When Miami-based Sobe Promos (asi/245603) was named Counselor’s Fastest-Growing Distributor of the Year in 2017 (based on its three-year 1,000% sales growth) and was named to the Inc. 500 list, it was impressive. But when you factor in that the company, founded by three college friends from the University of Miami in 2013, has a staff with an average age of 32, it’s jaw-droppingly so.

(From left): Scott Latimer, Chris Ferriter and Spencer Kramer, the founders of Miami-based Sobe Promos.

CEO Spencer Kramer, vice president of business development Chris Ferriter and CFO Scott Latimer, know a thing or two about successes, missteps and the pressure of running a business. With an elite list of clients (Google, Walmart, Audi, Citi, Uber, the Miami Heat, Hilton, Comedy Central, MTV, Absolut, Bud Light, Spotify and numerous pro and college sports teams) and nearly 60% sales growth in 2019, the company was on track to reach Kramer’s goal of hitting $20 million by 2022. Then, of course, COVID-19 took hold and everyone’s business – certainly Sobe’s clients in the sports, travel and hospitality fields – came to a dead halt.

Adjusting to the New Reality
Sobe had 20 employees before the coronavirus shutdowns and quarantines took widespread effect in March, and despite the drastic drop in business felt throughout the promo market, Kramer says he’s been able to keep all 20 staffers. “Sobe’s sales were down about 32% from March 1-June 11 when compared to last year’s numbers,” Kramer says. “If you excluded PPE that number would probably be 90%. We were also able to offset the loss with a direct-to-consumer face mask website we launched at the very beginning of the pandemic.”

Two things that have always made Sobe different was their deep knowledge of overseas sourcing thanks to Kramer’s late father Jeff, who founded Bullet Line and instilled in his son a robust slate of life and business knowledge. The second being the team’s ability, due no doubt to the generations they’re a part of – Y and Z – to leverage social media to find new clients and keep in constant contact with current ones. As Ferriter said when they were last profiled in Counselor three years ago: “We’re not interested in doing things the way they’ve always been done – we’ve figured out some ways that work better for us and our clients. I wouldn’t recognize most of my clients if they walked into the office right now … we communicate over social media and with texts. Clients DM me all the time.”

“If you’re nimble in your thinking, you can pivot on a dime and respond to new demands within your market.” Chris Ferriter

Kramer maintains that they were able to see the pandemic coming early because of the amount of sourcing they do in China. “Right around Chinese New Year many of our suppliers were letting us know they were having trouble getting things out of the country due to the coronavirus,” he says. “As the pandemic developed, we would communicate with our vendors in China and ask them how everything was. We started to realize a lot of them would end their emails saying something like ‘we must always wear a facemask,’ so we started having some internal talks and, though it was very hard to imagine, we came to the conclusion that this would probably become commonplace here in the U.S. We shifted all our resources toward pitching in to create custom-designed face masks and a full direct-to-consumer e-commerce site. Within 48 hours we had the site up and running and we posted a mask we did, which was imprinted with an image of a ribald coronavirus meme to the internet. It went viral and within the first week we’d taken 10,000 orders.”

This pivot alone, Latimer says, allowed the business to keep running without having to make any of those difficult layoff or furlough decisions. From that point it was all-hands-on-deck to help maintain inventory, fulfill orders, handle customer service and keep the website functioning properly. “We were also able to donate over $20,000 toward the CDC Foundation fund to fight the pandemic, which we were super excited about,” Ferriter adds. “On top of that we donated 60,000 cloth masks to the homeless populations of Miami and Tampa and also to help underprivileged youth in NYC.”

Check out the video podcast interview Michele Bell, who oversees ASI’s Editorial team, did with Spencer Kramer, Chris Ferriter and Scott Latimer, the owners of Miami-based Sobe Promos and the recipients of the 2020 Counselor Distributor Entrepreneurs of the Year award.

CJ Schmidt, president of Top 40 supplier Hit Promotional Products (asi/61125), has known the Sobe team since they started the business. “A few words I would use to describe the Sobe team would be super-creative, extremely dedicated, philanthropic and just overall great people,” Schmidt says. “They make it easy to do business with their company, as they’re fair, ethical and treat us with the upmost respect, which also resonates with their clients. They’re personal friends at this point, and I’m proud of what they have accomplished, and cannot wait to see what the future brings for them – even the guy from New England,” he says, laughing about Ferriter growing up in New Hampshire while he, Kramer and Latimer are all native Floridians.

Put to the Test
There were countless leadership lessons learned during this pandemic. Two crucial ones, Kramer acknowledges, were embracing adaptability and not being so stubborn as to think you can only sell your core set of products. “When life throws you an unforeseeable, unthinkable event like the entire world fighting something that so little was known about, you’re going to have to make some very difficult decisions if you want to keep your business running. At that point, it wasn’t about selling promotional products; it was about what can we do that’ll keep our operations going,” Kramer says. “That’s a tough spot to be in when the business is something you’ve dedicated your whole life to, but as a leader you must make an informed decision that has your entire company’s best interest in mind. I hope I’m never in a situation where we’re making decisions during a global pandemic again, but I’ll tell you what: if one sneaks up on us, we’ll be well-suited to handle it effectively.”

Ferriter admits that the biggest lesson they learned from a business standpoint is that you can legitimately launch an entirely new business by selling a product you’ve never really handled within 48 hours while spending a relatively small amount of money to do so. “There are many phenomenal technologies out there that allow you to create beautiful websites in minutes, and if you’re nimble in your thinking, you can pivot on a dime and respond to new demands within your market,” he says. “We swapped from B2B to B2C in two days and it allowed us to continue our operations without scaling back our expenses too much.”

Latimer points out that he, Kramer and Ferriter also learned that their people are their greatest asset and in times of uncertainty you need to lean on each other – much easier to do in Sobe’s case when the two guys in it with you have known you since you were teenagers. “The beginning of COVID-19 was scary both on a business level and a personal level and we were constantly on the phone with each other just figuring out what exactly should we do,” Latimer recounts. “Do we sit back and ride it out? Do we pivot and hope that whatever we do doesn’t damage our core business in the long run? The communication among each other was paramount in ensuring we made educated decisions on how to handle our business and the wellbeing of all of our employees.”

Ferriter, the consummate sales guy who’s the face of the company, has this advice: “Trust your gut. It was damn near impossible to envision the United States doing something like mandating the wearing of face masks, but we took a leap of faith and launched that website on basically the exact same day the CDC came out with its recommendation. That timing alone helped keep our business operational. It was a risk we took but I’m very glad we did.”

The Road Ahead
On track with the rest of the industry, Sobe is starting to see a small uptick in promo business. “Considering the baseline is basically zero, we’re excited to see any sort of order that isn’t a face mask,” Ferriter says with a chuckle. “It’s not a large uptick but it’s something.” He notes rising interest from hospitality and the beverage market that are looking for signage or items printed with QR codes for touchless menus. Construction companies need summer uniforms and healthcare facilities are looking to inform visitors of new procedures and regulations.

Latimer, the CFO, acknowledges that Sobe’s goals have had to shift. “We were seeing phenomenal growth up until the beginning of March and anticipating a record year for our sales team,” he says. “We’ve now basically lost out on five months and have seen many of the events that drove our large orders postponed until 2021. It’s a tough outlook but our goal is to get creative in our product offering and see if we can at least maintain the levels of sales we were doing last year.”

For Kramer, who’s an only child, the benefits to running a business and surviving a once-in-a-generation global catastrophe alongside two people who are like brothers to him has been incalculable. “It’s been great to have these two to bounce ideas off of and I trust them completely to ensure the team is staying motivated and doing everything we can to keep our business moving forward,” Kramer says. “Chris has been instrumental in identifying new potential opportunities, and Scott has been a tremendous help in taking care of the details to make sure we keep running smoothly. In times like this it’s amazing to have partners whose opinions you truly value and who can make sound decisions under major distress. This is the most stressful situation we’ve found ourselves in as business owners and as a trio we feel like we’ve made some snap decisions that have proven critical for the long-term survivability of Sobe Promos.” And Latimer, who single-handedly dispels the notion that finance people aren’t fun, chimes in: “When times are really stressful, that’s when cocktails come in handy.”