The post-pandemic realities of e-commerce have been tough for many direct-to-consumer sellers. Take Molson Hart, whose company, Viahart, makes innovative educational toys and sells them on Amazon, Walmart and other marketplaces.
The past two years have been tough for ViaHart, and what worked pre-COVID and during COVID doesn’t work now, Hart said. That’s certainly true for my company, Beardbrand.
heart First appearance Coming to the podcast in 2022. In this episode, we addressed the plight of our business and how we persevere for better days.
The full audio conversation is embedded below. The transcript has been edited for clarity and length.
Eric Bandholz: Tell us about your business.
Molson Hart: In 2010, I founded Viahart, a direct-to-consumer educational toy manufacturer. In 2017, I started Edison Litigation Financing, an intellectual property trademark enforcement firm, with my brother. My brother is now the full-time CEO of Edison and I am no longer involved.
Viahart has struggled over the last few years. Every month, I share with my team how our sales are compared to a year ago. June 2024 sales were down 14% across all platforms, including our DTC website, Amazon and all channels. June 2023 sales were down 7% compared to 2022. So it’s been two years of pain and hardship.
Bandholz: Beard Brand also It was hardWhat is your strategy for getting back on track?
heart: Our products are highly discretionary: When food prices rise by 30%, consumers save.
We have tried different channels and products, and our success has been AmazonWalmart and eBay. TikTok ShopIn June, you made $7,000 in revenue. In May, you made zero revenue. That $7,000 in educational toys in June could translate into $30,000 to $50,000 in revenue in November and December, respectively.
That helps, but the problem is that sales are falling on Amazon, Walmart and eBay. We do a lot of wholesale, which is growing, but not enough to make up for the decline in the market.
Bandholz: Beardbrand has tried a variety of things, from changing its packaging and production methods to tweaking its marketing channels. They focused on organic marketing on YouTube but it failed. They tried advertising again but it’s not working at the scale they need.
heart: It seems like a lot of discretionary brands are faltering. So don’t get discouraged. We’re not pure e-commerce companies either. To me, an e-commerce business is like Amazon or TikTok Shop. Each of our companies is a brand.
I love Viahart’s product and the value it brings to customers, and while we may experience some short-term pain, we will continue to invest, innovate and deliver value as long as we remain profitable.
Bandholz: it is Bloody carnage in the AmazonEven if you have a great brand name and utility patents, that doesn’t protect you from the margin compression that’s happening now. When people search for your brand, it’s meaningless if Amazon doesn’t show the results without ads. Nike and Apple may be the exceptions, but all of us below Nike and Apple have to pay increasing fees on Amazon that just eat into profitability. So it’s hard.
heart: It used to be possible to make money selling anything on Amazon. You could just list a product, be it a cup or a pillow, and Earned moneyViahart once sold 50 different products on Amazon. Not anymore. As competitors entered the market, the company cut the losing products.
What worries me about this business is the declining purchasing power of the American consumer. Internationalizing all businessPlus, because we sell educational toys, it’s worrying to look at birth statistics: if fewer children are being born, it doesn’t matter how great our products are.
Bandholz: Why are so many DTC e-commerce companies struggling?
heart: I have listed what I believe are the reasons why DTC e-commerce companies are struggling: First, consumer debt is peaking. Consumer debt was minimal in 2020 and 2021 due to stimulus checks. Now consumer debt is approaching an all-time high. Food costs are rising, but wages are not.
TikTok is the lone silver lining that applies to U.S. DTC e-commerce over the past year.
I was young and stupid when I started this business. After a few years I wasn’t successful. Eventually I found a solution and made a profit. You and I have to try new things and adapt. No one cares about how we feel.
You just need to keep an open mind and keep hacking and maybe one day you’ll be able to buy a yacht.
Bandholz: Where can people follow you and buy your products?
heart: Our products are Tick tock, Ebay, Walmartand Amazonfollow me X and LinkedIn.
