GPO Plus is a product development, manufacturing and distribution company which offers a diverse portfolio of high-quality innovative products sold directly to consumers and retailers. The company says its goal is to expand its product line and distribution reach to meet market demand and the needs of its customers.
Mr. Pojunis spoke about the Direct Store Delivery (DSD) “white glove” model that has vastly improved sales for the company. When the pilot program was launched it grew average monthly sales from roughly $500 to $2,100 per store.
Mr. Pojunis spoke about the Direct Store Delivery (DSD) “white glove” model that has vastly improved sales for the company. When the pilot program was launched it grew average monthly sales from roughly $500 to $2,100 per store.
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NewsTranscript
00:00 Welcome, it's Michael Marouth Benzinka joined here today by Brett Pagionis.
00:05 He is with GPO Plus.
00:07 Very excited to hear the story here and go through what GPOX is working on.
00:11 Brett, it's a pleasure to have you with us.
00:13 Kick us off here and give us a quick overview of the company and what you guys do.
00:17 Sure, Michael. First, thanks for having me on the show.
00:19 I really appreciate it.
00:20 I'm really excited to start sharing our story with the investment community because, you know,
00:24 we spent the last little over a year, you know, building out our new distribution model.
00:28 And we're really excited because we've finally been able to put up some good numbers.
00:32 And so to answer your question about GPO Plus,
00:34 we are a product development, manufacturing and distribution company.
00:38 Our business is organized into basically four main areas.
00:41 We have products, branding, sales and distribution.
00:44 So let's start with products first.
00:46 So our products are products that are catered towards specialty retailers.
00:50 That's your smoke shop, vape shop, convenience store, gas station, bodega.
00:55 What we do is we look to try and find products that have high margins
00:58 and then get those products distributed to those retailers.
01:02 Underneath products, we have three different types of products.
01:04 We have our GPOX brands. Those are our house brands, sometimes our value brands and premium brands.
01:09 We have licensed deals and licensed products where we go and license with companies like we have with
01:13 Yinglings to develop a recreational hemp line.
01:16 And then we also have just products that are partnership products that we are basically just distributing for them.
01:21 We don't own the product. We don't have any equity in the product.
01:24 But they're products that sell very well. So that's the products.
01:26 The distribution, which is what I'm absolutely most excited about.
01:30 We're doing something called DSD, which is direct to store delivery.
01:33 And our DSD model has proven out to be very, very exciting and very, very, very cash flow positive for us, which we're excited about.
01:41 The distribution, what we did initially is we started with one regional hub that service 12 states in 570 locations.
01:50 We since now move to a spoken hub model where we have our regional hubs and then we have our mini hubs.
01:55 And our mini hubs are to go and service areas where we might only have 30 or 40 anchor stores.
02:00 And then once we start to build these things out, currently we're in Lubbock, Texas, with with our first regional hub.
02:06 And initially that was servicing all 12 states and all 570 locations. And we knew that that wasn't efficient.
02:11 So by setting up these micro or these mini hubs, we're able to now effectively service, you know, multiple stores in multiple areas.
02:18 And once that network is built out, that's when we can start bringing in additional sales reps and get additional customers that we're representing.
02:25 On the branding side, the main focus there is to try and engage with our audience,
02:31 find products that people like, develop multiple sales channels for getting our word out on these products.
02:38 We've developed some really cool technology that's going to help us with that and help aid us with that.
02:42 I'm sure we'll talk about that later. And with our sales, we've broken up our sales into two different categories.
02:46 One is B2B and the other one is direct to consumer. So with B2B, that's kind of our main focus today.
02:52 That's where we have our anchor stores. We work with a company called Yesway AllSup.
02:56 We have another brand that we work with called Texas Born in total.
02:59 So just under 500 locations that we service. And on the B2B, that's great.
03:03 We generate revenue. We get our products out into the market. But the margins aren't as high as direct to consumer.
03:09 And we've been working since October on developing our own proprietary technology called MSRP.
03:14 And MSRP allows us to create hundreds of websites using a long tail SEO strategy,
03:19 where every time we have a new product that comes out, obviously that has its own dedicated website.
03:24 Everything's fully search engine optimized, all linked together.
03:27 And that's where I think we're going to see and realize the highest margins will be on the direct to consumer side.
03:32 So those are our four main areas. Terrific. Great recap there, Brett.
03:36 Thank you for giving us kind of the framework for focusing in here.
03:39 Let's talk a little bit about the recent shareholder update where you reviewed some of last year's accomplishments.
03:44 You started with three goals. One, enter into distribution agreements with brands to increase your product offerings.
03:49 Two, signing up retailers as customers. And thirdly, identifying distributors that you can acquire.
03:54 Seems like you guys had a really great path of success with these.
03:57 Can you talk to us a little bit more about these highlights?
04:00 Yeah, absolutely. And just if I may, I'm going to take a quick step back.
04:03 So like most companies, COVID really disrupted our business.
04:07 And right when we were getting ready to launch our distribution model, COVID kicked in.
04:11 So we had to pivot and do a couple other things.
04:13 And we got through it and we came back even stronger.
04:16 And so to your point, yeah, I think that when you look at what we've been able to accomplish,
04:21 we set out in April of last year saying we're going to launch DistroPlus, get back to our core competencies.
04:26 And like you said, first things first, we want to increase the number of retailers and customers that we have.
04:31 We've done a heck of a job doing that. Increase our product offerings through some acquisitions
04:35 and some strategic relationships. We've been able to significantly increase our product category,
04:40 our product catalog, rather. We're up to 157 SKUs now and growing.
04:44 And then the third one was the distribution.
04:47 So we did acquire through an asset purchase agreement a company out of Texas,
04:51 Lubbock, which kind of kicked this whole thing off.
04:53 And so I think that we've not only achieved our goals, but far exceeded what our goals were.
05:00 If you asked me back in April of last year where we would be, I didn't think we'd be this far along.
05:04 So I'm really, really happy with how the team's been working and all of our success.
05:08 So I think we've done a great job. Outstanding. Brad, thank you for that.
05:11 Talk to us about the product lines a little bit.
05:13 How do you determine what products you manufacture or represent at GPOX?
05:18 Sure. So when you talk about products, you first have to talk about who our customers are.
05:22 And so our customers, again, being gas stations, convenience stores, smoke shops, vape shops, bodegas,
05:28 we're looking for products that have high margin and products that are going to move.
05:33 And so, you know, we've been very heavy with CBD, recreational hemp.
05:37 That was our original entree into the market, if you will. And we've done well with those sales.
05:42 But what we're realizing is that we need to diversify so it's not so heavy on the recreational hemp.
05:48 And so now we're going to continue to look for, you know, more high-price or more high-margin products that we can get out there.
05:55 And products that people want and products that people are going to use.
05:58 And so when we see a need in the industry is whether it's you through one of our customers saying,
06:02 hey, we love to have reading glasses or we would love to have, you know, pick a product that's not recreational hemp.
06:09 We'll look into that. We'll find either the best of breed companies that we can team up with and,
06:13 you know, represent their companies or in some cases we'll go out and we'll manufacture our own products.
06:18 And so, you know, as I mentioned earlier, we have three different types. GPOX brands, our house brands.
06:23 We have licensed products like we did with Yinglings. And then we have products that we represent.
06:28 Outstanding. Bret, I want to ask kind of an industry question here.
06:31 What, if any, do you see as the largest regulatory barriers to your industry?
06:35 And what would spur growth if changed on the regulatory side of things?
06:39 Great question. So, you know, obviously we keep a watchful eye on what's going on, you know,
06:44 from a legislative standpoint nationwide, state by state. We pay attention to these things.
06:50 What we're kind of anticipating is with the new farm bill that's going to come out this fall.
06:55 And of course, there's going to be an updated Hemp Act. What we're hoping for is more stringent labeling,
07:00 more stringent testing. And for the love of God, please, better manufacturing.
07:05 You know, the problem is you don't want to have, you know, the old saying, one bad apple, it ruins a whole bunch.
07:09 Well, the reality is we don't believe in transparency. We believe in hyper transparency.
07:14 We don't believe in compliance. We believe in over compliance.
07:17 And so I think it would be a really good thing for the industry if we could get better testing.
07:22 Go to FDA approved labs. Make sure that you have slight variances from other labs.
07:27 Make sure you have what it is you're selling is what you're truly selling.
07:30 That would be a good thing because that would probably get rid of a lot of these products that are just not best of breed.
07:36 I also think that the labeling is important. People need to know what they're buying and it should be there in big text warning.
07:42 You know, this will get you high or whatever the case may be. But better labeling is certainly going to help.
07:47 And I think, you know, you've heard that adage additive about, you know,
07:50 people making these products in their basement or manufacturing in places that are not GMP certified.
07:56 That's got to change because, you know, again, if there's some products that come out that are bad and customers, you know, are unsafe, that's not good for the industry.
08:03 So if those three things happen, we'll be thrilled.
08:06 And then also recently, DeSantis just signed a bill which prohibits the sale of any CBD or recreational hemp products to minors under the age of one,
08:13 would be minors, but under the age of 21. And I think that those are good laws and good new regulations to have.
08:18 So as long as people are playing by the rules, which we clearly are, we think that this new regulation is going to help the industry overall.
08:26 Wonderful. Now, I want to run through this really quickly as we get closer to time here,
08:30 but talk to us really briefly about your new White Glove direct to store service. What can you tell us?
08:35 Yeah, so this is what we're really excited about. So traditionally, when you look at the distributors,
08:40 let me take a step back when you look at like convenience stores and gas stations,
08:43 they typically deal with one or two main distributors, which accounts for 80 to 85 percent of the products, you know, the products that they sell.
08:50 The other, you know, 15 to 20 percent of the products could be dozens of distributors.
08:54 And what we found is that these companies would rather work with less distributors that do a good job and represent more products than more distributors and fewer products.
09:03 And so that is part of what we're doing with increasing our product offering.
09:08 But there's a couple of things on that. One is the direct to store delivery.
09:11 Our new White Glove service is pretty revolutionary. So unlike some of the major companies like Cormark or like a McLean, you know,
09:17 they're 100 plus year old companies. They drop off a pallet in the back or the front of the store.
09:22 And now it's up to the employees, the managers to break that pallet apart and put it into inventory, stock the shelves.
09:28 We do all of that. So when we show up and you see someone from Distro Plus, they're going to have all the products right there.
09:33 We do a before and an after picture. We take the inventory.
09:36 We stock the shelves and make sure everything's clean in the right location.
09:39 And the employees and the general managers don't have to lift a finger. Well, that's not true.
09:43 They have to sign off saying that we came there. But they love that because, again, it's so hard to find good people these days.
09:48 So what we've realized is people really want this White Glove service.
09:52 And so I think the DSD model is what we're going to be really scaling out.
09:55 And just to give you an example on that, we launched our first pilot program with 100 stores.
10:01 Those 100 stores two months prior were doing about $508 per month per store on average in sales.
10:07 Once we introduced the White Glove service, it was over $2,100 a month.
10:10 Those are big differences. And so we feel that as we continue to grow this out and by the way, we're expanding three more hubs, Dallas, Austin and Albuquerque.
10:20 That will allow us to provide that same level of White Glove DSD service to another 116 stores.
10:26 So, yeah, we're really excited about the DSD service.
10:30 Outstanding. Now, again, moving quickly here.
10:32 This service was a major driver in your 320% increase in revenues quarter over quarter.
10:38 You reported in your Q4 results. Do you expect this growth to continue as you move ahead here?
10:42 I absolutely do. As I mentioned, we're launching three more hubs and increasing our footprint to another 116 stores.
10:47 That gives us 216 stores. I mean, I'm going to go out on a limb here and say that I think that by the end of August, beginning of September, we should probably double our current revenue.
10:57 So, yeah, I think that this is going to be a big driver moving forward.
10:59 And in addition to that, we're starting to introduce our own products and GPOX branded products.
11:05 And those products obviously have a much higher margin and it's going to help with, you know, improved gross margin maintenance.
11:11 Outstanding. Brett, a final question as we close here. A key takeaway that investors should know about your company.
11:16 You've given us a lot of info already and obviously there's a lot to pay attention to.
11:20 But big takeaway here that you want Benzinga, retail investors and the audience at large to know about you guys moving forward.
11:26 Absolutely. So I'm going to first direct all your viewers to go to GPO plus dot com slash IR.
11:31 Sign up for our investor portal so you can stay up to date with what's going on with the company.
11:34 But the first takeaway is we are in an explosive growth mode right now.
11:39 Things are going great. We spent a lot of time building up the model, fine tuning the model.
11:44 And now we've been executing on it for the last quarter. We're doing very well.
11:47 And we see a lot of blue ocean out there.
11:48 So we feel very confident about how we're going to continue to grow the company in a controlled manner over the next two or three years.
11:57 That's the first takeaway. The second one is we have a pretty tight float and we've done we've been very disciplined as far as,
12:02 you know, keeping the number of outstanding shares low. And most of those shares are in the hands of key investors and management.
12:09 So we have a really good control of the company and where the shares are.
12:13 And then finally, I think that when you look at companies like ours, especially in the OTC markets,
12:18 we always see a company that has like a lot of sizzle or no steak or a lot of steak and no sizzle.
12:22 I think we have both. I think we have, you know, I hate to say it this way,
12:26 but the sex appeal for having, you know, really cool, unique products that have unique value proposition.
12:31 But then we also have the fundamentals with our revenue components.
12:33 So again, I want your investors and your viewers to take a look at what we're doing and stay on our radar
12:40 because we have a lot of good things coming down the pipeline.
12:42 Fantastic. Brett Pujonas, GPO Plus.
12:44 Outstanding to hear all the things that you guys have on the horizon and what you're working on currently.
12:48 Can't wait to chat again soon. And thank you for all the updates so far on what you've got in the works.
12:52 Thanks, Michael. I appreciate it.
12:54 Thanks, guys.
12:56 Thank you.
12:57 (upbeat music)
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