The Cashflow Strategy that Grew Swag.com Grew to $40M in Annual Sales

The Cashflow Strategy That Grew Swag.com to $40M in Annual Sales

Jason Kirby: (00:01.761) Hey everyone, welcome back to Fundraising Demystified. Today I have the king of swag, the founder of Swag.com. All right. Well, let me start that one. Hey everyone. Welcome back to Fundraising Demystified. Today we have the king of swag, Jeremy Parker with us, who was the founder of Swag.com. Welcome to the show, Jeremy.

Jeremy Parker: (00:11.938) Yeah.

Jeremy Parker: (00:23.426) Thank you so much for having me. It's great to be here.

Jason Kirby: (00:25.623) I want to start with some fun topic here. You've seen the startup world, people buying swag. You've covered just about any and all types of swag. What's a wild story of just like where you kind of sat there and was like, "This company bought what and how many of it?"

Jeremy Parker: (00:39.774) We have a lot of those. I don't know. I think their mindset is good. We had a client, I can't say, but they were a big gym company and they wanted to reward all of their executives. So they bought really premium, amazing bicycles for every single executive. And for us, it was just like such a cool order. Every bike was, I believe, a little over $400 and 300 of them. And it was like, fully custom – the whole thing was really custom, beautiful, and in different designs. And that was a fun project to work on. We had a client who bought cast iron skillets, which I've never seen before. I never thought that somebody would want a cast iron skillet with the company logo on the base of it, but they did. People come up with different ideas to stand out and make an impact. And that's what we pitched at Swag.com – it was all about quality. There are the classics: t-shirts, notebooks, pens, mugs – but some people go a little bit different and it works for them. And so we just wanted to be the partner to help them get exactly what they want.

Jason Kirby: (01:49.379) Bicycles gotta be pretty cool. If I was working for a company that bought me a bicycle, I'd be pretty impressed. I just hope they're profitable companies making these decisions and not using venture capital funding. No, thank you for that. So let's talk about Swag.com. How did you come up with this idea of building Swag.com and what ultimately led you to it?

Jeremy Parker: (01:59.084) Yeah, I hope so.

Jeremy Parker: (02:12.716) Yeah, so some of the long story, I'll try to condense it. I was a documentary filmmaker in college – that was my passion, my background. I was 19 years old and made a documentary film called "1%" that won the Vail Film Festival. I was on top of the mountain in Vail, Colorado, and I thought, maybe this will be my career, my life. I asked myself two questions in that moment: Do I love what I'm doing? Do I truly love it? And am I that good? I was 18, 19 years old, thinking if this is my life, maybe being a filmmaker isn’t for me. So I decided no and pursued something else. I went back to college, was a junior at Boston University, finished my film degree, and when I graduated, I didn’t know what to do. I was an artist with a film background, so I thought I could use storytelling skills for business. I started my first business out of college called Tees and Tats – a high-end t-shirt company. It sounds easy, but back then you learned how to manufacture, market, and build an e-commerce site in pre-Shopify days. The company had early success, but then came the 2007 recession – no one wanted high-end t-shirts, so I kind of failed. But I got the bug for building things and learned what I was good at. I then started a business with my brother called Tipped Media, partnering with YouTube stars and major celebrities to get brands into their videos. Product placement became common later, but back then it was revolutionary.

Jeremy Parker: (04:37.762) And then our idea became, what if we actually got major celebrities – imagine owning their Twitter and Facebook rights. For example, Pipple had 4,000 followers on Twitter, and now he has 40 million. We partnered with Jesse Itzler, founder of Marquee Jet, and others. We started buying rights to celebrities' social feeds early on. Then we thought about a Groupon-like idea where you ask a celebrity like LeBron James for his 100 favorite products. If he says he loves Lay's potato chips, you approach Lay's for a deal where every time someone buys a bag, he splits the revenue. We eventually sold that company to Bob Sillerman’s publicly traded company. Shortly after, I started another venture, Vouch – a social networking app democratizing Oprah's favorite things. I spent three years on it, raised nearly six million, but it ultimately failed. It was a painful experience, losing money from family, friends, and investors. And right after that, I came up with Swag.com.

Jason Kirby: (06:37.763) How much did you raise for that?

Jeremy Parker: (07:02.210) I had experienced failure before, and after that, I wanted to start something that made money from day one. I went all in on Swag.com when I was 30 in 2016. I didn’t know exactly what to build at first – like every entrepreneur, you pivot a lot. I noticed that the person buying swag today is much younger than the old office managers. So, my co-founder Josh and I started calling hundreds of marketing teams and office managers to learn their needs. Initially, we targeted marketing teams because of their larger budgets, but we later realized that office managers were the key decision-makers, buying smaller quantities that introduced our brand to the company.

Jason Kirby: (08:48.291) I just want to pause you for a second. This all came from going on dates – like Tinder dates – where these girls would complain about their jobs, and you saw an opportunity.

Jeremy Parker: (08:52.492) No, it was a combination of things.

Jeremy Parker: (08:59.532) I was 30, and even my friends who were around that age and were in charge of buying swag taught me a lot. I learned that the amazing part of the swag industry was its uniqueness – the experience and quality. It got me thinking about what was truly amazing about it.

Jason Kirby: (11:21.920) It turns out it was really the office manager who held the keys. They weren't buying swag in huge quantities – they were buying 5, 10, or 100 pieces. But by buying for their company, every employee got swag.com on their t-shirt, notebook, or mug. It acted as a Trojan horse, introducing the brand across the company.

Jason Kirby: (14:34.007) I remember buying swag since 2008 – it was always a pretty crappy experience. I recall you guys eventually became my supplier, first in 2018 or 2019, then again in 2020 and a couple of other times. It's nice to have you on the show. But when it came to scale – how did you grow to $40M in sales? What was the secret sauce between 2016 and 2021/2022?

Jeremy Parker: (12:42.028) Yeah, exactly.

Jeremy Parker: (12:48.142) In the early days, 2016, we had no tech platform – just me and my co-founder working out of various spaces. We were traveling salesmen, meeting potential customers in WeWork spaces and beyond. Our focus was on learning: talking to as many customers as possible, even if some told us “not interested.” In our first year, we did $350,000 in sales using a simple “coming soon” landing page. The key insight was that swag is an impulse purchase for companies. When someone sees an ad, even if they forget it, seven months later it might trigger them to buy swag for an upcoming event. We wanted to convert offline conversations into online sales. We even had to license the domain name because we had no money to buy it outright. We worked out a deal where the owner got some equity and monthly rent, and if things went south, they could reclaim their domain.

Jason Kirby: (18:19.939) That’s a valuable point for founders: hyper-focus on one channel at a time until you validate it.

Jeremy Parker: (19:24.598) Exactly. I think I made a mistake by raising money for the wrong reasons. I’d had previous successes and failures, and as an entrepreneur, it can be lonely until you prove yourself. You look for outside validation, whether through press or VC funding. I raised money partly because I thought that was expected – even though we didn’t really need that much. In hindsight, we could have built Swag.com with much less, maybe $500,000. But raising 3.8 million gave us a safety net. If I start another business, I'll only raise money when I know exactly how to use it to drive growth.

Jason Kirby: (21:09.911) Let me interject with the safety blanket methodology. Do you feel that having that money changed your decision-making, even if you didn't spend it?

Jeremy Parker: (21:29.006) Honestly, no. Even though it was a stressful period, it didn't change our aggressive drive. In 2020, during COVID, we raised 1.2 million mainly as a safety net so we wouldn’t have to cut costs or fire people. It gave us the flexibility to pivot.

Jason Kirby: (26:07.400) Let's switch to the Custom Ink journey. How did that come about? Did they knock on your door, or did you run a process?

Jeremy Parker: (26:25.656) We weren’t actively looking to sell. In fact, our first interaction with Custom Ink was at the end of February 2020, literally three weeks before COVID hit. A friend reached out saying, "I want to connect you with someone at Custom Ink." We met, had a great conversation, and they even invited us to their office. But then COVID happened, and the meeting was postponed. We focused on surviving the downturn. In October 2020, they reconnected. We’d pivoted to a remote distribution model, and while the industry was down, we were thriving. At that point, multiple companies reached out to us. Ultimately, after several conversations and knowing we were growing over 100% every year, we decided Custom Ink was the right buyer. In August 2021, they sent us an LOI, and we closed the deal in November 2021, with our sales growing from 15 million to over 32 million in that year.

Jason Kirby: (31:31.275) It sounds like it was the best timing ever – selling when your numbers were still skyrocketing, even as other companies were struggling.

Jeremy Parker: (31:58.446) Exactly. In early 2022, even after the acquisition, things were crazy – for instance, Silicon Valley Bank, one of our biggest customers, went under. But overall, our focus on quality and a strong B2B model made us stand out, and Custom Ink recognized that.

Jason Kirby: (33:06.115) I want to go back to Custom Ink. There were several bids and conversations – what was the negotiation process like? What were you thinking during those moments?

Jeremy Parker: (33:28.918) I didn’t tell my team anything because I didn’t want to distract them. It was flattering to have buyers, but the numbers they initially offered were far below what I would accept. I kept telling them, "It doesn't seem like this is going to work," while staying in a small circle with trusted advisors. The best tactic was to be willing to walk away. We had a price in mind and wouldn’t sell for less. Even when pressure mounted, we knew our value.

Jason Kirby: (35:28.459) That’s key for founders – knowing your worth and having the courage to walk away.

Jeremy Parker: (35:57.603) Exactly. We had great investors, but as a founder, you need to decide what’s right for you. Sometimes that means not selling for less than you believe is fair.

Jason Kirby: (36:26.350) What about your team during that time? Were they aware of the process?

Jeremy Parker: (36:31.255) I didn’t tell my team anything. I wanted to keep the focus on growing the business, so only a small circle of advisors and investors were in the know.

Jason Kirby: (39:12.139) I think that's really well said. How can people reach you?

Jeremy Parker: (39:41.654) Please reach out to me at jeremy.ian.parker@gmail.com. Also, connect with me on LinkedIn – I'm Jeremy Parker.

Jason Kirby: (41:20.065) It's been a pleasure. Thanks, Jeremy.