King of the supply chain

King of the supply chain

“Faster than Amazon” e-commerce delivery platform earns franchise owner the title of CBC Innovator of the Year

The unlikely path that led this year’s CBC Innovator of the Year to our winner’s circle begins in the spring of 2003 at the Harbour Station arena in uptown Saint John, New Brunswick. The Flames, the city’s then-American Hockey League franchise, were in the middle of their last-ever regular season home game. To mark the occasion, organizers of the night’s 50/50 draw had decided that instead of handing out the usual half-the-proceeds cash prize to the draw winner, they would give away a brand-new Dodge Neon.

And the winner was… Roger King, an early twenty-something local guy at loose ends with his future.

By his own admission, King had not been a brilliant or dedicated student. In high school, “I got what my father called ‘Gentleman’s Cs,’” he acknowledges with laugh. Those Gentleman’s Cs and a can-do attitude had so far only resulted in life-lesson-learning, low-wage, low-status jobs. He’d worked as a swim instructor and lifeguard at the local Canada Games Aquatic Centre, as well as on the night-shift restocking crew at a Sobeys store in hometown Rothesay. He insists he enjoyed the experiences, but neither held out the promise of a satisfying lifetime career.

So King said thank you very much, sold his shiny new Dodge Neon back to the dealership, took out a student loan and enrolled in a business degree program at Saint Mary’s University in Halifax. “It was the first time I ever even visited Halifax,” he says now.

While the proceeds from his 50/50 win and the loan helped cover his tuition and books, they didn’t make much more than a dent in his day-to-day living expenses. He continued to pick up spare change wherever he could: bartending and waiting tables at the university’s student lounge or at the popular downtown Argyle Bar + Grill; dealing blackjack and climbing the hospitality industry ladder from busboy to server at the high-end Bacchus restaurant in Casino Nova Scotia.

At the same time, he also began to scheme about finding more promising entrepreneurial opportunities he could make his own.

“I was always interested in business,” he says simply, “and there seemed like lots of opportunities in Halifax.” Why business? “I like the idea of the accountability that comes with running your own business. In the restaurant business, I’d worked for some great and some not so great supervisors, and I wanted to see what I could do on my own.”

The more he thought about a business that both fit his own interests and also offered him the potential for success, the more he returned to the idea of… selling nutritional supplements.

King had been a high school athlete—he played basketball, swam competitively and was an “avid” weight-lifter—but inevitably found himself more interested in training than in competing. He’d begun taking supplements in high school to help him with focus and endurance.

King, of course, was far from the only athlete to take supplements to get a training edge. The U.S.-based National Institutes of Health reports that two-thirds of elite track and field athletes at both the world and college levels regularly take one or more nutritional supplements—proteins, vitamins, minerals, creatine, caffeine and amino acids in tablet, capsule, liquid, powder and bar forms—to “improve strength or endurance, increase exercise efficiency, achieve a performance goal more quickly, and increase tolerance for more intense training.”

Although the role and rationale for nutritional supplements is often debated, there is no debate about their commercial value. According to the NIA, sports nutrition supplement sales in the U.S. in 2016 nudged $6-billion. In Canada, that figure is still a respectable $190-million a year and growing, most of it spent on protein bars, powders and liquids. According to Robinson Pharma, a leading American manufacturer of supplements, Canada has become “one of the global leaders” in the supplements sector with a relatively active population in which 38 per cent of Canadians report taking at least one nutritional supplement every day.

At the time, King roomed with some varsity athletes and, through them, knew plenty of others. He started modestly, organizing group orders for friends and friends of friends as a way to help cover the cost of buying his own supplement supplies.

Then, three-quarters of the way through his degree, King decided the time was ripe to grow his sideline into something more. He set up a supplement delivery business out of the trunk of the five-year-old Acura he’d bought to replace the Neon he’d won. Billing himself as the Supplement King, he “convinced a distributor I was going to be a good risk for them,” and the distributor let him max out his MasterCard to buy stock. Although credit card interest was then running at 20 per cent, “I figured as long as I was able to sell enough product to pay that balance every month, then I wasn’t paying any interest.”

His sales pitch was simple: convenience and price. He could buy the supplements in bulk and deliver them to his student-athlete customers’ apartments or dorm room doors faster and cheaper—“I had no fixed costs”—than they would have had to pay to go and buy the supplements themselves in a retail store. He describes his role at the time with a laugh as “a glorified pizza delivery boy.”

At first, he simply hoped to make a few bucks while covering his car payments, gas and the portable debit machine he used to process payments. But he soon realized there was a consumer demand for the service he was selling—and that the demand went well beyond the confines of Saint Mary’s and neighbouring south-end Halifax campuses.

He began slapping flyers on car windshields outside local gyms, offering weekly promotional deals along with his contact information. Soon, he couldn’t keep up with the number of calls to his cell phone.

Although he is quick to make the point today that he learned a lot at Saint Mary’s—“those marketing and economics classes helped prevent me from making some mistakes”—he eventually decided he should take a semester off school to work fulltime on developing his business.

He never went back.

In 2008, King stuck his toe in the retail ocean, opening a kiosk in Scotia Square, a downtown Halifax mall and office tower. He strategically located the kiosk next door to a Goodlife Fitness franchise, the goal, of course, being to attract customers on their way to and from regular workouts. The kiosk more than accomplished that goal.

In the process, however, King discovered something significant and unexpected. Many of his customers were not athletes or bodybuilders, or even standard-issue fitness buffs. They were office workers from the towers above and around the Square, all of them looking for a little nutritional boost or a healthier lifestyle.

“We attracted every kind of customer,” he marvels.

Which led to his next expansion in Bedford Place Mall in the middle of Halifax’s growing and affluent suburbs. And then, a year after that, he bought and rebranded a competing supplier in Park Lane Mall in the heart of Halifax’s trendy Spring Garden Road shopping district. And then…

Roger King had found his niche—a gaping hole really—in the marketplace where he could not only attract athletes and fitness fanatics but also target “employed, health-conscious young millennials” who had fitness goals but needed advice and product to achieve them.

“We’re not in the body-building market,” King says today. “We’re a fitness goals retailer.”

Understanding that audience also helped the company tailor its social media. Instead of strident, sales-oriented messaging, the company strives to create an “atmosphere in which our audience can share their goals and we can give them content to help them reach those goals.” Supplement King now posts exercise videos, healthy recipes, encouraging quotes. “If we do a good job showcasing our brand, our personality and our values,” King told one interviewer, “our customers make their own decisions about shopping.”

They have. Today, Supplement King Canada—still privately owned and headquartered in a nondescript but bursting with product warehouse in Dartmouth’s Burnside Industrial Park—has become one of the largest and fastest-growing supplement sellers in Canada with physical stores in every province except Quebec.

The nutritional supplement market’s heavyweight dominators are still GNC (General Nutrition Centers), the U.S.-based, publicly-traded global behemoth with more than 7,000 storefronts worldwide, and Popeye’s, the homegrown, Canadian-owned retail and franchise operation with 125 outlets across this country. But Supplement King is pushing its way into at least Canadian contention and consciousness.

Having opened 18 new stores in 2018 (that’s one every three weeks!) the company is closing in on 50 retail outlets. In fact, following this year’s Atlantic Business Magazine Top 50 CEO gala in Fredericton on May ninth, King will fly out to Edmonton to “cut the ribbon” on Supplement King’s 50th store.

Most Supplement King stores are operated by franchisees. While would-be operators pay a modest $10,000 for a 10-year licence, King told America Retail in 2017 they must also be prepared to pony up close to $300,000 in total to get the Supplement King look—“we’re very fussy about our layout and lighting plan”—and stock their shelves with its products.

While King won’t publicly discuss average outlet revenues or return on investment, Supplement King franchises are apparently attractive to investors. Some of his franchisees now operate as many as five Supplement King outlets, he says, a sign of confidence in the brand.

Supplement King Canada has become one of the largest and fastest-growing supplement sellers in Canada with physical stores in every province except Quebec. Having opened 18 new stores in 2018 (that’s one every three weeks) the company is closing in on 50 retail outlets. Shown here, the Moose Jaw location.

Robert Taylor is certainly confident. The owner of Taylor Flooring, a successful Nova Scotia-based company, Taylor first became interested in 2015 in helping out his son, Bryce, a fitness buff who was then working with the military in Edmonton, find a supplements franchise there that he could operate.

After doing his homework about growth in the supplements business and about Supplement King itself, Taylor called Roger King. “He didn’t know me from Adam,” Taylor laughs. “I asked him about a franchise in Edmonton,” he remembers. “He said there were no openings. Then I asked, ‘What about Calgary?’ It was only an hour or so away. No franchises available there either.”

But then, a few months later, King called Taylor, also out of the blue. King had now done his own due diligence on Taylor and his business investments, which included a different but successful franchise operation.
Would Taylor be interested in acquiring Supplement King’s three then-corporate-owned Halifax outlets, he wanted to know?

King would admit later he had mixed feelings about selling what he calls “my ‘babies,’ physical evidence of what I’d built,” as he told Atlantic Business Magazine in 2017. “They were profitable, but, after some soul searching, I admitted I couldn’t give them the attention they deserved… I am focused on growing the national franchising business.”

So Taylor quickly grabbed up those three Halifax franchises and recently added a fourth, all of them now managed by his son who has moved home from Edmonton.

It’s worked out well for all concerned. “I’ve never once had a problem dealing with Roger,” Taylor says today. “He’s only young, but he’s aggressive. And fair. And he knows the business.”

As for King, he says focusing on national growth was the right decision for him. “As president,” he says, “part of my job is to vet new franchisee applicants. We’re now getting two to three [applicants] every week.” He and company leasing director Adam Conter spend much of their working days traveling the country scouting potential “real estate opportunities” for even more new outlets.

All of that may help explain why Roger King’s company scored number two on Profit Magazine’s top Atlantic Canadian companies in 2018; why King himself has been an Atlantic Business Magazine Top 50 CEO for the past three years in a row; why he was a gold award winner in the 2014 Halifax business awards; and why he earned a 2017 Ernest & Young Atlantic Canadian Entrepreneur of the Year.

But Innovator of the Year?

Roger King has a plan. Later this year, Supplement King will launch a “bricks and clicks” omni-channel e-commerce delivery platform called Next Day that King describes as “the first of its kind within a franchising space in Canada.”

It took 18 months and three different contracts with developers to piece the website and back-end together the way he wanted it, King says, but the new company-owned online delivery system, which will be “faster than Amazon,” will effectively turn every Supplement King franchise into its own shipping department.

The reality, of course, is that it’s far easier for consumers to buy supplements online these days than it is to trek to a neighbourhood strip mall to buy them from a bricks and mortar store. If you plug “buying nutritional supplements online in Canada” into a Google Search box, for example, the search engine spits out 92.5-million results in just 0.73 seconds.

Using King’s new system, customers will be able to go online and place their order for everything from ISOFLEX whey protein isolate to Kamikaze “military grade,” pre-workout caffeine, even Supplement King’s own branded workout gear from its 4,500-item virtual catalogue.

“When I was operating out of my trunk,” he marvels, “I couldn’t offer any more than 200–250 items.”

Being able to order online may seem like no big deal from a consumer perspective. But the system will instantly harvest the customer’s postal code to determine the nearest Supplement King physical retailer, automatically check that store’s integrated and updated-every-10-minutes inventory to see if the outlet has the products in stock. If it does, the system will then deliver the order to the buyer’s door the next day. Orders over $75 will be delivered free. There’s even an option for customers to choose to come into the nearest store to pick up their order; if they do, they’ll get a coupon to save money on future purchases. If the item isn’t in stock at the franchisee, the system will seamlessly re-route the order to the head office warehouse and it will be shipped from there.

Traditionally, King says, the problem with online delivery systems in franchise-based operations is that they have pitted corporate head office against the company’s own franchisees. A customer could order online from the head office system or make their way to their closest physical retailer. If they ordered online—the most convenient option—the retailer was cut out of the sale. “That’s not fair to the franchisee,” King says, “so we set out to find a way to keep the local franchisees strong while making sure we were able to deliver our products efficiently to our customers.”

The new system’s back-end will also allow Supplement King to track orders and then distribute the revenues, net of fees, back to the franchisee-deliverers, making sure they get paid for their role in every transaction.

King believes his new omni-channel e-commerce site will not only benefit existing franchisees and attract new ones, but it will also eventually become a model for other franchise retailers. “Right now, no one else in our world is doing this.”

He says he’d like to be thought of as “a risk taker, a leader that challenged the large established competitors in our space and forced them out of complacency…. to re-think their business plan.”

He’s getting there.

“Would you like to see the place?” Roger King asks as we wrap up our interview in a small window-less board/meeting/ideas room at the company head office in Burnside. There isn’t a lot to see except for Bella, a friendly lapdog/greeter who hangs out in the front-end reception area. Beyond that, there are just a few individual offices. That makes sense. There are only 13 head office employees, “of whom just five are management,” King says proudly. “We’re very small, very nimble.”

Most of the 12,000 square-foot head office, in fact, is given over to a cavernous warehouse filled with company merchandise. While product flies off the shelf, staff turnover, King notes, has been “remarkably low. It’s amazing to me that we’ve been able to attract and keep such bright, hard-working people.”

In part, King believes that’s because “we give our people clear goals, authority to execute, accountability and incentives for results. Everyone is well trained, knows their job, understands and buys into our business plan, and each is empowered to make a large number of decisions autonomously… I keep nothing from my team, respect their abilities and in return we continue to earn each other’s trust.

“My style,” he adds, “is distinctly upbeat. I foster a ‘solutions-based’ environment. I lead by example through demonstrating that no task is ‘below me’ and bestow considerable autonomy on my team. I have learned in just a few short years that the success of those around me predicates my level of future success. I encourage my staff and franchisees to scrutinize and challenge our policies, practices and decisions with their observations, insights and ideas. This is how I tap into everyone’s brilliance and stay sharp and connected to our customers and each other to improve, innovate and grow.”

Despite his own hectic travel schedule, a busy work and home life—he is the father to two young daughters—King, now 39, says he still carves out time each day to work out and, of course, he still takes his supplements.

And, oh yes, he no longer owns that Acura. Or drives a Dodge Neon. “I drive a 2015 Land Rover,” he says. Its $100,000-plus sticker price is both a tangible sign of his entrepreneurial success and also a reflection of the simple fact “I’ve always loved cars and trucks. It’s is an area of splurge for me.”

For a guy who started out selling supplements from the trunk of a used car not much more than a decade ago, he’s earned the right to the occasonal splurge.

Leave a comment

Your email address will not be published.


*


ADVERTISEMENT