Forget mousetraps--build a better cooler. Brothers Roy and Ryan Seiders seized upon that idea in 2006 when they launched Yeti Coolers, an Austin-based business that sells extrarugged, "grizzly proof" coolers designed to keep ice from melting for longer periods of time. Yeti products can retail for up to 10 times as much as coolers sold in big-box stores like Walmart. Still, outdoor enthusiasts have fallen for the brand, hook, line, and sinker. With an 829 percent three-year growth rate and $29.2 million in revenue, Yeti clinched the No. 458 spot on the 2012 Inc. 5000. When customers are passionate about your product, explains CEO Roy Seiders, price is no object.
When we launched the company, we focused on selling through specialty stores such as gun shops and fishing outfitters. Every customer who walked through the door of a small sporting-goods store used coolers, but those stores weren't carrying them. The problem was that coolers had become a commodity item. The big players, such as Igloo, Coleman, and Rubbermaid, sold their products almost exclusively to big-box chains such as Walmart and Target. Small mom-and-pop specialty stores couldn't compete--coolers take up a lot of space and sell at low price points for poor margins. We offered them a better point of sale. Business has been like a rocket ship ever since.
Educating buyers about the reason for the cost of our coolers was a big challenge in the early days. They were used to paying $39.99 for a cooler, and we were asking $400. We spent a lot of time explaining the benefits of our coolers. Durability is important when you're loading heavy equipment into the back of a truck and can't afford to constantly replace a latch. Ice retention is vital for things like weekend fishing trips or weeklong rafting excursions. We told customers that they could still have a cold drink on the last day of their trip. It was a huge help to have high-profile hunters and fishers reinforce that image with testimonials.
At the time, no other cooler company was advertising to outdoor enthusiasts or taking advantage of the professionals in the sport. Ryan and I couldn't quite believe it; it was wide open.
If you're a game hunter in the Northwest, you're going to know Jim Shockey. If you're a serious saltwater fisherman, you're going to know Flip Pallot. Both of them have given video testimonials on our site. We approached them even though we didn't have the resources to sponsor those guys at the time. We'd give them our cooler; they'd use it and give us a testimonial. They were sponsored by the best sunglasses companies or the best fishing-rod companies, but no other cooler company was sponsoring them, so there was no conflict. Then, as Yeti got bigger, we were able to go out and sponsor these guys with a billboard or a 30-second commercial on their shows.
Every once in a while, you'll see our product show up on shows like Swamp People or Duck Dynasty; connecting with influential people and professionals is a big part of our outreach.
People are really passionate about their hobbies--whether it is college kids who use our coolers for tailgating or hunters and fishers. All of those groups are willing to pay extra money for products that will last. They wouldn't be caught dead with cheap gear, because they identify with those brands. It can be hard to gain the trust of consumers, but once you do, it becomes very powerful.