Written By: Christopher Tredeau
Bombas started back in 2013 by two entrepreneurs, David Health and Randy Goldberg. They formed the idea upon learning socks were the most requested item at homeless shelters. Spurned on by the success of other companies with similar altruistic objectives, they created Bombas with the mission of donating a pair of socks for every pair sold. The entrepreneur team spent two years on research and development before launching their new and improved sock to market.
The next step of their journey was crowdfunding with the goal of raising $15,000 in 30 days to fund the first round of production. To the founders’ pleasant surprise, they raised $25,000 in just one day and culminated their campaign with a total of $140,000. Early signs were positive as the crowdfunding was a rousing success but soon, they would come across new challenges that required more experience and guidance which led to a 2014 appearance on Shark Tank.
Going into the show, the founders asked for $200,000 for 5%, valuing the company at $4 million which was in line with a previous valuation given by an earlier round of investors. None of the Sharks were impressed; with less than half a million in sales, it was hard to envision the company being currently worth eight times that. Mark Cuban even pointed out that other similar products with a “buy one, donate one” model including Warby Parker and Toms Shoes were higher-priced items compared to socks and carried a better margin, helping offset the cost of the donation. (At the time of the episode, Bombas was making socks for around $4 and selling for around $9.) Ultimately, after some negotiation on valuation, Bombas secured a deal with Daymond John of $200,000 for 17.5%, a valuation of close to $1.15 million.
Since their appearance on Shark Tank, Bombas has done over $225 million in revenue and has expanded their product lines into all forms of comfort apparel including underwear, t-shirts and slippers. The most endearing part of their success is company’s unwavering commitment to the central mission of giving back. To date, Bombas has donated over 30 million pairs of socks to those in need and maintains relationships with over 3,500 Giving Partners in all fifty states across the country.
In total, Bombas has processed over 10 million orders and based on their announced revenue, we can estimate their orders come out to just under $22 per order. Since their socks used to sell at a lower price than currently (when on Shark Tank, a pair was sold for $9; currently pairs are sold for $12), we can anticipate that more recent orders will have a slightly higher average price. So, what exactly do these orders look like?
Bombas offers sock bundles of 3, 4, 6, 8 and 12-pair packs with discounts for any bundle of 4 or above, and this appear as a very common option for buyers. All told, six of the top eight purchase options for men and five of the top eight for women consisted of sock bundles. These bundles retail for $50 and above, based on quantity, which allows Bombas to offer an additional incentive for buying in bulk: free shipping on orders over $50.
From a demographics standpoint, we do see some slight design preferences among men and women as well. For men, calf-height socks were the two most popular styles followed by ankle height, and we see the opposite for women with the top six styles being ankle-height followed by calf-height. We also see the appearance of the individual sock purchase on both best-seller lists. This indicates to me the likelihood of someone purchasing one pair for themselves or someone else, seeing how much they like them, and then coming back to purchase a bundle of the known product they like. *It would be interesting for me to see the repeat customer orders and analyze how accurate this is.
Bombas’ website traffic can be broken down into two main sources – direct and search – making up over 80% of their total traffic. We can also see there is about 25% more traffic on the men’s page than women’s page (25,000 vs. 19,000) and almost 95% of the total traffic coming from the USA. Bombas did recently announce expansion into the UK market, so we’ll expect to see that number change slightly in the near future as the company hopes to become more popular across the pond.
Annual traffic numbers show the company getting consistent organic traffic around 238,000 each month with large spikes in Q4 of each year. This is a common cycle for consumer products with the holidays approaching but does underscore some of the strategy behind recent advertising efforts from Bombas on social media.
When we dive into their Facebook ads specifically, we can see that they ran four advertisements in September and five in October but have already ran 20 so far in November. This ramp up is no doubt part of a strategy to get traffic to their website around the holidays, but also coincides with new brand partnerships including Disney and Sesame Street, both of which were announced on Facebook (418,000 followers) and Instagram (178,000 followers).
The results of these efforts won’t be fully realized until the new year, but we can already see some promising trends. During Q3 of 2021, Bombas averaged just under 5500 orders per day. But since the start of Q4, they’ve seen that number increase to almost 9500 orders per day, up over 173%.
Each of these efforts showed a continuation of Bombas core playbook for success: sustainable growth and strategic partnerships centered around an effort to give back to their communities.