Best Boards. Best Service. Best Prices.
Our direct to consumer ONLY business model allows us to sell the finest quality inflatable paddle boards in the industry AND offer best in class customer service all at shockingly low prices. Our simple mission has always been to make great quality paddle boards, then leverage our direct to consumer model to sell them at fair prices. We've been executing on this mission for the past 12 years.
Our mission is why one of our inflatable paddle boards was named the #1 SUP worldwide by the prestigious Robb Report. Some of the runner up paddle boards sold for 3-5 times the price we sell ours for.
This exemplifies how we offer the best boards AND the best prices AND the best customer service. Our model is to cut out the middleman and deliver incredible value. It's a model that has led to Tower becoming Mark Cuban's best investment from Shark Tank, and one of the biggest success stories in the history of the show. It's also led to over $50 million in sales (and more importantly over 100,000 happy customers that saved big buying direct to consumer), made us the #1 fastest growing private company in San Diego, and one of the fastest growing companies in America (#239 on the 2015 INC 500).
How Do We Do It?
There are basically four guiding principles that have made Tower Paddle Boards what we are today. After a decade of organically building one of the strongest brands in the paddle board market, we've aggressively diversified to position ourselves to execute the second stage of our strategy to offer great SUP boards at fair prices. Tower is a mature, diversified direct to consumer brand today, and the full benefits of that now accrue fully to you, our customer, in the form of the same great paddle boards and exemplary service, all at fair prices. Here's our formula.
- Don't sell crap
- Skip the middlemen
- Leverage word of mouth to minimize advertising spend
- Think outside the box to continuously become more lean
#1: We Don't Sell Crap
Our philosophy is the foundation of great marketing in today's highly connected world is simply having great products. Make a product so noteworthy, and offer it at such a bold value, that people will tell their friends about it. While we look at things from a marketing prospective, we're an obsessively product focused brand. We rarely ask how can we produce this cheaper, we ask how can we make this better. Then we use our efficient marketing strategy to get that "better product" into customers hands as cost effectively as possible.
#2: We Skip The Middlemen
We believe business has the power and responsibility to be a force for good. We believe it's time for consumers to start enjoying the benefits of globalization, instead of those benefits being enjoyed only by calculating middlemen and corporations in the form of dramatically increased profits. If consumers and brands are connected directly, consumers' buying power has the potential to be much more powerful - giving them the ability to work less, or spend their hard-earned money in a way that significantly increases their quality of life.
The middlemen are what drive most of the cost in today's globalized world. The cost of producing the product is only a small piece of the puzzle. The larger cost drivers are the distribution channel a brand employs, the advertising a brand spends to sell to you, and all the middlemen in the middle. Get rid of the middlemen, innovate on distribution, and figure out how to sell with as little advertising spend as possible... and you change the game.
At Tower, we leverage the Internet to sell direct to consumers ONLY!
We organically leverage Google's network of search queries to generate customer prospects and sales at a near zero cost of customer acquisition... passing all the savings onto you, the consumer that finds us. When it made sense (when they were only talking a small revenue share), we leveraged Amazon's network to get the Tower brand billions of consumer impressions, generate well over $10M in sales there, and massively grow our installed base of customers around the world. We sold nearly 750 boards and did almost $400,000 in sales of inflatable paddle boards in one day on Amazon. Jeff Bezos would later mention us in his 2016 annual letter to stockholders.
When it no longer made sense to sell thru Amazon (as they today take a 40-50% retail like revenue share of most sales thru the platform as you now have to advertise to be found), we re-focused on truly direct to consumer sales only. Understand, if you're buying other SUP brands thru Amazon, know Amazon is taking 40-50% of what you pay in most cases so understand you are basically buying retail. If you're buying a really cheap board, the price you paying is still inflated. It's just even worse quality that you realize and you really don't know what kind of Chinese non-brand crap will be delivered today. We do still sell on Amazon, but at a 20% higher price than direct thru our website to accommodate Amazon's revenue share take, but we don't advertise there (which many brands spend another 30% margin on or more).
Today, we freely leverage various social media networks and our installed base of customers around the world to generate sales at little or no cost... with all the savings being passed onto today's consumers.
#3: We Advertise Only As Needed
We didn't advertise one dime for the first four years of Tower's existence. We didn't have to. Our products and our amazing value proposition spoke for itself and spread like wildfire. In 2014, we would be named the #1 fastest growing private company in San Diego... of any company, not just paddle board companies, even VC funded tech companies. In the first 12 years of our history, our average ad spend was 2.6% of revenues. Many brands spend 10x that. It's not that we don't have advertising expertise. We do. I've actually been in the online space since 1999 and I was buying PPC ads (ads on search engines) for $0.01 per click on a site called Goto.com in 2000, years before Google Adwords even existed. We just think it's silly to rely solely on advertising to artificially grow a transactional brand. We're more interested in building a brand over a 20-30 years period. Some of our competition, what we call "Ad-heavy" SUP brands, probably spend more on the ads to sell you a paddle board then they do on the production of the paddle board itself. Just seems silly to us. Keep this in mind next time you click an ad and buy a paddle board, or anything really. Think, how much did I just spend to be advertised to.
It's becoming more challenging in today's world to not advertise at all (as we did in the first 12 years of Tower's maturation) as Google and Amazon's monopoly power consolidates and it becomes more pay to play to be seen anywhere, so we have had to evolve our strategy to include a modest ad spend. Still, we are firm believers that if we just offer the best products at the best value, word will spread. It's an old school way to organically build a brand over the long term, but we're okay with that. We're content to just keep passing all the savings of our direct to consumer business model onto consumers.
#4: We Think Outside of the Box to Become More Lean Every Year
Coming from a start-up background, Tower has always been a lean operation. We keep a small, highly proficient team and keep costs down. Instead of throwing money at marketing, we starve our marketing budget and force our team to figure out growth hacks... passing all the savings onto our customers.
When we were presented our award as the fastest growing private company in San Diego, we were a surf company with a team of five doing over $5 million in annual sales. Most of the people in San Diego don't think a surf company is a real company, so imagine their surprise when we won and I said my whole team was here, all five of them! Later that year, to reinforce the notion that you can do more with less in today's connected world, we moved the whole company to a five hour workday, 8am-1pm. I told everyone on the team that I'm giving you your life back, but the ask is that you've got to just figure out how to be as productive or more productive than you were before or you will be fired. That's how we built a lean, highly productive staff and operation. I wrote a book about our Five Hour Workday experiment (which went on full time for 2 years, and we still do in the summer) a year later and it got press in over 20 countries and spread the idea to over 10 million people worldwide. The idea is snowballing and could literally change the way millions work. The New York Times, the Wall Street Journal, and major media outlets worldwide have and continue to cover the concept to this day.
By 2016, we had established Tower as one of the top five SUP brands in the world, so we decided to begin execution of stage two of our mission of making great paddle boards backed with industry leading customer service, and selling them at fair prices. We began to focus on diversification to further drive our operational costs down. The idea was we could cut our fixed costs in half if we ran two businesses with the same staff, the same marketing team, the same customer service team, the same office, the same showroom, the same warehouse, the same fulfillment function, etc. And if we launched five, we could cut it by 80%. Today, we have a fully operational, growing and award-winning eCommerce brand selling electric beach cruisers called Tower Electric Bikes that leverages all our redundant functions. This creates further cost savings we can pass on to customers of both Tower Paddle Boards and Tower Electric Bikes. We also figured out how to collect rent instead of paying rent for our office, fulfillment center, and local retail showroom by opening the Tower Beach Club, a 4500 square foot high-end waterfront event space that we rent out daily for corporate events and weddings. It doubles as our pop-up retail showroom for our direct to consumer products when events aren't happening. Event proceeds cover the costs of the space and kick off a tidy profit that covers our adjoining offices and fulfillment center and more. Again, all of these cost savings accrue to our direct to consumer customers in the form of even better direct to consumer pricing on high-quality paddle boards... and now electric bikes.
Now, please help us keep costs down for you by telling all your friends where to go when they want to shop for inflatable paddle boards! And if you're shopping for yourself, try our quick & easy paddle board finder quiz to find the perfect SUP for you.
Welcome to Tower.
Stephan Aarstol
Founder & CEO
Tower Paddle Boards
