Launching a Wholesale Marketplace | Johny Kello and Renee Zawaideh, MatchSquare

(Speech to Text)

Launching a Wholesale Marketplace | Johny Kello & Renee Zawaideh, MatchSquare

Mike Koelzer, Host: [00:00:00] Johnny and Renee, for those that haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

Renee Zawaideh: My name is Renee Zda and I and my husband, both of us own the Village Pharmacy and compounding. I am the merchandiser for Match Square, and I am also the buyer for all of our stores.

Johny Kello: My name is Chinese Kello. I'm the co-founder and CEO of Match Square, as well as, uh, Match Rx. Match Square is a B2B marketplace that is about to launch, that helps primarily pharmacies by curated items, specifically for their front end through unique niche brands. And we're excited to be on the cast and introduce ourselves to everybody.

Mike Koelzer, Host: I'm a bit envious of MatchRx and Match Square. Here's why I've spent a whole life with products, shelves and products and things like that. I was thinking a little bit about your stuff as we were gonna talk today. You guys don't see any product. In your building whatsoever?

Do I have that right or is that just a wild dream of mine?

Johny Kello: Uh, your spot on Mike, like. know, one of the beauties of a online marketplaces is just that it's really connecting folks, connecting, uh, a buyer and a seller a need and a want to somebody who can supply that product, whether it's Matchrx or Match Square, uh, that's the beauty of a marketplace, and it's directly shipped from seller to buyer

but it's so challenging finding the right product. So we wanted to say, Hey, you come to one place. We'll help you find those products, we'll help curate them. We'll put them in collections for you and you point and click and get the things that you need. And oh, by the way, we'll make some suggestions for you so we can make it easier.

It's a funnel for you as an independent pharmacy to help shop here. It.

Mike Koelzer, Host: Renee, you're too young for this being only

29, 

Renee Zawaideh: Mmm. Oh, you're so nice 

Mike Koelzer, Host: Johny 

Do you remember buying Dell computers? I'm sure, maybe not Dell, but when you and I were youngsters, this was 20 years ago, we'd go buy a Dell and we'd spend three weeks looking for it. Maybe talk to our dad about it, who didn't know what the hell was going on with computers, but you needed that comfort level because it was such a big decision.

And then you had like five different Dells and you were lining up the categories and so on. Now, I can practically buy a computer when I'm in line picking up my kids or something on my phone. You just go to Amazon or something and buy the people's choice for that. And Renee, I think that's a huge part of Match Square is you having that experience and you're saying, Here's the Dell to get, here's the people's choice.

Go ahead and get it.

Renee Zawaideh: These are the best sellers. This is what your pharmacy needs, whether it's point of purchase or whether it's, you know, pharmacy must haves, or simply a collection called Get Started. We've created it so pharmacists and techs or whoever's doing your shopping, we've made it easy for them to shop.

Johny Kello: The reason was developed was because of the feedback we got from our members at Match. How else can we help them? We didn't want to have just one tool in the toolbox. We wanted to give them another tool. 

And so we said, Okay, this is almost a two year journey. This doesn't happen overnight. This kind of product to develop from scratch with the team that it takes, uh, doesn't happen overnight. It's hiring the right folks and bringing them in, seeing your vision, then falling in line with that vision and saying, Okay, we believe in it.

And so Square was. 

Mike Koelzer, Host: You guys did a hell of a good job leading up to this because if it was, I would get so impatient with things. It's like, if I think of it today, I want it out by tomorrow morning. You know? And you've really done a good job of. Collecting email addresses. I'm sure during that time you're making some future decisions of your business, before the launch date.

Did you have a proof of concept before you invested the two years into this?

Johny Kello: No and we didn't, we didn't expect it to take two years either. What we didn't wanna do is we didn't wanna bring in a secondary service. People have been used to match our, and the level of, of, of service that we've been able to provide. We just didn't wanna bring out something that was subpar.

So it, a, it took a little bit longer, but what, you know, we're looking at today, it's well worth it. And, uh, you know, we've got, uh, over 400 brands already signed up, 75,000 products that are gonna be launched. And, you know, we're gonna make sure that it's products that, you know, pharmacies across [00:05:00] the country need from small town USA to an urban pharmacy.

And we're gonna grow it, but we're gonna grow it properly. We're gonna grow it with products that pharmacies need, not blankets and pillows, uh, unless it's a specific type of blanket or pillow that are gift items or beach wear during the seasons.

Mike Koelzer, Host: It seems like almost an obvious business. I imagine you didn't need a whole lot of proof of concept. You've got people telling you before you're even doing this, that you want this. All right, Johnny, you said two years was a long time.

How long did you want it at first and why was Renee Dragon her feet all this time 

Johny Kello: I, I, I liken it to building a house. You think you're gonna be done by December, and you are, but it's the following December. . But, you get the house, right? And that's what, And so we wanted it to be in about a year to a year and a half,

Mike Koelzer, Host: Gimme an example of something that just took longer than you wanted it to.

Johny Kello: A simple example. It's, uh, the email communication triggers that it takes when an order gets processed, when it starts, whether it goes to the buyer that confirms their order to go to the brand, that lets them know that an order's taken place. Then taking a step further, all the triggers that take place specifically for like, say Stripe, the payment operating system that takes place.

There's a lot of them. What we call APIs in the IT world, there's a lot of tie-ins and plug-ins that we have to create with Stripe that creates this opportunity for the transaction that takes place so that, you know, the credit card does transfer the dollars, it does hold it in the right escrow. Again, all those little details when you're building it, take more time than you'd hope, but you know, now that we've got that done and it's behind us, you know, it's been great.

The other piece of it was, I think that I would say the easier lift, although we thought it would be a little more of a challenge convincing brands that, you know, there is a marketplace in the pharmacy space. But what we kept doing was visiting a lot of brands and reaching out to a lot of brands. Whether it was, through the phone or through trade shows and other rate means, what we found was some of them already had pharmacies as their customers and they wanted.

And us being really narrow, narrow, meaning the pharmacy, independent pharmacy space, they instantly recognize that that is a big market that they have not been able to reach. So creating like this distribution and marketing channel on their

behalf, it just, the light bulb goes off with these folks. So that was something that was a pleasant surprise that the brands that we wanted, or at least so far have been onboarding.

And think about the end game.

They're gonna have to pay somebody whether it's a wholesaler for distributing the product and moving it and, and creating the markup or saying, Hey, I get to touch all these different buyers at one time, and I think they recognize the ease of use. And Amazon helps us in a lot of ways because what's happened in the world today is we're not the only marketplace, whether it's Airbnb, whether it's Uber, whether it's, Google's finding a flight.

You're going to the computer and you're sourcing the best way to get products from around the country. And that's what we've done. But again, specifically for this space, which takes a lot of the, uh, fat out of shopping for these independence.

Mike Koelzer, Host: How does that work? What is that connection when you guys want a brand in Match Square because you know this is gonna be good for pharmacies. 

Johny Kello: These are niche products, Okay? And what that means is that these are smaller companies, so this could be anywhere from a one to 20 person outfit, and sometimes there's a larger company, so you're not selling. We don't want Proctor and Gamble, we're not selling Nestle.

So generally speaking, when Renee reaches out, she's talking to the owner

And what we're doing is we have really the value add proposition that we've, we've put together. We have a, we have a team that reaches out after Renee kind of does the handoff after the introduction. And, and from there, you know, we talk to them about how we reach out to a bigger audience, a more niche audience that they're probably used to. And it's not a heavy lift, it really isn't. It's once you kind of lay out the courage for them, uh, you know, the ones that we think have vision on where the world is heading, they jump in.

You know, there's other, not everybody does, but that's a matter of time. I mean, even through today. An example of that is we still pick up another hundred to [00:10:00] 130 new match RX members every month after 13 years. So we don't expect everybody to dive in on board day one. But over time, you know, we think that the one, the, the buyers that you know, want to have unique products that wanna separate themselves, all that.

They'll find places like us and hopefully it's us, but the brand's, more importantly, the unique ones that Renee is talking about, the ones that Renee has relationships with and even the ones that she doesn't have relationships with, where we think that they make a lot of sense for independence. We, we, we will reach out to them via email, via phone call, through our sales team, and it just is like any other process.

It's really laying the cards out, explaining what we do. And if they buy into it, great. If they don't, we'll circle back to them, especially if we want them on the site.

Mike Koelzer, Host: It sounds like a no brainer to me? Why do you think somebody would say no?

Johny Kello: I mean, there's a few reasons. One is capacity. Uh, they might be sitting in other marketplaces and they just don't have the capacity. 

Mike Koelzer, Host: They'd sell too many with you,

Johny Kello: Well, , you'd think, or that's, it's keeping up catalogs and from one marketplace to the other and it's updating. And some people, again, you know, it, what might be, you know, easy to understand for you isn't always the same for everybody. And, and, and that's okay. Sometimes it takes a little more than one time or oftentimes, and we've already gotten referrals from other brands for brands.

So sometimes that brand needs a second opinion that says, Hey, you should check out Square, or one of their retailers calls and says, Hey, you know, I really like this platform that you guys might want to consider for more business. So we're not in a hurry to sign up anybody and everybody. We really want to be cognizant.

Who our me member is who's buying, and then give our buyer what they want. Not everything under the sun. Otherwise, you know, I think they're gonna get lost like other marketplaces.

Mike Koelzer, Host: Are there any brands that for some reason don't wanna go through someone like you maybe wanna do, you know, their own sales in the store.

Are there any fundamental problems when you go to a company?

Johny Kello: Sure. Um, a real simple one is liquid, right? If you're selling a liquid product that is heavy to deliver and it costs a lot of money. Uh, a marketplace is very challenging because of the cost of the delivery of the product. So in those instances, they need more traditional distribution channels.

Like a whole freight load goes to a distribution warehouse and they get shipped out, you know, through a truck and dropped off. That is a fundamental reason why you couldn't execute, or not always, but oftentimes can't execute. If it's a low priced, heavy product that costs a lot to ship, then there could be, you know, that, that could be one of the reasons why you'd say, Okay, I'm gonna take a pause on marketplaces altogether,

Mike Koelzer, Host: In order goes through Math Square and how often is it going right to the company's building or through a distributor that that company has,

Johny Kello: Oh, in this instance for Square, because of the size of the brands that we're talking about, uh, you know, I can't pin a number on it yet, but I would say somewhere between 80 and 90%.

Mike Koelzer, Host: is coming from their own building. 

Johny Kello: Yes, correct. There are some, uh, products on here, or rather some brands that are on here, that are on here that have a large product selection.

And so they serve more as a distributor of a lot of small products. 

But that's a small segment. I would say maybe anywhere from 10 to 20% of what we're talking about.

Mike Koelzer, Host: Last December, I guess, we finally went 100% healthy. So we don't have any candy. We don't have any cards. We don't have anything of anything but. That doesn't have to be boring. I'm imagining that you've got some cool impulse health things, and that's what we like our store to be.

I just got a magazine today, remember The Sharper Image, magazines. They always had fun, healthy stuff. Do you have cool health stuff? Do you have any bulky things that you might find in a store like ours that are healthy, but they're kind of equipment still? I can't even think of what it is. Do you have stuff in that area or is that getting a little bit too big

Johny Kello: Yeah, so I'll give you an example like we have a product called Happy Tummy, right? It's an aroma heat therapy, it's like an herbal pouch for cramps and pain relief. So something simple as that, that, you know, where do you find that so we've got 

that 

Mike Koelzer, Host: that's 

exactly the stuff [00:15:00] because people can find 

crutches and canes and they can find the Tylenols and things like that. But there's that middle ground of both gifty stuff, 

but also fun impulse health stuff that You guys have a cool niche in

there. 

Johny Kello: Things. A, a cute little baby hugger that you strap around you for pregnant women. Again, where do you find these little things? You know? So you've got all these little kind of cool, little off the beaten path type of items that you can buy here, and I think that's what you're talking

about.

Mike Koelzer, Host: Things that are healthy, but they're not boring health. They're still in poor health.

Johny Kello: And here's a speed massager that you're talking about. It's called a Jeanie Rub variable. It retails for 270 bucks.

It's things that you can carry that nobody else is carrying out here.

Mike Koelzer, Host: We've got an end cap in our pharmacy. It's right walking in the back door and it's probably, I've got like 50 chains within like 10 miles of me. This is probably one of the hottest end caps in our like three mile radius. And I got a bunch of crap on it all the time. I'm an embarrassment to the neighborhood with that end cap. But you don't have the cool stuff to put on it.

Renee Zawaideh: Well, Match Square has the cool stuff for you, and we've already made it easy for you. We've already done the lifting for you. There's curated products on there that are already organized, and they're built into collections. So let's say you have no idea what to buy, or maybe you do, there's a search bar, there's collections, there's everything that you could think of.

You put in that search bar and it'll pop. our favorites, our must haves. If you have no idea, we can help you. Whether it's our customer support, you can call us and say, Listen, I, I wanna shop for Christmas. I have no idea what to buy. I'm gonna tell you my favorite five, five to 10 brands that you should buy for your store that I know that worked for me, and I know they'll work for you.

Johny Kello: Again, how do you separate yourself? Why do people come to your store with that end cap?

And people are still loving coming there because it's different. It's new. And even if they don't buy that, they're gonna buy something else because it's unique. Your store has got products that nobody else around you serves. And that's the whole idea behind what we're talking about here, it's not the stuff that you're gonna find at Target, right? And that's how you're gonna separate yourself. 

Mike Koelzer, Host: We no longer have a major wholesaler because after we got rid of all of our brand names, we kind of told them to take a hike and they kind of told us to take a hike. But I still sneak on some of the major wholesalers and you'd think a company like that could put a picture of their product On their list when you go down, you'd think with billions of dollars there. Be able to show me what's on their website when I wanna order something, instead of going through the hieroglyphics of trying to decide what, you know, the left and right and universal and all this kind of stuff is. And I imagine you've got some pretty pictures on your website that's coming up.

Johny Kello: Yeah. Absolutely. So you think about marketplaces and when you're going through a discovery, right? I mean, you know, picture's worth a thousand words. and that's what, we're gonna have. Every product that you're gonna see has an image and sometimes more than one image. Each specific brand will have about three images that they'll display. But the idea is that you're gonna see what you're buying, you're gonna see the size of it, you're gonna look at it and, and then be able to make some really quick decisions.

 I don't know why the wholesalers don't display it that way, but I don't think that's, you know, their core focus.

Their focus is somewhere else. And, and that's okay.

Let, Lets small guys like us come in and fill

that void. 

Mike Koelzer, Host: As you're on this journey, the last two years, what was your most negative emotion? 

Johny Kello:  it's anxiety over getting it right, number one, uh, getting it done sooner.

And then making sure that what we're building is what was, uh, asked for. Getting the product mixed. Right. Getting the merchandising right, because I think that it's easy to say that, yeah, the idea ideas are great and they always sound great, but it's that execution of the idea and us, you know, taking this extra time to get that idea right at the details of it. And then over time continue to improve obviously. and as brands hear about us and hearing our story from folks like you, Mike, who by the way, we're thankful for being on the show, it's about hearing these stories and them going, Oh, hold on. I see that. I know I can help [00:20:00] and it can help me. Um, so I think that's kind of, uh, if you were gonna say frustration or anxiety, it's been only a few months, but would be more about just finishing dotting the I's and crossing the 

T's 

Mike Koelzer, Host: I really like your buildup, and I imagine that in a product like this with the really good advertising that you guys do around Match Rx and this, I imagine that you wanna present something pretty darn tight upfront. Because if people are gonna take a look, some people might look for three seconds, but if some people might look for 20 minutes and they want to be satisfied, because if you came out, let's say, you came out, you know, four months ago and it wasn't ready. You got too eager to do it and it wasn't ready.

There might be some people that don't return or don't return quickly until you have a second launch or something.

Johny Kello: That's the whole idea. So look, you know, in the IT world they talk about mvp, minimum viable product, right? And so they always say build it, iterate, build it, and iterate. You don't have that opportunity when you're talking about what we're building here. It's gotta be MVP times 10 as your starting 

point and then you can go from there.

So a lot of different sites, whether it's an app or whether it's a website, can start with MVP cuz they have a few customers here and there. We can't afford that. We already have close to 350, uh, retailers, Pharmacies already signed up for Square and so when we turn that switch on, or when we had that switch on, we can't have them go, oh, 350 disappointed folks.

No, you know, we've been testing and retesting this to make sure that when they do turn that light switch on, the light goes.

Mike Koelzer, Host: What do you picture? Might be a speed bump. You know, something that, I mean to be great if the speed bump was, you know, way too much business or something like that. What's a potential bump that might happen down the road, but you really can't prepare for it right now?

Johny Kello: The speed bump is, do we not make it super easy for our customer?

That would be the concern. So if, if we don't make it easy, that would be the concern that I would see coming down the road. Um, but I don't, I don't, I think we, I think we've got that covered. But if you, if you ask me what would be a concern, us not making this really simple for the customer.

Renee Zawaideh: We're gonna help you merchandise a product. how to do it, how to sell it, where it came from, what kind of story it had, you know who the brand is.

And I also think it's important that we wanna listen and we wanna hear from other independent pharmacies and how they merchandise. I think it'll be really fun and exciting to see their pictures. And maybe it's something that somebody else didn't think of. 

And I think that the brands that you carry, that we carry make sense, right? Whether I'm shopping for birthday cards, you know, I wanna keep my cards fun and fresh. I change 'em periodically because our customers don't wanna come and see the same 10 birthday cards that I've had for the past six months, right?

So, what's nice about a marketplace is that there's so many unique different gift cards that you get, um, greeting cards that you could buy. And from greeting cards I buy candles, and from candles I buy, you know, cake toppers, and from cake toppers, I buy wine tags. You know, they all, all these brands feed off of each other and, you know, you can make a nice, cute little end cap, you know, Happy birthday, ready.

You know, and I think, you know, it's a one stop shop. You, you can find everything from what I said, from a greeting card to a 

birthday candle to a cake topper.

Mike Koelzer, Host: What I thought about doing, because we have all health stuff, like I said in the

store, but Match Square might be able to help me with this. I thought there are things related to health. Maybe not medical per se, but what if there was, you know, coffee mugs that talked about health or what if there were, you know, get well cards.

That's all we had in our pharmacy was to get cancer cards, or, you know, some jewelry that talked about I beat, the heart attack or something like that. Health stuff , impulsely, gifty stuff, I know I'll find all that eventually on your side. If it's not there now,

Renee Zawaideh: it's 

there. 

Johny Kello: Here's the cool thing about that, Mike. And if it's not there today, uh, guys like you, uh, pharmacists around the country are gonna ask us to, you know, provide these different manufacturers or these brands. And, and that's the whole idea, is this really does become like a community in [00:25:00] that, you know, you saying, Hey guys, at my square, you know, I really want a natural deodorant.

Like, I want this rustic Ma. Right. That's a specific brand. Right. And I think others can use this product across the country. Great. So we're, we're of the mindset to go out and reach them. Right. Cap cva, the arthritic pain reliever. You may have that at your store already, but that's a small independent guy that's here in Michigan.

You know, if that's working at your pharmacy, could it be working in California pharmacy? Of course it can, but the California pharmacy doesn't know that. So if you have it, and we don't, we're gonna reach out to our pharmacy retailers and say, Hey, tell us what else you'd like to see on the site.

Because they don't want to go out and keep shopping different sites, different distributors, the whole nine yards. Keep it simple and keep it in front of them. And we're gonna ask the community to help us make it better for them. It's not a one way street. It's not us dictating what's on the site.

This is just the start. 

Mike Koelzer, Host: I like what I'm hearing from you guys because Culture and tribe and all that is kind of in words to talk about a business, but your RX match is already built on relationships. You know, so if you were here and telling me about this and your company had a bad track record with, uh, you know, customers or something, or even just no track record, I might question that, but the fact that Match Rx is built on relationships is a pretty cool thing to think about that going to over the counter conversation.

Johny Kello: I don't think we could match where it could be here if it wasn't for Match and not because of the site. It's because of the relationships and what we've been able to produce from a customer service standpoint. I think without that, there couldn't be a square because building a marketplace, you don't get 350 retailers.

You don't get 400 brands before you launch on a product or on a marketplace. By just introducing an idea, it really has to come with collateral. And our collateral has been 13 years of trust with Match X. So that's, that's really helped us, uh, you know, deliver the message cuz they, they, they took a pause and listened.

Because of match, 

not because of this new idea. 

Anybody can come up with an idea. 

Mike Koelzer, Host: Johnny, someone comes into you at MatchRx and Match Square and they. No more health, no more pharmacies. Repeat your business in another industry.

 Are there other industries that could use that match? Our X idea sharing stuff?

Johny Kello: Okay. So you think about Matchrx is we're another sharing community. Uh, the difference though is that Match X is so specific to a very regulated industry with specific price points for specific products. I don't know of an industry that has the uniqueness of drugs. Because you think about pricing, for example, you're always buying out a discount at Match specifically for the brands.

Generics are off, kind of across the board cuz you know, you don't get good, uh, whack pricing on generics. So to transfer that into another space Rx no, because it's so regimented.

It's too 

challenging. 

Mike Koelzer, Host: The closest you'd get would probably be like, selling body parts, I mean, you're so regulated that nobody needs that much regulation.

Johny Kello: Well, I'm just counting all my fingers. They're here. So, good.

So , uh, The reason to match Square took a while because it's not like we took the Match Rx platform and spun it out with a new name and a new product makes, and said, Okay, 

here you go. It's night and day. and where Square you could see. Go into another industry, think about Amazon. Does Amazon even sell books anymore? You know, I joke, but the idea is that Amazon started with books but that model is easily transferable to other types of products.

Match Square is much more adaptable. Rx on the other hand, very regimented space. And it doesn't move well. Square definitely. But with Square, even if we were to introduce it to other verticals, other industries, uh, you know, I think that we would never get away from our core. Our core really is independent pharmacy.

The runway is to tackle a really big, long runway, which is independent pharmacies. If, you know, if you look at N cpa, they, they tell us, and through ncpdp, they, there's 22,000 give or take, independent. We have a long way to go. We have a long way to go to figure out, you know, if two thirds of those are retail pharmacies, we've got 15,000 [00:30:00] pharmacies that should have a, either a robust or super robust front end.

Uh, and if they don't, they really need to think about how, you know, to introduce that to their customer.

Mike Koelzer, Host:  Johnny and. Renee I'm excited to look through the site. I used to get the JC Penney and Sears catalog, you know, and look at the forts and stuff they had in there, and all the different NFL bed sheets and stuff like that.

And I'm kind of past that, but I need something to scroll and to look at all the cool stuff. So I'm really eager to get on. Thank you both for joining us today. This is an exciting venture. And I think people are, well, I think they're just gonna have fun looking at this and then just kind of having the ideas of what's there.

And Renee, I know you're gonna have a lot of cool ideas on 

Renee Zawaideh: There too, Yeah. 

Mike Koelzer, Host: community sharing and stuff, it's gonna be a cool thing.

Johny Kello: Thanks for letting us share our story with you, how we got here, where we're going, and I think, hopefully in another year or so we get to revisit this together and talk about where we've been and where we're going 

in a year, because I think that this is just starting.

Renee Zawaideh: Thank 

Johny Kello: care. Thanks, Mike.