Podcast 5: How Brian Jones Took His Internet Business From His Condo To A 10,000 Sq Ft Warehouse
The fifth podcast episode is now live on iTunes. In this podcast episode I chat with Brian Jones who I first interviewed earlier this year about his interesting internet business. He runs several niche movie memorabilia websites (i.e. Red Rider Leg Lamps and A Christmas Story House) surrounding the popular Christmas movies “A Christmas Story” and “Christmas Vacation.”
On this podcast Brian talks about how he first got started making money online by building and selling the infamous Leg Lamp from the “A Christmas Story” movie out of his condo.
We also cover how he took a big risk and bought the actual Christmas Story house from the movie on eBay (pictured right) and ultimately grew his business to a point that he needed a huge 10,000 square foot warehouse just to house the movie merchandise. This is a truly awesome story of a passionate internet entrepreneur who was able to build a successful business from scratch.
I am a huge fan of both of these Christmas movies and it’s been a family tradition that we watch them every year so this conversation in particular was very exciting for me to participate in. I hope you enjoy it.
Intro: Welcome to the MakeMoneyOntheInternet.com podcast where you learn tips and strategies from the pros on how to build your own online business. Now, here is your host
Chris: Hello, Chris Guthrie here and before I play the recording for this podcast session I wanted to take a few moments to thank everyone for the tremendous feedback I’ve been getting from this podcast. As I’ve said on numerous occasions, I answer any and all emails that I receive and I’m happy to help you out as much as I can. So you can reach me via email Chris@upfuel.com. Now I’ll let you know that I did this podcast recording from a Skype phone call before I get a really quality mike so the recording quality may be a little bit lower however this doesn’t diminish it from the quality of the conversation that we had. In a moment you will hear from Brian Jones who has found a unique way to make money online selling licensed movie memorabilia from the ‘80s classic Christmas movies, A Christmas Story and Christmas Vacation. I don’t think that there is anyone listening that hasn’t at least heard of the marathon A Christmas Story sessions that go on every year. So this is an awesome story, you’ll love hearing about how he built his business and the tips that he shares you can apply to building your own online business.
Now without further ado, here is the podcast with Brian Jones.
Alright Chris Guthrie here and we have Brian Jones from ChristmasStoryCollectibles.com and AChristmasStoryHouse.com. How are you doing Brian?
Brian: I’m doing alright. Things are good.
Chris: Good, good. So I basically found Brian’s websites when I was shopping for Christmas presents for my dad. Because we love Christmas Vacation and A Christmas Story, both of those two movies we watch every year and so I contacted Brian. He graciously agreed to answer a few questions for everybody and talk about niche ecommerce stores. So again very excited to have you on. With that in mind, I was actually curious how long you’ve been doing business online and if this was your first foray or if you did other things before you get started?
Brian: I guess it would be eight years. I started in 2003. So, so this year we’d be counting on eight years I have been doing this and this was the first thing I did. I was actually in the Navy before this. I didn’t know anybody in business and I didn’t know how to get my products out there. So I just figured I would put it on the internet myself.
Chris: Okay. So you’re basically a fan of the movies and you thought I’m just going to try and find a way to put a product out there…go ahead sorry.
Brian: I was just trying to – I was getting out of Navy and I was thinking what should I do. And my parents had made me a leg lamp back in the days kind of kick me gag – as a gag gift you know, [___]. I’ve failed the vision test in flight school so this is my major award for dealing with the disappointment, moving on to other things. And I was getting out of Navy. I was doing interviews for corporations and I just wasn’t feeling it. I was like this is basically everything I don’t like about the Navy just you know civilianized. I’m like well I was just sitting there like I should sell leg lamps. And I said it loud and my friends are like I’ll build you a website and that was it. I was going to do it. So I just started figuring out all the parts I needed and I started tooling leg lamps together in my 1,000 sq ft condo and so my condo became a leg lamp factory.
Chris: Alright for those of you who don’t know the leg lamp is from A Christmas Story and it’s basically the – I can’t remember what contest it was that he won but it was his major reward and whenever he open the box he says, Fragile! It must be French. Or Italian or something.
Brian: Actually, it’s Italian. It was a crossword puzzle contest. He thought he was going to win a bowling alley or something and then he ended up winning this tacky, god-awful leg lamp that of course the wife hated, which wife wouldn’t so.
Chris: I should have let you explain it. You’ve obviously been selling and probably know the story better than I do but that’s awesome. So I take it you had to go about getting the official movie licenses to actually sell these products. Did you do that right away or how did you tackle that aspect?
Brian: That aspect kind of tackled itself when I was buying the house from the movie. It was kind of tricky to get a license. Most companies go through something like selling shirts, selling glasses, you know, paint glasses or they make their own miniature villages, they make costumes and then make – once they’ve made so many of these like well, let’s license some stuff because the licenses are usually ten of thousands of dollars over three years generally the term. And so if I hadn’t first gotten into that there is no way to start it up. I will be like I don’t have that money. I remember the first time I spent $2,500 on a cardboard box. It’s like boxes, cardboard boxes – it’s $2,500. Yeah, a dollar of this a piece and you know and you want as many of them; I’m like geez. So what actually happened for me was the house from the movie came up for sale on eBay you know once again the internet finding a way to make money on internet. The gentleman has actually put in you know, in poor shape. The upstairs was to the stud; they were trying to renovate it. But we just said you know the heck with it and left it and just kind of bring down the downstairs and fun aside you know I’m just going to sell this. A friend who was like I can help you and get the most money for it putting on the internet. So they put it on eBay up for auction and I saw it so I renovated that back and I opened it and so that became really popular. I’ve been talking to movie studios back and forth I was basically getting the brush off. Yeah, you’re not doing enough business; you won’t be worthwhile, you know and just kind of finding the wrong people. So finally the house opened up the movie studios are wow it’s pretty cool and I admittedly found my way to the right person, the lady who licenses all Christmas Story stuff and she said yeah, I’ve been thinking about you, you know, I wanted to contact you and I sent some letters then we worked it out and then I got a license and making a percentage of the admission and royalty and also they helped me buy all kinds of Christmas Story stuff from other licensees, you know, who might not sell to small guys like me who might not know the product. But then it helps out because you know my business was growing so I sold more of those products so they got more royalties and I made more money and everybody’s been happy.
Chris: So you started out basically with the leg lamps and then you were selling those and then you saw the house come up for market and you’re like okay this might be pretty cool thing to buy and you’re able to get that and then people kind of start listening to you then basically right?
Brian: Right. Basically it started out if you get the one product, you get the leg lamps and the one style and that was it. So yeah, basically it started from there that the house you know came up, everything moved forward. It kind of eased into it.
Chris: Yeah, so then beyond Christmas Story I know you also have the Christmas Vacation. I mean how many other movies are you licensed to sell their products and are these like exclusive licenses or did they not really do that?
Brian: I only have these two. I can basically probably ask for anything within Warner Brothers realm and like Hallmark will do that. They’ll take – they’re huge company. They’ll take and they say we want the exclusive license for all ornamental and every property you have.
Brian: You will only see Warner Brothers movie ornaments from Hallmark. You don’t see them in any other stores. If you want something that’s from Warner Brothers movies like Batman or Superman or something in that realm it’s only at Hallmark. So they do sometimes do exclusive; my licenses aren’t exclusive. They have a lot of licensor basically you can have channel distributions in niche distribution kind of smaller drugs stores, specialty stores or like mass market distribution. And then different regions, it’s usually like in whole US but you can have the worldwide distribution license. There are different channels, different products, whether it’s exclusive. It usually depends on how much you have to put up as guarantee. I guarantee I’m going to sell this much, pay you this much in royalties and if you don’t meet that; how much is your royalty percentage so you have to pay the minimum guarantee.
Brian: It depends. Mine aren’t exclusive and sometimes that works out because to develop a product and then you have to make to produce it, we sell just as many if somebody else say we sell it’s easier for us to just buy a couple hundred of those off of them then have to go and make a own whole village and do all that stuff. We specialize in but that apart of so it’s easier to make that partnership and we sell just as many as if we had made it on our own and went through all the hassle, you know producing it.
Chris: Okay. So then it’s almost you know if you’re looking to get into – I guess the other question I would ask is you kind of talked about that recently but so some of the stuff do you actually house some of the stuff you have like you still house the leg lamps and make those or are they all kind of drop shipped from other warehouses and other licensee, people that you worked with then?
Brian: Everything that we sell on our website we actually have in a warehouse. I’ve gone for I think originally 1,000 sq ft to now 10,000 sq ft. You know, keep in mind it’s growing from you know my condo to a little storage unit that you rent to a small warehouse to medium warehouse to something bigger. Over the years you know it stepped up as the company has grown but you know so we started off from nothing up to – just so you know. Wow, that’s a lot that can’t hurt you that. We keep in-house everything that we sell. I’m on the basically the other side of affiliate program. You know you send it to me something to sell and we’ll ship it out. But we still manufacture some of our own stuff like the moose mugs from Christmas Vacation we sell that through both websites Red Rider Leg Lamps and Christmas Vacation Collectibles and we manufacture all that. I actually have the exclusive license on that to make those and also distribute them to mass market because I figure that an up and coming movie; it had its 20th anniversary two years ago which is kind of how I ended up branching out into it.
Chris: Okay. So then yeah, actually that was one of the things I was curious just how do you branched out. You just kind of – actually I don’t even know this but are they both made by Warner Brothers?
Brian: They are both Warner Brothers movies.
Brian: Which made it easy. I just went to the same licensing agent, can I get a license for it, sure.
Chris: I was actually curious if you don’t mind sharing. What is the minimum that you have to do? I know that obviously when you’re first starting out, you know I kind of saw how you started in your condo, then you have the storage unit then to a warehouse, then a bigger warehouse. But I mean if someone wanted to try and get into this type of business what is the minimum they are looking at for these types of royalties? I know it’s a percentage of sales as well, but.
Brian: The percentage generally varies anywhere from 5% to 20%. Usually 5%, 10% or 20% is generally the percentages you’re looking at. And 5% is usually if you sell at retail, 10% generally if you sell at wholesale and then 20% will be if you’re re-creating some type of thing from the movie big as far-reaching as if you had a house of people to work or if you were going to. Warner Brothers also licenses, what’s that movie, Polar Express.
Brian: but it varies depending on what you’re doing. And the minimum that – and this is just for Warner Brothers and, there’s other studios. The minimum range is anywhere from $25,000 to $75,000 with contracts generally three years. And like I said these are general terms, these are – I believe also general they are pretty much industry-wide for any movie studio.
Chris: Okay. So then, when you took over that house, I’m actually kind of curious, you know actually I found your website as I said at the start of this little interview and I actually do want to come out sometime just to tour the house. Because I know you have some of the casts come out occasionally to do tours. How do you actually get in touch with the cast, did you use your contact at Warner Brothers to meet those people then or…
Brian: No, actually that one was just a funny odd story. The guy who played Flick in the movie baseball cards and movie collectibles in Westlake Village and I grew up two towns over from like sixth grade. We just happened to his dad’s store – actually my mom would stop in there for something junior high and we went in there. I recognized him from Kidco, he also played in the movie Kidco. You know that’s the kid from Kidco. My son also played in Christmas Story oh yeah funny stuff. Years later I saw this guy selling little miniature leg lamps signed by Flick from A Christmas Story, I’m like that’s got to be his dad or him selling stuffs signed by him. So I just went in and said hey would you guys be – I bought the house, would you be interested in coming out, do stuff signing. He knew some of the other guys, I mean some of the other people I found off him you know, people searches and I found Miss Shields just through the internet. She was teaching in acting classes in Canada and we just emailed her and said hey we would be interested in having you down and so just kind of got the cast back together over things like that.
Chris: Okay. And then everyone kind of, each person kind of knew maybe where the other one might be at or email address and then that’s how you’re kind of able to bring them together.
Brian: And if you’re a crazy fool and you buy a house off eBay from this movie and restore it then people tend to find you as well.
Brian: That’s what happened to me.
Chris: Yeah, I live in Seattle, Washington and so we – usually every summer we go down to the Oregon coast at the Cannon beach and so we stopped off at the Goonies house and they have a sign that says you know, Goonies on foot. Welcome. Please don’t drive your cars over driveway basically so you can walk up their driveway and get a picture in front of the house. But they don’t do tourist – that’s another house you could takeover.
Brian: Actually I had talked to Warner Brothers about that because they couple of sites trying and kind of do something with that. I’m a little hesitant on that one because they don’t have a 24-hour marathon about it and I’m not sure exactly what the fan base is and then also from a business standpoint whether the products you would make that you would sell to people to. The house and everything is fun. In the end you have to have something that you could sell to people and make money to have it run as a business otherwise it was fun for a while and then it closes.
Chris: Yeah. It makes sense. I supposed with A Christmas Story and Christmas Vacation there are so many iconic things that you can sell whereas The Goonies there’s – I’m actually sort of trying to think of a few that you could even do and it’s kind of tough for me to even come up with that.
Brian: Yeah. You can sell some t-shirts. I’ve seen a couple of things that have been made and stuff but from our business perspective actually the majority of the money is made selling items on the internet. The house is the fun, you know the cool part of the business and the bulk from where the money is made is actually the internet, you know, your shop.
Chris: Yeah. And I believe when I was looking through the sites you do have an affiliate program right?
Brian: We do. I’ve tried a number of different ones and my favorite one so far has been Shareasale. We tried an in-house one, the amount of stuff to actually you know program into there to make it work well, we just ran after too many hiccups and the cost were – whereas I can just sign up for like Shareasale which is a website that has already a bunch of affiliates on it. You can advertise saying hey we’re looking for affiliates there and they find you and there are already a bunch of people who do that kind of thing will then find our site you know that normally wouldn’t just find our site by shopping for their parents for Christmas.
Chris: Yeah, exactly. I actually just came back from Affiliate Summit West where Shareasale and all the other different types of companies were there trying to get people like me, affiliates to help promote their stuffs. So that’s cool using Shareasale I know a few other people there and they are pretty good company.
Brian: And we also use – we sell stuff on Amazon and eBay obviously and then they have their own affiliate programs that people could sign – so we try to make it easy for people to become affiliate because we don’t make – want to make it harder – the more affiliate the better obviously from our standpoint and also products the better. So I tried Amazon and Shareasale is also good or other type of third party because then you know that somebody else and there’s a way to see it. So you make sure you get your money and that everything is running smoothly. And then it just takes it out of my hands for the work to you know sell it up on Shareasale people can pull down whatever they need to and they get their payments you know automatically.
Chris: Yeah. So then are you – kind of going back to the house – are you still living in that same city right nearby where it’s at or somewhere else?
Brian: Nope. I am south of you in San Diego, California.
Chris: Oh, yeah of course. I know we were talking about the time zone. So then how many employees you have working for you. I mean, do you have some people based over at the house itself and then some people in San Diego?
Brian: They are all in Cleveland, Ohio and the surrounding suburb. We have our warehouse actually in the Cleveland suburb and have three employees there – we just hired one guy this year. Things went well this Christmas so we need somebody more year round to make Christmas run smooth and then and also we have about seven more out of the house obviously with. There’s three houses, there’s a museum, the actual house and then the gift shop and so there is seven people there because there’s more houses to run and as opposed to if you have in a – with email you can do this – to respond both at the time so you don’t need as many people to run a warehouse.
Brian: Another reason to run internet business: fewer people, fewer employees.
Chris: Yeah. So then – beyond you know, just trying to get in touch with someone with a movie license what were kind of some of the failures or just hiccups that you experienced while you were trying to grow an ecommerce business?
Brian: Ah, geez. I don’t know where to start. I actually have a friend who is starting a business right now. regardless of your business you have to have a website but making sure you’re getting a good deal on your credit card processing. I think always making sure we had if you’re getting a store all the products in-house, having enough space. There is never enough space and we’re trying to get more warehouse. It always seemed like somebody else will take the warehouse before we could get it and our complex there. And so we’re stacking stuff all the way, I mean the ceilings are 20 feet, 20-25 feet. We have stuffs stacked all the way as high as it could.
Brian: So getting the warehouse and then the first time I went to get a warehouse I was really worried. What if this doesn’t work out. I don’t want to sign a three-year lease. So I found a place that had one year. It was more expensive but if things didn’t work out or I needed more space as I was growing it was a little business park and their niche was basically selling to people who were, leasing to people who are kind of not sure where they are going. They could charge more but the trade off was I wasn’t tied in to a three-year lease.
Brian: and moved three times within that complex like every year as I grew you know and can afford more for rent and also needed the more space I could do that. You’re good?
Chris: Yeah, and I was going to say, so you said that last year went pretty well. You don’t have to answer this question if you don’t feel comfortable but you know, what type of sales do you see during a Christmas time period. I mean I assume that most of your sales come during Christmas and over you know that time of the year but…
Brian: We usually spike to about 70% of our sales between October and the end of the year. And we’re talking later October so probably in a two and a half month time period which about 70% of our sales. So that’s you know – the rest of the year is getting ready for those two months or two and a half months.
Brian: I think that’s true for a lot of businesses regardless of what you sell. Christmas shopping season you know, makes the year for you.
Chris: Yeah. So I mean beyond – so I know you’ve learned a few things just how you got started and then the different struggles you’ve had. What else might you suggest to someone that’s looking to get started in a niche ecommerce, online business?
Brian: I would do something you like or something where you’ve seen that there’s a need for it that other places aren’t getting like the leg lamp for example. For me I don’t think you’d find that in a big one, in a Walmart or a Target because it’s going to some people. It’s funny, sort of PG movie some lady is honestly going to complain that it’s sexist and you know provocative. You know, one guy had a problem with his home owner association so that it was you know outside the line what was acceptable that you couldn’t put it up the window. And the decency laws to play around like it’s a joke. And normally was the joke from the movie you know PG rate, the family can watch so see the light but you know at first somebody would complain so. So it’s something that I would get something that you like and I mean you’re selling wizards but a wizard that you like and something that you’re going to be really passionate about and want to do but also something you see the needs are not being met or it’s not need being met in the right way and it’d be hard for a larger company to get in on so that would be the way to go. I guess the one other thing I say is pick your web address well. I started off with Redriderleglamps.com and actually the website we promote is AChristmasStoryHouse.com with all the licensing and things of that nature. But redriderleglamps.com is so well indexed now that I’m afraid to leave it. Basically switch everything over to some other site and have it fall in ranking. So, I leave everything on there. URL really doesn’t match if you’d come from AChristmasStoryHouse.com over. People probably sometimes go why are they saying RedRiderLegLamps. You know if they know the history of the store and we started selling leg lamps first, called the company Red Rider Leg Lamps born with AChristmasStoryHouse. If you can’t think of you know a good URL and that you know – obviously a little bit different but make sure you have that solid and buy the URLs around it. Like if it’s you know lamp, buy lamps and buy the .net. Just so you don’t end up with competitors and stuff you know stashing up on each other. If you do anything, if you do come with a unique idea or unique place there is always going to somebody like oh I can do that, I can do that you know so.
Chris: Yeah. Okay. Cool. Is there anything else you’d like to add? I know that’s pretty much a lot of good tips. I know you start with your – start small and then just kind of grew the business as you get more and more sales?
Brian: Also I moonlighted doing it. I was still in the Navy when I started my business. So I still have that pay check coming in. I wouldn’t just quit my job and be like I’m going to do this. Because you will run out of cash really quick. The first three years of the business we lived on – my wife stayed in the Navy and we lived on her salary and all the money I made when you start a business to ploughs right back into it. And since she had her income still it allowed me basically you know, sure we lived on a little bit less but to use all the money from the business and get the business up and rolling until it was basically self-sustaining. If you’re just like I’m going to do this and you quit your job and the pay checks are not coming in, it becomes hard. I was also using some of the pay checks that you know when I was moonlighting doing it for the first year to buy some supplies, keep things going. It’s a weird feeling if you had a job for a while and even though you’re like excited for the business I mean and you know the pay checks stops next month or two month and then there’s no more guarantee. Aw god, I got you know $1,000 in the bank account until it actually happens you can think about it then the emotions are flying like oh I’m not going to have any money after this. But on account of that it’s much better than I think you know – it’s much more [doable] to own your own business. It’s worth the risk especially if you think you know if anything fail and it didn’t work out for you, you can go back to your industry or find the same job you know I would give it a shot.
Chris: Yeah. Cool. Thanks again Brian for coming on. I guess just one more time could you share the URLs to your various ecommerce stores where our listeners can go out and check them out.
Brian: The one where we sell the Christmas Story stuff is like I said a little bit of an off URL it’s Redriderleglamps.com that’s all the Christmas Story stuff and then Christmas Vacation Collectibles is where you can find all the Christmas Vacation stuff and you can find all that stuff on RedRiderLegLamps but Christmas Vacation Collectibles still sells just Christmas Vacation collectibles but we have a section on RedRiderLegLamps for you know – want to make sure if somebody, if a customer is looking for it they could find it there.
Chris: Yeah. Alright. Thanks again Brian for coming on the MakeMoneyOnTheInternet.com podcast. It was a lot of fun having you on and I’m huge fan of the movies and I’m glad you’re able to give us some tips on how to get into the niche ecommerce business.