How Booty Bands & Barbells CEO Jay Crew grew Booty Bands & Barbells to $10.2M revenue and 50K customers in 2024.

hey folks my guest today is j crew he is booty bands and barbells uh he's one of the one of the founders and established female fitness brand their complete home gym educational content fitness app and their best tasting protein help women create long term results their goal is to end the toxic weight loss loop for over a million customers by 2025 jay you're ready to take the top let's do it all right and you are one of the co-founders right i am danita young is the other co-founder she's the face of the female fitness brand i'm the guy behind everything i know i'm going why is this guy leading a female fitness brand nothing doesn't make sense here right yeah all right so what's the bit what did it start off as was it an e-commerce plate to start or was it a protein powder or something else or an app or what yeah great question yeah we're the original booty bands we owned the trademark booty bands we started off as just the product the resistance bands booty bands made it a little bit different and better and then from there we really fell in love with our customers not the product and started making other products and uh barbells dumbbells protein digital products a fitness app and it kind of all formed into a complete home gym from there what so what year did you get your first dollar sales 2017 four years ago and bootstrap today or have you raised bootstrapped it until 2019 we had a hundred thousand dollars in debt equity capital injected into it other than that we uh bootstrapped the whole thing yeah you're 100k in debt in 2019 otherwise bootstrap i love that and then give me a sense like if you're comfortable what's revenue today and we'll break up all the different products yeah so last year was 5.5 million uh our run rate should be about six this year we had to slow back the reins on scaling we're planning to double our revenue but i'm sure as you know anybody else listen to this commodities have just skyrocketed lumber steel we were starting off in steel which is their biggest selling product 83 of our revenues our barbells and dumbbells still went from 30 cents a pound to a dollar 40 and under a year so our real main focus is figure out how to lower these costs of goods get our gross margins better and get these these prices down so all right what did it go up it went up to 140 from what 30 cents whoa yeah okay so 83 of your revenue your 6 million comes from barbell sales where's the other 17 the other 17 is resistance bands so those are the actual booty bands um long bands our fitness app and our pro team how much does the fitness i make this app right now we just started in november and it's growing about six percent month over month and we're doing we have about 800 active paid subscribers right now it's about 15 000 a month interesting 800 pages and what are they paying for is it is it courses or what yeah it's a fitness app so it's just kind of like a content for specifically how to use the products and get into the community and um they have essentially a personal trainer at their fingertips and when you look at your six million revenue this year how many individual customers will pay you at least one dollar whether it's across the fitness app the booty bands the barbell or protein how many individual customers yeah um that's a good question we have 50 000 now um i won't know i don't know the exact number of customers by the end of the run race that's a good question what does that mean so 50 000 does that mean everyone since 2017 just paid you at least a dollar yes okay our our clv to cac ratio is 3.4 to 1 right now so so uh customer lifetime value cap ratio 3.4 so tell me where you are spending dollars to get like to get new customers yeah most all of our customer acquisition paid customer acquisition is facebook and google ads um and influencer marketing and so what we spent on a facebook ad to get you know one new paid customer our cpa in a facebook ad right now is about uh hovering over a little bit of a hundred dollars and uh google's under 75 so our blended cac ratio with kind of all of our paid traffic channels is uh sorry it's 120 and then 80 so our blended cac ratio is about as close to about i think uh last i looked about a hundred bucks yeah yeah now you know sealed you know cap to l to b ratio can be fine but like what's more interesting to me at least money velocity help pay that period how quickly to get the money back so what is your average cart if you spend 120 bucks to get a sale from facebook do you make that back pretty quick yeah so i mean it's direct to consumer so we get it you know start as far as receivables you get paid right away but our average order value right now is 268. okay guys so that begs the question if you can spend an average of 100 bucks on a facebook ad or a google ad to get a new customer that pays you 268 bucks immediately um i guess you do have hard costs there that we mentioned the steel costs earlier so on a 268 checkout how much you're going to make profit on that um a profit on well our i know what our overall month over month and your profit is um if that's your question sure so right yeah so right now uh our net our gross margins are about 56 and our net margins are two okay interesting and i imagine those those growths and that have come down significantly because of the increasing price of steel yeah i mean that's what it is now it's just because everything's made in the usa which we're super proud about but it's come down to the point where we're going to have to get these products made overseas which we already have quotes and samples on and we go from 56 gross margins to 78 gross margins and a one a two percent gross margin to a 12 uh net margin to a 12 overnight just from lowering our cost of goods so a lot of people are like why don't you just debt finance this that's that's an easy way right uh rather than giving up so much equity which the cost of capital on on raising as opposed to debt is significantly higher yeah clear bank or something like that clear bank um just on debt financing there you know we don't have a lot of collateral like large assets on the balance sheet or anything like that to get the 2.2 million raise that we're going for so some of it will be debt but not all of it you're raising 2.2 million right now yeah at what valuation you think uh pre is 10 and post money is 12.2 free is 10 interesting and do you have term sheet already or you're still you're still hunting for the right partner uh no closed term sheets term sheets are out there i would say we have data rooms talked about it i would say due diligence is pretty i'd say they're doing due diligence i guess everyone's definition of that's a little different but yeah and why raise right now i mean why do you need more capital to grow why can't you keep self-funding it's just it's really expensive to buy like right now thankfully we're in made in the usa if we're in china trying to get you know product we'd have to buy a ton in advance and then wait months and months and months for it to get here um the great thing is it's kind of like buy on demand so we buy a week in advance two weeks in advance and that's awesome but we really want to lower these costs of goods we want to increase these margins we want to build a 100 million dollar company and be one of the biggest female fitness brands in the on the planet and expand and move our product line from just these one-off barbells and to 60 of our revenue being consumables pr other protein powders protein flavors protein bars and really focus on the app where it's monthly recurring revenue subscription products um let me ask you like when i look at a lot of you guys landing pages the top of your funnel is usually the lower margin product it's the physical asset versus the digital subscription which your margins are much better on why not flip the funnel like why don't you put the digital stuff at the top of the phone then upsell barbells later yeah that's a good question so one of course the average order value is uh really great our barbells are a huge hit the conversion rates are great on amazon and direct to consumer on our website there's nothing like it like i said we're the first female fitness home gym the majority of our customers 89 85 to 90 of our customers are women who wouldn't be caught dead in the gym in the first place that we gave them a solution that they never had and we're really proud of that and so the fitness app there's a lot of apps out right out there right so cost to acquire customer we've tried on a fitness app is is much more expensive and tougher and a lot of people our customers are typically not going out there looking for apps and like we're really really good at creating content so the content that we create that is our paid content and stuff like that it's really catching and really speaks to the pain points of our customers who want a home gym solution so that's kind of the direction why we went there interesting can i take that average order value of 268 bucks divided into your revenue this year about about 6 million that would mean about 22 000 customers are checking out once for 268 bucks does that sound about right or no uh if you did the math right that's probably right yeah...