Atlantic City in New Jersey, which is a big city. They take dogs from all over the East Coast. They adopt out from 50 to 80 dogs a month.
We approached them and said:
Hey, can we help you with your dog food needs?
And they said:
Maybe, come on in.
So we went and talked to them, and it was the Ambassador Program that appealed to them most. This is a way for them to raise funds continuously, through the referrals that they’re making and the dogs that they’re adopting out.
The people that are supporting them love it also, because they also want to support the Humane Society. And they’re able to do it through what they’re already doing: purchasing dog food. They’re great resources.
Kirby: What’s your favourite thing about WooCommerce?
Royce: My favourite thing about WooCommerce? Wow, um, getting emails saying “you have a new client.” That’s my favourite thing.
The reports are great, I probably look at them too often.
You know the emails that are automated, which go back out to the customers and we can customise?
You know what I love the most? How our clients are interacting with us based on the technology we have. I don’t have a programming background, my background is in sales and marketing, I studied history in college, I’ve worked in construction, as a labourer and construction management. How would I ever be able to build such an incredible platform that’s so user friendly? What an amazing group of people that’s associated with WooCommerce, that’s my favourite thing about it.
Oh and the customer service is always so great. Whenever we reach out with an issue, we get a response within 24 hours. Great advice.
Brent gave me one of the best tips I’ve gotten this year, with a plugin called User Switching. And so I was doing a lot of customer service, but I’d have to go and change the user’s username and password in order to get into their account. And he turned me onto a plugin where I just click the button “switch user” and I automatically become them.
I don’t have to change anything, what a big help! My favourite thing about WooCommerce is WooCommerce Subscriptions.
Kirby: So tell me about your experience offering subscriptions?
Royce: It makes so much sense. As I mentioned earlier, with pet food, you know when you’re going to need it next.
The updates. The updates are probably on an average every two or three months. And it’s always something very relevant. And then based on what Brent was saying about what’s coming down the pipe, it’s going to get even better.
Kirby: You offer customers a discount if they sign up for subscriptions, don’t you?
Royce: Yeah that’s right. So we do offer a one-time purchase, but often our clients save 20% when they sign up for the subscription.
Kirby: I guess it also allows you to have a bit more certainty about how much revenue you’ve got coming in and that sort of thing.
Royce: That’s exactly right. So, when it comes to doing inventory and making our purchases for the next month, we understand exactly what we’re going to need. So for us, it allows us to keep a really tight inventory.
Even though there’s a 12 month shelf life on the foods, it never gets past 90 [days] before we send it out to the client. So they’re getting fresh food. And it has a lot to do with the fact that we can predict what our business is going to do next month.
We always account for growth—10 to 20%—so we order a little extra, based on what we’re going to be doing for marketing, each month.
Kirby: Have you made any mistakes using WooCommerce that you’d like to share with others, so that they can avoid making the same mistake?
Royce: Sometimes I think the simpler the better. If you offer too many choices, I think that’s the mistake a lot of people make in sales. You have easy up to 100 different people, you’ll get 100 different opinions, but you have do what’s simplest and makes the most sense for the person.
You know, it’s like when you get driving directions from somebody. If they’re standing there talking to you and telling you each step along the way, you’re going to forget everything.
So what I’ve learned is to just send them to the website, and if people know how to shop online, they’re going to figure it out. It is a little different than shopping on Amazon, but now even Amazon and a lot of websites offer the recurring payments. People are coming to understand the convenience and the savings associated with it.
And so, less information is better, a lot of times as far as interactions with clients [and] potential customers [go].
Kirby: What has eCommerce allowed you to do that you have otherwise done?
Royce: Well I’m home right now with my daughter. We just spent the last hour working on her maths. She’s four years old and at a kindergarten, [but she’s at a] first and second grade math and reading level. That’s because my wife and I get to spend so much time with her, before she’s even in school. And so just the ability to work from home, that’s the best thing about it.
Kirby: And how do you manage both your retail and wholesale businesses?
What we’ll always do for our wholesale customers is come into their establishment, with their order, whether it’s monthly or bi-monthly, and we’ll rotate the inventory. We’ll make sure all of the older product is right up front for them. It’s the type of service that they’re not going to get from the larger distributors.
We also allow them to only purchase 200 pounds at a time, with Phillips, the bigger distributor, they’re required to purchase at least 500 pounds. We’re sort of fitting a niche.
Our wholesale clients are the smaller retailers, and the smaller doggy day cares, and you know, our flexibility and personal approach has allowed us to, without much of an issue, get into their businesses and take that away from the bigger guys and compete.
But we do the same thing for our retail clients. You know, for example, we have an elderly woman who was referred to us by one of the local vets. And we make that delivery ourselves—I personally make the delivery—because for me it’s just a stop along the way.
When I went to her place last week, I shoveled the snow off her front porch and I poured the food into her container, which she had in the garage. And she said:
You’re going to be blessed with good karma.
I said:
That’s great, send us some referrals as well.
So she’s going to refer her family up north, so we’ll see how that goes.
Kirby: Were there any businesses or entrepreneurs that inspired you to start Alpha Dog Food?
Royce: Yes, absolutely. The gentleman I was working for, the Rastelli Brothers, the food company that I mentioned early on. They started their business back in the ‘70s when they were young men. The two brothers basically started in an 800 square foot donut shop and now they have a $700 million a year business, where they employ all of their children and nieces and nephews. And they are able to do so many great things in the community.
Ray Rastelli was the founder of that business, he was a huge inspiration. He still works very hard to this day, but how he’s been able to provide for his family and his community in a great way. They employ hundreds of people.
There’s a guy who founded a company called Melaleuca, his name is Frank Vandersloot and their business model is one we try to emulate. It’s very conservative in all the right ways. It continually provides opportunity. It’s a direct consumer business and they basically reward their clients for referring others. That’s where we got the idea to—you know instead of spending all kinds of money on advertising and marketing in that way—we’ll just give it back to our customers who are supporting us already.
So yeah, those two guys right there, I’d say are the biggest inspiration.
Kirby: Do you have any advice for anyone who’s an aspiring entrepreneur?
Royce: Yeah, read this book, it’s called The Four Hour Work Week by Tim Ferriss. That was a huge inspiration for me, I listened to it in my car back in 2010 when I was formulating all my ideas.
Kirby: Back to the Bitcoin payments, what motivated you to start accepting Bitcoin?
Royce: Bitcoin makes a lot of sense. There needs to be a digital currency, an online currency, away from PayPal and credit cards. Because the fees that they charge, in my opinion, are a lot. You know, it’s a big portion. We’re paying them each time.
It makes a lot of sense. It’s like cash, but online. We’ve got the plugin that works with WooCommerce, and so we put it in there.
Kirby: Are you making many sales in Bitcoin?
Royce: No, we make two. But they’re two of the most exciting sales we’ve ever had.
(This interview has been edited for readability).