Million Dollar Monday

Frustration to Fortune with Marty Lott

March 15, 2021 Greg Muzzillo
Million Dollar Monday
Frustration to Fortune with Marty Lott
Show Notes Transcript Chapter Markers

Marty Lott, SanMar’s Founder of the nation’s premier supplier of wholesale imprinted clothing and accessories, shares his famous yellow t-shirt story with Host Greg Muzzillo. What was a complete disaster quickly turned into recognizing two foundational principles that are key to driving success.

Chapter Summaries

  • 01:17 - All About Marty Lott
  • 02:54 - Swinging a Sledgehammer
  • 06:20 - Starting SanMar with One Dollar
  • 09:33 - The Yellow Shirt Story
  • 14:34 - No Pay for Seven Years
  • 17:05 - Computer Crash Catastrophe
  • 21:58 - Mindset is Everything
  • 24:20 - The Next Generation
  • 29:45 - Words of Wisdom


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Marty Lott:

And I got these shirts in and it was from somebody out of state and they were far away and they were the largest distributor in America at the time. And I got some Hans, I got some Fruit of the Loom. I got some Fifty 50s some. Cotton and I must've had five or six different shades of yellow and it just wasn't going to work. So I called them up and I said, here's what I ordered. Here's what you shipped. We need to make this right. And they go, you're COD, we have your money. You got the shirts, the deal's done.

Greg Muzzillo:

Hello and welcome to Million Dollar Monday. I'm your host, Greg Muzzillo bringing you real successful people with real useful advice for people with big dreams. I understand big dreams. I turned an investment of $200 and a lot of great advice from some really successful people into my big dream Proforma. That today is a half billion dollar company. Hello and welcome. I'm excited to introduce our guest for today and if you've ever worn a t-shirt, if you've ever worn a polo shirt with a brand on it with a company logo on it, any kind of a shirt that might've been from Nike or Eddie Bauer or Champion or Carhartt , Gildan, Hanes , and more you've worn some of this guy's clothes. And it's an exciting story about , a man that started a business in college , and built it to something that has approached two and a half billion dollars in sales with 10 distribution centers, five and a half million square feet of inventory space, a phenomenal success story. Marty Lott . Thank you for joining me. My pleasure. All right. Now, first and foremost, you're the founder of SanMar. It's a 50 year old company. So I have to congratulate you on your 50th anniversary.

Marty Lott:

Thank you. It's also my 50th wedding anniversary,

Greg Muzzillo:

Makes it easy to remember? Alright , so I want to get to the story about the college and the founding of SanMar, but let's back up to even when you were younger, when you were growing up as a boy, tell us about the situation grew up in, where did you get your motivation? Uh, where did you get your work ethic and when did you start developing dreams of business ownership?

Marty Lott:

So I was incredibly fortunate to know my great grandfather, my grandfather and have my father with me for many years of my life. Um, my great grandfather was an entrepreneur. He had a luggage store. My grandfather had the luggage store across the street from my great-grandfather . I was very close to my grandfather. He was alive until I was about 35 years old and we just had a great relationship and I learned a lot from him. He had spent business years during the great depression. He was an anti- debt type of person. He believed in equity. He did not believe in leverage. And I was interested in business, I guess, on, because we had a lot of those conversations together. My dad was in business for himself. And , um, I actually started working when I was about 13 years old. I really worked when I was about six years old. Um, he was doing direct mail and my sister and I would stuff envelopes and seal them and put a stamp on them. And he paid us by the piece. So working piecework , um, I think is where I probably learned my work ethic. And I probably liked work better than I did school. so I worked every summer and the summer I was 13. I worked the entire summer and every summer after that, so I liked work. I found it fulfilling. It was something that I was good at. I learned to manage people when I was in high school.My dad was doing this big demolition and reconstruction project on an office building. And he put me in charge of a group of about 12 to 15 people to do demolition. And we're talking about swinging a sledgehammer or using a shovel or a wheelbarrow. And I learned how to work. And that was also incredibly strong. There's nothing like swinging a sledgehammer. Haven't done it for years, but it's a way to get strong. I believe you. And one day one of the employees came up to me and he goes, boss, you need to do one of two things. I either want to raise or I want a title and I go, okay, what would you like to be? And we gave him a title, but it was one of those experiences that you sort of carry with you that there's a self-worth into work and people have to feel good about themselves. And I think I was fortunate to learn that at a very young age. So , aspirations of how big I would get or what I do, I didn't really care. I could have sold mufflers and I would have been happy, back in the sixties. People actually bought mufflers. Now, I don't even know if you buy a muffler, but that was sort of my young beginnings arm. And then I went to college. So are we ready for my college project?

Greg Muzzillo :

I am excited to hear about your college project. Yeah , the beginnings of SanMar.

Marty Lott:

So I had two roommates in college and one of them worked for an ad agency and the ad agency gave him a project of developing what we would call today, a promotional product for college students. And I had been in the national ski patrol and I had been in charge of buying their backpacks. And I'm not quite sure how I got that job, but I got it. And I designed a backpack for a brewery for this ad agency. And it was called Heidelberg. They were owned by Carling brewing, which was the world's largest brewer in those days. And I designed this backpack and I had this little manufacturer in Seattle who had 25 employees and made me a sample. We presented it to the agency, they presented to the brewery and they bought some , and that was my first sale. And so now I've got to sale and I've got to buy it and I got to pay for it. And I got to collect money, which means I needed a bank account. And so I went to the bank and I said, I want to open an account. And they go, well, what do you want to deposit? And I said, well, I don't want to deposit anything. I just want a bank account. And they go, well you have to put money in to get a bank account, I was like, you know , 20, 21 years old. So he took a dollar out of my pocket and I gave it to the teller. And , um, I started SanMar.

Greg Muzzillo :

With a dollar with a dollar

Marty Lott:

And the bank , uh, the backpack was incredibly successful. They came back and ordered more of them. I paid my bill to my supplier. I got my check from Heidelberg and everything went really quite smoothly. They came back to me a couple of months later. And they said, you know, we want to roll this out worldwide. Can you do a quarter of a million of these? And I went to, my little guy, had 25 sewers and he took out his calculator and he started punching on it. He goes, well , that'll take me about 15 years. And I go, okay, so this is not going to work. And at that time there were trading companies from Japan that we had offices in Seattle then I hooked myself up with one of them. And , I ended up importing backpacks from Japan because in the early seventies, Japan was the least expensive place in the world to do manufacturing. That's changed very rapidly. Mind you, but, I got into it, very entrepreneurially. I wanted to be an entrepreneur here again. I didn't really care about the commodity. I wanted to be an entrepreneur and after that I ended up getting into t-shirts and I was selling printed t-shirts for a while . And one day I ordered a hundred dozen Hanes , hundred percent cotton, yellow t-shirts. And every one of my employees knows my yellow t-shirt story. We tell it to them all. We want them to understand it. I got these shirts in and it was from somebody out of state and they were far away. And they were the largest distributor in America at the time. And I got some Hans, I got some Fruit of the Loom. I got some Fifety50, some Cotton and I must have had five or six different shades of yellow and it just wasn't going to work. So I called them up and I said, here's what I ordered. Here's what you shipped. We need to make this right. And they go, you're COD, we have your money. You got the shirt , the deal's done. And I'm really young, I'm in my young twenties. And I was upset to say the least very upset. So I went home and I talked to my wife about it. And we decided if you could be the biggest in the country and basically lie to people cheat them, you know, not be nice at all about it. Not take care of your problems. What would happen if you started a blank shirt, distributorship, and you told the truth and you were nice to people, if you didn't have it , you'd just say, I'm sorry, I'm out of stock. I don't have it. Here's what I do have will it work for you. And those two principles you learned in kindergarten, be nice. Tell the truth. And SanMar every new employee gets that story. And they know that it's really mandatory that you tell the truth and you're nice. Over the years, I found that to tell the truth, you had to know the truth and many, many people lie to because they didn't know the truth. So we were the first in our industry to have a computer. We were the first in the industry to develop a computer system that kept track of what you had available to sell, not what you had in your warehouse. That's a very simple thing today. But back in the 70s, people used to get a printout in the morning of what their inventory was. And you gotta be old to remember those dates, but that printout would say that you've got 20 of something. And you've got four people on the phone. They're all taking orders and a customer calls in. They want 10 and somebody looks at the sheet and it says 20. And they go, no problem. I got 20. I have 10 . The next call comes in and I can do 10 again. And then the next call comes in and I can do 10 again, because everybody's looking at the same printout that was done overnight. And all of a sudden you've sold 30 and you only had 20. So I recognized very early on that we had to know the truth to tell the truth. And , um, I think that's the basis of SanMar today and really how we started.

Greg Muzzillo:

Yeah. So back in those early days, how did you drive awareness? Was your model still the same that you were selling to distributors and decorators as a wholesaler? Uh, or when did that business model start to show up.

Marty Lott:

So during the seventies and early eighties, the vast majority of the business was to screen printers and t-shirt shops . Anybody who embellished products, right? The ad specialty customer really didn't come into play until the later eighties and early nineties. And the way we built our business was the old fashioned way. We had a good customer in Seattle. Somebody came over from Yakima, which was 150 miles away. They saw my customer, they asked them, where do you get your goods? We got them from SanMar. So the person in Yakima and somebody from Spokane and went to Yakima, they heard that story. And then Boise, and it just kind of, it was word of mouth. It was, there was no printed material. There was no email blasts in those days. There was no really lists of people that were available. I think I went to my first trade show in 76 was the first impression show. And it was in Dallas, Texas, and that was the first time I went to a trade show and actually handed out catalogs. So word of mouth, good customers spread the word.

Greg Muzzillo:

I also read that you didn't take any pay for the first seven years. I think I read

Marty Lott:

That's correct. So for, so because my grandfather and his knowledge that he imparted upon me not having debt, I had a part-time job and my wife was a school teacher. And so for seven years, every penny I made, I reinvested back in the company. And then after that, I made the commitment that because I was in the inventory business, I would have to reinvest the vast majority of what I made every year back into the business. And until this day we still do that.

Greg Muzzillo:

All right . So 50 years in business and you've achieved a lot of remarkable success , by most standards, you're the largest , participant in our industry, which is more on the promotional products , decorated apparel side, or whatever the right words are. Um, tell me a few stories. If you would, about some of the high highs also, what were some of the lowest moments like, did you ever think you weren't gonna make it?

Marty Lott:

Um , so we'll take a high, high 99 was a high high and oh one was a real learning lesson. So in 99, you could not do anything wrong. There was so much money, especially on the West coast because of Silicon Valley, all the IPO parties that they were having. And they just want to spend money, there was a time in 99 when Cisco sent out an email to all of their managers that said, we're making too much money. We don't want wall street to see it this year spend money. And they bought promotional products. And we just thought we were the best thing since sliced bread. We were selling stuff like crazy. And then, Oh one came and it was like, wow, we weren't so good after all, you know, we were taking advantage of a market situation that we didn't create. And I really learned something there, but I want to talk about another low, because I think it was one of our better learning lessons somewhere. I think it was around Oh five Oh six Oh seven. We had a computer that went down on a Monday around noon. And in those days you weren't using the cloud and when your computer went down, you were done. Right. And so we didn't know why it went down. We just knew that we couldn't access it. And the programmers were working on it, trying to get us back. And we told our customers, our computer is down. If we haven't shipped it, we're not going to be able to ship it, but we don't know what we've shipped today. So, and we don't know what orders we took. So yes, we may have taken an order from you, but we don't know what it is. And we came up with a philosophy that make it right for the customer, whatever the customer wants, just make it right. Well, the computer didn't come back up until Wednesday afternoon. And on Tuesday we had a customer who called us and we never got the customer service person's name, but they talked to somebody in customer service. And they said, I placed an order with you on Monday, you charged my credit card. I'm now in a hotel. And I can't check out because you told me to buy it from someone else and I did, but I've maxed out on my credit card because of you and on this customer service person went to their manager and borrowed a SanMar credit card. And we took checked them out of the hotel. Oh, wow. We had no proof that we had taken their order. No proof of anything. It was just, you're going to do the right thing. And it just seemed like the right thing to do for this person. And so that kind of set a tone within the company. That being nice can go a long ways. And what is the definition of being nice? Well, part of it is to do the right thing and the right thing at that time was to check this person out, okay, let them leave the hotel, trust them. You can mark it down. We'll figure it out. When the computer comes back , you know, this, we can take care of them later. So that was one of the lower lows of the company. When the computer went down , we never lost a customer because of it, we told people the truth. We told them, we didn't know when it was going to come back up. I remember somebody calling me directly and saying, look, I need 20 cases of something, whatever it was goes, can't you just go in the warehouse and get it for me. And I had to explain to him that at that time, that warehouse was about 300,000 square feet. It was wrapped 30 feet high, whatever he wanted was in rack. And we didn't know which rack or where it was. And there was no way we could go and get him those cases, forget billing and , or taking the order . We just couldn't help them . And, that was, that was a tough time.

Greg Muzzillo:

Oh my goodness. For sure. Now is there an end to the story about the guy who you paid his hotel bill, like, did you ever find out, was it real? And, and, and , uh ,

Marty Lott:

Yeah, it was real the mistake that we made because you always make mistakes, was we never found out who he talked to and that would have been, and we never kept track of it. I mean, it's, we should have , because we should have done a photo of that person and put them up on the wall whoever our internal person was. But we just know that it happened and we didn't think it was, we didn't think it was a big deal. And now I'm telling you whatever it is, 15 years later, it was a big deal. It was the right thing to do.

Greg Muzzillo:

Yeah . Those stories really helped cement in people's minds. The words like just the words themselves can ring hollow or empty, but that epitomizes, what does it really mean to be nice? What do those words mean? If we're putting them on the wall or wherever we might be talking about them. So I love that story

Marty Lott:

And we tell that story to new people also.

Greg Muzzillo:

Yeah. That's a great story. So mindset is everything. Marty, I think in business, I think believing you can achieve something. Well, what did you always believe? Even from those earliest days that you were going to build something big, something successful? Um , even though there might've been speed bumps in the road, were you always confident that something great was going to happen for SanMar?

Marty Lott:

Um, so great is hard to define. I think I'll take it in two parts. First. My goal was always to do better today than I did yesterday. Okay. And wanting to do better tomorrow than I'm doing today. So that was really the goal. If you look at what we sell, we do more now in a two week period than the entire industry did in 12 months when I started. So could I dream there would be this big, no way. I mean, the industry didn't exist so to speak . So I just knew that I could do better. And look, I've been very, very fortunate that the industry grew, the popularity grew, you know, you threw out some numbers, I'll give you another number. And that is that we basically sell a product, whether it's a shirt or a bag or a jacket for everybody in America every year, that's an amazing stat. That's a lot of product. And we got into building our own product in the mid nineties because felt we could do it better than our suppliers were doing it at that time. And that's exactly what we did.

Greg Muzzillo:

There's no doubt that was a genius strategy because all of those brands are, are within proforma , uh, with our customer base, very sought after , congratulations on all of those brands in that strategy, because it was a genius strategy. So somewhere along the way , things have grown and your two boys are growing up and, and how is it that they came to get involved in the business? I know there's a lot of people listening now who get a little older in the industry or get a little older in their business and wonder themselves about bringing the next generation in.

Marty Lott:

So my elder son is running SanMar. I actually sent a letter out that I was semi-retired . I didn't really define semi-retired, but yes I am semi-retired now. And he's told a story because people always ask him, how long have you been on the business? And he would tell a story. And he's been in the business since birth. And a lot of his friends when they were young would talk about sports at the dinner table. And although I liked sports, I liked the business better . So we would talk about business. And when they were incredibly young , two, three, four or five years old, we were talking about business at the dinner table. So they'd been in it since birth and, they got into it because I was so excited about it. And I think they saw it as a wonderful opportunity. They could have gone into business doing something else, and that would have been fine, but, I think they saw my enthusiasm and I love working with my sons. I think it's just one of the best things in the world to do

Greg Muzzillo:

For sure. Yeah. We have a number of our children coming into the business and some of their , spouses or fiances. And , it's an exciting time because at some point, no matter how much money you make , it doesn't really matter , enjoying life and seeing the next generation do well and passing along the, those values and that education, and letting them try to grow the business to the next level, whatever that means. And however it will get done is exciting. No, I get it. And I enjoy, I don't know your other son. I enjoy my conversations with Jeremy. He seems very bright. Um, and very on top of things. And I'll tell you a story. So , one time I was supposed to find you andwe were at a show and I had an idea. I wanted to discuss this idea with you. And this is when I learned a lot about you. And I thought, you'd say, Hey, come to my room, let's have a private conversation, but you didn't , you said, come to my booth. And I thought this guy works in his booth. Sure enough. I went down there, Marty, and I know you probably don't even remember, but you were busy working away with all the different people walking by. And you were as if it might've only been your second year in the company, just happily showing people, product, talking with people and working right alongside all of your other employees. And I thought, what a great example that , uh , there's no hierarchy. I didn't see any hierarchy or any pride. You just seem happy to be working side by side with your team and , treating them all as equals. And that was very impressive to me.

Marty Lott:

Oh , well, thank you. And I did thoroughly enjoy doing that.

Greg Muzzillo:

All right . Two more questions. And , uh , I really am appreciating our time first and foremost. Good for you, 50 years into hard work, sacrifice, not take a paycheck for seven years and a lot more , clearly it's onto the next chapter, the next season in your life. What are your big dreams now, this new chapter of your life being retired, whatever that means.

Marty Lott:

So , I don't think I would've said this maybe a year ago by staying healthy. Yes . I think is probably number one on the list, I want to see SanMar succeed on. I'd like to be around, to see my grandchildren involved in the business. We are a family business. And the reason you don't know, one of my sons did is that I sort of split our business in two parts. And my younger son runs our real estate business, which is quite substantial. And my older son runs SanMar. So keep them somewhat separate. But my wife and I are spending time with our grandchildren. We've probably seen them more during COVID because we haven't seen anybody else. So we had to limit who we could and couldn't see, and on. So we're actually seeing our grandchildren, which has been wonderful. So staying healthy, is number one on seeing the company continue to grow, seeing the family involved in it on, I would get no pleasure at all. In seeing the company gets sold and a bunch of money coming. That would not be positive to me at all. So , those are really, you know, I play golf. We go snow skiing, we ride bikes, we walk on beaches, I love doing all those things now. Hopefully I'll be doing for many, many more years.

Greg Muzzillo:

Yeah. Hopefully for all of us. Uh , you're a good guy and a good man. Uh, and final question is there are a lot of people listening, maybe in our industry, maybe in all kinds of different industries, different ages, different dreams, but nonetheless, some folks who have big dreams, some of them maybe have been interrupted. Their dreams have maybe been interrupted a little bit by all this COVID stuff. What advice would you give younger folks with big dreams today?

Marty Lott:

So I think it's probably the same advice I would've given 50 years ago. And that is frankly, my grandparents probably would have found the same advice on my grandparents and great grandparents sold luggage to people who were going to Alaska for the gold rush. Okay. They found a niche and they, I don't know if exploited is the right word, worked the niche. And in today's world, you know, SanMar has thousands of customers. They all have slightly different niches. Your niche is different than your competitors niches. And even though you may have a sales associate that has a similar niche to someone else, if they're being successful in their town, in their region, they've found a niche and they're working it. And here again, whether it's mufflers or, you know, who would have ever thought electric cars would be a niche, clearly a pretty good niche, so find a niche and work that niche don't expect it to explode overnight. I think too many people get discouraged. If it doesn't happen immediately, it does take hard work. It takes dedication, but I'll always go back to my two basics, tell the truth and be nice. And if you can do that, I think you can be successful.

Greg Muzzillo:

Yeah. Marty , inspirational again, congratulations to you on your 50th anniversary of SanMar congratulations to you on bringing your family into the business and wishing you and Sharon, a great time in Hawaii. Thank you for joining us from Hawaii. Looking forward to your living a long life and seeing you again soon at a tradeshow. Thank you, Martin.

Marty Lott:

Thank you, Greg, for having me.

All About Marty Lott
Swinging a Sledgehammer
Starting SanMar with One Dollar
The Yellow T-Shirt Story
No Pay for Seven Years
Computer Crash Catastrophe
Mindset Is Everything
The Next Generation
Words of Wisdom