Ep. #787 - Amazon Aggregators
Covered In This Episode
Are you doing business on Amazon? If so, you’ve likely heard about aggregators. Are they trustworthy? With Accel Club, you deal with Amazon Aggregators that offer holistic valuations with revenue-based turnouts.
Join Andrew Morgans and Nick Tuzenko to learn all about Amazon Aggregators in this Startup Hustle episode.
- Nick Tuzenko’s background (2:45)
- Adapting and dealing with changes (8:53)
- Evolving into an entrepreneur and as an aggregator (11:35)
- What do aggregators do (17:55)
- Accel Club’s aggregating systems and processes (23:45)
- Picking the right brands (34:39)
- Improving internal communications (27:14)
- Having solid hypotheses and integrating with reality (31:42)
- How to handle your brand and deal with aggregators (39:38)
- Wrapping up (46:12)
I usually say we’re not buying cash flow, its usually buying like 24 hours, seven days job when you buy a brand. This is what you buy because cash flow will not, will never stay there. If you don’t pay attention and doing. Yes, more than the founders do.Nick Tuzenko
I’m saying that it’s a lot of change there and more to come. So I do believe that if you will really would like to succeed, you need to have the discipline for yourself and for your team. To be like the friend with reality as far as you’re doing that. I’m like, you can be sure that somehow definitely like being friends with the reality also involves like, making decisions in hard decisions. If you see that you’re losing, you need to cut that off.Nick Tuzenko
You have to try more things outside the box because you’re small and you can’t get in the ring, you got to come up with outside-the-box ideas on how to win as a bootstrap agency.Andrew Morgans
Manage your HR needs the fast, easy, and effective way with Gusto. Gusto is your all-in-one place for processing payroll, benefits, onboarding, and other HR needs.
For your other business needs, please check out our Startup Hustle partners. They not only provide business solutions but also help the startup community grow by sharing great discounted offers to look into.
Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 0:00
Hey, what’s up Hustlers? This is Andrew Morgans, founder of Marknology, here for today’s episode of Startup Hustle, covering all things eCommerce, Amazon, and entrepreneurship, whatever we get into. Today we’re going to be talking about Amazon aggregators. I’m super excited about today’s guest, Nick Tuzenko. Calling in all the way from Amsterdam. I know it’s late over there. I think we’re around 930 or 10 pm. I’ve been super excited waiting for a chance to get this conversation, not just because it’s Amazon aggregators, and it’s something I’m very passionate about, which is the Amazon space. But also Nick himself is, is a legend. I was talking to some of his team and they absolutely love him. And feel like we have a team like that here at Marknology. So I’m just super excited to meet the guy and introduce him to you. But before we get into it, today’s episode of Startup Hustle is sponsored by Gusto. Gusto has modern solutions for modern HR problems, whether it’s talent management, payroll, or onboarding tools. Gusto is an HR platform that has it all for you to be smarter than your competitors. Try a three-month trial subscription now just sign up at gusto.com backslash Startup Hustle to get started. That’s gusto.com backslash Startup Hustle. Now that we got the beginning stuff out of the way, Nick, welcome to the show. It’s a pleasure to have you.
Nick Tuzenko 1:18
Yeah. Hi, Andrew. Hi. Oh, it’s really a pleasure to be here and share some thoughts and share some insights.
Andrew Morgans 1:25
Know, happy to have you, you know. Startup Hustle has a big international following. We’re in 130 countries. I think we’ve got, you know, we’re the number one podcast in Israel and a few other places like that. I think maybe some of your fans even already tuning in for this episode. We’ll see, but I’m excited to get into it before we do I love starting the show with just a little bit of your story, getting to know how someone that’s got a background in physics and math and his world won international competitions. I know this before started with soccer or football as you call it there in Europe. Get into Amazon in the Amazon space eCommerce space, buying selling brands operating them at a high level. Did you always know you were going to be you know, an entrepreneur running brands? I would say no. Like how did you let’s start in college? Like how did this evolution happen?
Nick Tuzenko 2:20
Yeah, it was like I always say like, pretty straightforward story. So yeah, I was like, really great in physics, mathematics, and really saw that I would be like, PG and sitting in the lab, like, like doing really great stuff in physics. I was there.
Andrew Morgans 2:37
Pause there, Nick, because you skipped use you went straight forward. We got 40 minutes. Let’s get into this. First you were an athlete. Right?
Nick Tuzenko 2:45
Yeah, like Yeah, football. Yeah. So I was like, it was like even a teenager it was like 10 years old when we started like, I have a twin brother. So it’s always about like this, like friendship and like, like going together through different like, stories in life. So we were playing like football. And yeah, and also like applying to the professional teams. But due to like some health concerns, we were rejected. And this how we just like switched to math and physics and really did great there. So
Andrew Morgans 3:19
So if our body if our body’s not good enough, we’re gonna go to our brain. I like someone that’s, you know, gets paid from my brain and not my physical prowess. You know, I said, I grew up in Africa, a lot of my listeners know that. I am not amazing at football. Because you know that if I was 14 or 15, that eight-year-olds were doing bicycle kicks and running around me like crazy in Africa. They’re amazing. I couldn’t keep up, so I was only going to play with stuff that I could win at, you know? Okay, so you’re in math, you and your brother and I’m very close to my sisters as well. We went through a lot of stuff in Africa and Moscow and things like that together, so we’re very tight unit I definitely understand what you and your brother had. You and him are going to school and math competitions tech. What happens from there?
Nick Tuzenko 4:09
Yeah, from that, we joined like BCG and this like the languages we would love to understand more about the business world and how it works, how the big organizations have like all this like big industry works. And as usual for people whose great academic background, the great getaway to the business is like management consulting, like BCG, McKinsey, Bain or investment bank making and we joined BCG after after the university and spent there several years like learn a lot about like different industries learn about like about strategy about about management, about like, which issues big corporations how and how have this like evolved during the time and really like the main lessons I have there. Like have common sense is important in like business and like it’s, you can be like experts for 20 years. But if you’d like some someday loose like common sense, it doesn’t matter what the expert you are, oh my gosh, just like like so. So I’m like, I was like 2022 years old, in a game to the guys we’re in, for example, or in Syrian Baggins for like, for 15 years. And after two weeks on the case, I contributed a lot value. And it just like was so eye opener, because when you just like have that’s like the ground, you can like digest information about the industry, you can like, really, really quickly get up in with all the information. But you also like use a common sense, you don’t have that like perspective, it just gives you like, like that kind of like insights that you can just manage can like, interoperate, you can configure it. And this was like a big, big like, Revelation, that’s yeah, I’m like, that’s how the business work works actually, like in science, it’s always sophisticated cuantos or photons, all that stuff. In business, I’m like, the general hypothesis, the basics should like very, very strict, like very straightforward. They should be very clear. And then all the certification coming. And this almost like was very, very hard and first, like half a year or year to you know, to switch that from from from not searching for something like real sophisticated, but trying to better understand like, what a nutshell Yeah, what’s the what’s the simplest way to understand like from A to B from b2c, how it works. And then all the sophistication Academy. Yeah. And this like really like great like story that like for the people whose academic grounds like measuring cassava is a great gateway to to the business world. But after several years, I just expand there. I just felt that I really liked the all this like, exciting world of startups, like the startup space. And definitely like I started at Technology University, doing like knowing, like the tech was like no have to go to all that stuff.
Andrew Morgans 7:07
was just not Nick. Can I interrupt just real quick was that in Ukraine? Or was that?
Nick Tuzenko 7:11
Yeah, like that? Yeah, I was actually from, like born in Ukraine started, like several years and then started in the university in Moscow in Russia.
Andrew Morgans 7:22
Okay, so you went to Moscow and your brother’s with you at the time?
Nick Tuzenko 7:25
Yeah, together. Yeah. We even joined BCG together. So we were on the intern internship like different companies, but then we just like gave us a HELOC, the offers from BCG and from Bain and he has from BCG and McKinsey and we have always joined BCG, just like on the start.
Andrew Morgans 7:43
That’s super cool. My sisters, like I brought it up before when my sister my, my older sister, that is our CEO and Marknology got her master’s in engineering in my little sister went towards equestrian science, we tried doing life apart, and it just didn’t work. So we’ve come back together, you know, the last four or five years to build Mark Knology together, and it’s been the best four or five of my life. You know, we all kind of just went our own paths, but like, came back together. So we didn’t have the plan from the beginning to do this together. But that’s super cool. And something else you touched on, I just wanted to make note of because I’d like to point those things out is it’s common sense. You know, I think too many people overcomplicate the problem, and I’m definitely someone that can be an over thinker. But, you know, I’ll talk to businesses that are 20 30 million, you know, talking about Amazon talking about, you know, transitioning or evolving their business and some of the things that come up is, you know, even if, after we’re working together, we like, I’m just pounding my head, like, this is just common sense. It’s not, you know, I’m not smarter than the person I’m talking to, it’s just my ability to, to think rationally about something simple, you know, so,
Nick Tuzenko 8:53
we call that inside, like, exhale club and like, I have this phrase, like, we need just to integrate with the reality, just like you just need to have that discipline, to not really deny that but to accept that, to understand that and to make decisions based on that. And definitely, we are all like great like believers we have like, some dreams we have like some kind of a vision. But I’m like we definitely need to understand what’s going on around like how they change, have this like, influence each other. And this is like very, very important, especially in the turbulence environment, especially Yeah, environment
Andrew Morgans 9:29
like the last couple of years, the last couple of years, like just from the pandemic to supply chain issues, you know, I think my background and just being used to change being used to moving around being used to seeing African environment and Moscow environment in the early 90s To like, you know, Hawaii two, I was born in Montreal, just different environments, right, where cultures are living differently. Times are different. You can be wealthy in Africa and poor as hell here in the US with the same amount of money. There’s just the ability to adapt to wherever you are and adjust to the climate, you know, and in business, it’s the same thing. You know, okay, now FBA is not an option. We have to do FBM did we plan for that? Like, okay, that might you might be used to, you know, winning a percentage here, but we’re losing it now. We have to adjust and find it somewhere else, or, you know, sure. PPC used to be what it was, and now it’s 40%. Higher, like, how do we adjust and, you know, it’s the reality of adjusting to what’s happening right now. Okay, we can pout, or we can adjust and pivot and, you know, just the reality, I think that’s great. I just wanted to hit that home. Because it’s not rocket science. I tell people that all the time, what we do is not rocket science. It’s just, you know, organization experience, and being able to problem solve as it comes up. Yeah. Okay. So, back to it. I’m sorry, you just keep saying good stuff. And I want to make sure we hit some of those points because it’s enough to talk about the whole show and some of that, so Okay, so you guys are you’re learning about business, you’re 20,22 years old, you know, contributing in a big way to business and kind of having a light bulb go off. That’s kind of like, okay, this is cool. I like this environment. I like the startup environment. It’s fun, it’s changing, and I can contribute. And you being a process, math competent, competitive level, you know, you’re able to process and reverse engineer you know, things like that in your head. You’re in the business world. How did we get to an aggregator? Let’s, let’s, let’s make that bridge.
Nick Tuzenko 11:35
There was a great, like, startup-like business for that I joined like as a managing director for Russian for believers. So this is like the biggest bus ticket for intercity trips, bus ticket marketplace in Eastern Europe. And yeah, we have a great investors, have great founder, have like, a great team. Yeah, I was just like one of the top management team, I was the managing director for collection galleries. And here I just like learn more about like, startup a world team, how it works. Yeah. And like, how it works from the scratch. Yeah. Like it’s the one word when the hell all that big corporations when they have that equity or assets already there. But the other one you’re grown like extend like for two years when it didn’t have like, enough capacity or enough knowledge about this or that, it just like the same but on the other limitations with other restrictions on the other speed. And it was really almost like a great experience, I learned a lot. And there was a successful exit, we sold the company to BlaBlaCar we just like the French unicorn, they’re doing like carpooling. So also like interesting trips. When you have like your car you’re traveling from, for example, Paris to Amsterdam, and you have like three free seats and you just offering that to other guys like on the on like to in between board and someone joins you and you’re sharing because to travel from Paris to Amsterdam. So this the their model and they also would like to add commercial transportation bosses. And this is where the seniors he came in, it was like radio for bus for for BlaBlaCar. And after like half a year of integration, I just like decided that I also would like to go further and started some something by my own some new new venture. And yeah, and then I just met like my partner, Max. And we started like, great, like, XL club. Great venture. Why Amazon WireMock we have only ever been like in Amazon space, but we just like see the opportunity. And it’s also very, very like simple. We do believe that eCommerce like getting from one side more mature from the other much more complicated. And to really, to really succeed there. I do believe that systematic players will have more and more chances to succeed there. And this hour like I would bet we do believe we do understand that we are not the best Amazon Seller right now in the world. We are not the best like m&a guys in the world right now. But we do understand that like doing that great to some extent by what we do believe that we are great like Bueller’s like teams have systems and processes. And here we just believe that we can make that bad and we made it that in terms of like that we as the system more system like player who can like invest in expertise in people can invest in like software in taking in tools and who can invest in the processes and be that much more like systematically. We can have a market share We can win like some contribution margins. Because like it always were there, like how telecoms like will learn
Nick Tuzenko 15:10
how to evolve, or have like retail, like conventional retail, you will have big company will. They also like, as far as the industry is getting more and more mature, they’re always consolidation or small always, like more space for systematic players to do that, I’m doing believe that each educator will succeed, I do believe that 80% of educators will fail will be like bankrupt, I do understand. Also, not there is no salary, or a service brothers or whatever, in the space was saying that aggregators are everywhere, they will eat all the market, I also don’t believe in that. Notice, we are much that we have our glasses, like the much longer planning horizon, and like much bigger deeper pockets. And like like this, like way of thinking in terms of like building teams and building processes, building tools, but um, the great challenge for us to make sure that we are paying that much attention as the small seller paying to any details they are paying in their product and their marketing. Yeah, and like, we have like right now like around like one solid and 100 products. And I can say you like about each product like that much details that can founders of these brands say to me, yeah, this is like the biggest difference. And this way, I do believe that as the market evolves, definitely the market share of aggregators will be will increase. But definitely the small sellers, like the two intrapreneurs. Like they they will be there always because they just like see this opportunity can act on that. Definitely can do that. Less, like systematic, all of that stuff. But we don’t send our classes and other minuses like our weaknesses. Yeah, yeah. This is the where we are all striving to focus and make sure that we also like somehow compensated for that, to make sure that we are hiring a great team with a great feeling of ownership. So they truly in the brand as their own as the entrepreneurs or do their, that their cross-functional communication inside the company also is geared it’s like, like really like like, very powerful, horizontal. And it really works. We’re not like some like big corporation with our so we are definitely unsent have to come and say that definitely do that. But as I said, like like, great entrepreneurs will always find their place like in like Commerce on Amazon, definitely the share of that group last but definitely, it was more balanced between like aggregators between like systematic players and like small entrepreneurs.
Andrew Morgans 17:55
Well, let’s break. Let’s break that down a little bit, I want to, I want to get in there and ask some questions. And, you know, I have yet to talk to a founder of an aggregator that’s been able to clearly articulate their value add to the space. So one, congratulations on that. Just being able to say, hey, what makes you different, what makes you going to be able to win, what gives you confidence to be able to sit down in a space like this, the aggregator model is not new to me. I’ve essentially been an aggregator in regards to grabbing brands, building them from scratch, taking brands, scaling them to exit, managing them ongoing cash flowing, I’m just not doing the acquiring on a big scale, right or reporting to investors. But me and you are very similar in that. You know, I’ve taken one, I had to wait on the market to mature because I was a little bit too early coming to the space. Just, you know, getting brands to pay for what we do. If I’m not buying the brand and doing it’s getting them to be big enough to pay for, you know what we do, but 10 years of experience on this in this space is a lifetime.
Andrew Morgans 19:01
In regards to sharing that or selling that to a brand. It’s one thing to work on your own brands, it’s another thing to give that knowledge to someone else, you know, and the one thing I will say if you were talking to me about okay, what’s your agency’s value? What’s the difference between you and the other 200 agencies that are worldwide because I think that’s about the number now, maybe a few more each year, but it’s the team. I’m a team builder, you know, not started with my sisters. Yes. And I prey on them all the time. But there’s 30 plus of us now and everyone has been handpicked to fill a role or be part of the team, you know, whether that’s the team having a say in who we bring on board. You know, I worked at a ton of companies where I had to work next to employees I didn’t get along with, and yet we’re supposed to be on the same team. That’s not how it works. If you have a bad apple on a sports team, they get rid of, you know, for the most part and so it’s been about the team it’s you know the process you’re talking about. We call that the Marknology effect. Here, it’s just like, you know, if you apply these, these principles and rules and process to this brand, it will be successful. We call that the Marknology effect of those things. And just like you said, you know, I’ve been, I wasn’t just going and buying brands, so it was more so convincing them to work with us, right? And so I’ve been rejected by business owners for the last 10 years, 1000 times over in regards to having these conversations and being able to tell them, you know, now I just have more tools at my disposal more, more, even competitors and colleagues that are preaching the gospel, so to speak, when it comes to Amazon, so it’s not just me. But you know, those are things that very much so are, you know, that conversation that the brand has, say 500 skews the manufacturer, and they’re saying, well, what’s you know, what can we do to grow our sales level, but it’s treating every single ace and every product, like, it’s the only one you’re selling? Right? You know, because what they don’t know, that I know, is I’ve taken a brand from a couple 100,000 a year to 17 million across 11 International marketplaces, and there’s three skews. It’s not a massive SKU count. It’s not, you know, a huge product list. It’s three skews that you care about, like they’re the only ones who are selling and, you know, optimizing them to the absolute fullest. And that is the science, you know, and you talk about it not being like, like math or science, but to me, it’s a perfect mix of art and science, you know, where the two, the two come together, and there’s always going to be creators, new inventions, new problems being solved. New brand builders, you know, and for the most part aggregators are coming into this space, really focusing on brands made for Amazon, or brands made for E-commerce, you know, in a lot of ways I focus on big manufacturers, or big brands that are creating their own brands, or going direct to consumers for the first time, or these manufacturers that are 100 years old, or they’re not going anywhere, right. And that’s what people need to understand is that there’s just a sophistication coming to the space that hasn’t been there before. I personally am excited about it. Because, you know, even thinking Amazon seller, like there’s this community that’s like, Well, those are the big players like I I’m just saying no manufacturers that I’m working with are scared of aggregators are nervous about aggregators of spaces where we know where it’s more so, grabbing some of these brands that need sophistication, they need cash flow, they need capital to grow that needle, you know, that need process that need a good team, maybe it’s one or two people, husband, wife, you know, even more than that, but, you know, I’ve talked to sellers doing $500 million, it’s crazy, you know, what some teams can pull off, but I think there’s just a different demographic to the ones nervous about aggregators, or, you know, have predictions about it. And I really just see you guys as, as another agency, with a lot of capital coming into the space like, you know, and I would agree with you, it’s not pointing out at which one is going to be successful or fail or this or that, it’s that I know that it’s hard. And you can’t just grab someone off the street and say, hey, I want you to manage this brand on Amazon because you’re not just doing marketing. You’re not just doing advertising, you’re doing supply chain, you’re doing laws, you’re doing bookkeeping, you’re doing all of these things, right? It’s a whole business in one.
Nick Tuzenko 23:19
Looks like I love the saying that someone in the industry is saying that we are buying cash flow. And I usually say we’re not buying cash flow, its usually buying like 24 hours, seven days job when you buy a brand. This is what you buy because cash flow will not, will never stay there. If you don’t pay attention and doing. Yes, more than the founders do.
Andrew Morgans 23:45
It’s like buying a house and having a bad property management company, right the house will start to deteriorate is going to lose value if you’re not in there, changing out the air filters, like you know, repairing the roof when it needs it, like keeping the house upkeep. And a lot of people think Amazon is just about coming in and setting it up. And then like moving on, and it’s not at all. Like that’s a phase, you know, even before we get to phase one, that’s, you know, like, that’s the beginning. And then it’s everything else after that. So let’s talk about let’s move from there. Before we do, I want to give one more shout-out to our sponsor, which has made this entire show possible. Gusto I personally am a user of Gusto as a company that has always been looking to get into the cloud that’s always looking to automate scale systemized process you know, it’s been a big help for me so adding that into you know, my local here in Kansas City CPA and being able to send payroll around the world from wherever I am, has been a long thing. So here we are you tired of long hours because of payroll, save more time with Gousto. With its automated process, you can file taxes and manage payroll in a matter of minutes. What are you waiting for registered gousto.com backslash Startup Hustle to get it Free three months subscription now, that’s google.com backslash Startup Hustle, Nick, um, you were talking about, like, you know, your value bringing system and process to it. You know, I’m a creator, like, my dad would jump into parts of Africa that had no one there and, you know, try to create schools and jump into the jungle. And, you know, I’m not that by any means. But grew up in kind of that environment of being a trailblazer going into something unknown and trying to create something out of nothing. So it’s been a journey for me in business, going from kind of that musician creative type like trailblazer to being very organized and systemized and processed and using a company much like McKenzie to come in and analyze our entire business systemize it process it, interview all our employees, create SOPs for everything, we’re in the middle of that now, like three months in. Let’s talk about systems and process a little bit. I think that’s something that can apply to any business. When you’re coming into a new business, if I can, like what are some of the things you know, immediately, you as a team are focused on to make sure that you guys have a handle on before anything else.
Nick Tuzenko 26:16
Yeah, it was like your cycle that like you would like to have that like, two different like, pull. Yeah, and the first, the first one you trying to get like, it was like metrics and all that like data all around all the processes, all their projects, whatever. This is the first one that like, like ocean of data, but from the other, you need to make sure that your people, they are that focusing on like, really, really like, like, solid hypothesis generation. So they don’t just like no boil the ocean or the data. Yeah, they just really like understand that they need to catch something that is really matters. It doesn’t matter whether it’s like awkward, whether it’s like, looks like really strange, they just need to make sure that they’re like mindset is all about like hypothesis. So as you as I said, like for example, like we are working on new packaging, or working new creatives, like I was just saying that’s like a brand marketing team or for like designers or for creative producers. Like, as the customer should understand like, what what what you’re selling like your hypothesis, like, right, right away, like, like, just like, look at that, and just saying that. And it doesn’t matter. Whether you
Andrew Morgans 27:34
even like photography, like storytelling, photography,
Nick Tuzenko 27:37
like packaging. Yeah, what forms, what colors? What like composition, like whether, for example, if sticking by with a bad supply category but it should be like dog or cat, which breed? I’m like, why should they should like human or whatever what you’re selling, you sound like the love, the love the ratio between like, you’re like pet owners and like, like pads, or what you’re selling, or, like you just send like the calm time when the pet owners can just like do his or her work and the pet just like playing there or like what you’re selling. And like I said, like, there’s a lot of like data unstructured and we’re just trying to make sure that our systems we’re using, for example, Tableau with all the API integrations, it’s we have an elastic dashboard, all of that stuff. But this like the ocean of data metrics, like conversions, from sales to reviews, um, like, and much more like what we are deriving by ourselves, not just like, on the metrics we’re seeing, like in Amazon, San Francisco, in Shopify, but even more like what we try and also to design there and follow. But you also need to make sure that your like, like a team, your different functions, they now have to navigate in this like ocean of data and processes. And they do on center, their main, like, the focus should around like generating solid hypothesis, whether it was this piece of data is that piece of data or whatever. And as far as just like it’s resonate with other teams, it gets that resources in house, and just like get that execution. Yeah. Because if there’s just like, for us, execution is coming from the energy. And as far as the other teams believe, what you’re like, like trying to communicate to them, they will find resources, they will love to do that. They just like feel that energy. And to do that, they just need to somehow believe in your hypothesis, and it should be solid for everyone in the room. And this one I’m saying that it’s not just about like you don’t have to put like Tableau by switching all the API’s and that’s it. No, it’s about like to have that in place to have all that like data and all that like unstructured and like whatever they flow, but from the other perspective to make sure that you’re like people they are having this mindset of like solid high. The solid pasta generation. Yes. And it really helps like in any matters, whether it’s like pricing, whether it’s like supply chain, whether it’s like, what that will look like in different areas all through the like value chain. So yeah, like in this what we actually do.
Andrew Morgans 30:16
Can I ask for a little clarification? You’re talking about hypothesis. And I understand like, there are so many companies that gather the data. I think what Marknology does well, is we make sense of the data. And I’ve been working for years to, meaning what do you do with the data, right, create a hypothesis. And for years, I’ve been working to get reporting on Amazon and a very high level where not just reporting and regurgitating the information, but how do I get the data that I think is important. And what I have to do differently than you is that I then have to take the data and storyteller to the brand that’s hiring us, right? So tell them what’s happening, tell them where I think we’re going, not just to my team that’s building the brand, but also to the partner or the brand of the manufacturer on the other side, how do I storyteller to them that return metrics and sessions and conversion rate? And how PPC is dictating what copy should be in the listings? And, you know, using software like PickFu? Or there’s others out there that let you know, okay, let’s not just take the creator of this brand and ask them if it’s clear to them because obviously it is they made it let’s go to 200 strangers and ask them if these photos make sense to them and they know what they’re buying and you know, things like that so it’s that when you say like in every area of supply chain creative BPC creating hypothesis would you be that’s like goal setting for the team like your account? Or
Nick Tuzenko 31:42
It’s about goals. Yeah, it’s more about like, right now, for example, in supply chain, whether it’s better to pay your suppliers in Airbnb in yuan, or is better to pay in dollars have to fix that? What’s the cost of capital for you, and what’s the cost of capital for your suppliers how to better structure the payments. So I’m just saying that you need to to have that like, buyer picture in terms like, like, a lot of factors are wrong. And you need just to make sure that you’re focused on like, like doing what’s how these things because you definitely will not have enough resources to do that. And maybe there’s no time and a resource in a lifetime to make these rights. And like, it’s just impossible, it’s more about like, whether you see some some kind of like, like, like hypothesis, like solid hypothesis. And so, for us, the quality of the team that we are billing is always measured by the quantity and quality of the solid hypothesis that we are generating. So whether it’s like in supply chain harvest HPLIP supply chain worker was for example, accounting, whether they optimizing that, whether we every new brand, we need more people, like per brand per dollar of revenue or less people, if we need more people, something goes wrong, and some some some some managers or heads, they don’t understand the job properly. They do generate like correctly, like, like hypotheses have to deal with that. Okay, this what I’m saying that you need to do enough to be in that bubble of unstructured data, from different sources, from yourself like, like from analytics or from Samsung for all? Well, just like I said, likely the half-half Forex for USD to be like changing, and what we see have like, like fixing the price in RMB? Or in the US, what’s going on with logistics, was it contained, in price was all that stuff? Have to Yeah, how to manage this, like cost capital? Like differences for manufacturers? And for you? I’m like, I don’t know, like, what’s the cost of capital for usually are, but usually it’s really high. Yeah, so foot for the even like midsize manufacturer in China, it’s really lowest like 5% 6% 7%. So, it definitely makes sense for you to try to postpone payments as they form the capital cost, they will charge you more like, in 90 days, yeah. But there’s more room based on their cost of capital, which is less than yours, which means it will be less for you. And this kind of like but it will change like Forex will change, or whatever, or your gross capital will change. So it’s just like, like so many different factors, so many different like database. And you just need to make sense, some sense of that. But as I said, like it’s so cheap, like, like, like this, that this attitude like something like solid hypothesis.
Andrew Morgans 34:39
I have one for you. I have one for you. Okay, so I think I’m on the same path one brilliant, and I couldn’t agree more. Like that’s definitely something that, as an agency, I’ve built my reputation around trust and success. And, you know, that has been picking the right brands to work with just like you know, so we can be successful, whether that’s going to mean they’re going to apply what we’re saying because at the end of the day, the brand still has to say, or they’re going to apply capital where we think they need to whether that’s advertising or repackaging or whatever. We’re always having to tell the story to get that. Yes. Right. And so being able to prepare that, one thing, I’m trying to tell the story of what data, okay, so we launched at three PL in 2020. That was for my own brands because a host of reasons, but one supply chain and getting people to care about your brand is hard. And so, you know, managing every part of the process. So for me, we’re not an aggregator with unlimited capital, not unlimited, but meaning like, you know, we’re Bootstrap. So we have to focus on what we can focus on at the time. And, you know, we’re seven years in, so it’s been a little bit by a little bit, but it’s been, you know, for me, it’s been okay, for these brands to be successful. I need to know what videographer to go to to get the best bang for our buck and get a great quality video. Or let’s say it’s an an importer-exporter, someone who deals with supply chain, or all the vendors who are the best translator in Europe. So if I’m not doing those things for them and thinking about all those optimizations, who can I plug them in with, that’s a partner that is thinking about those things in that space. So to be successful? And one thing, okay, so the thing I’m working about now, and I would love to round out the show, kind of with this one? And then one last question for you. I’m working on so we have three PL in the Midwest, and a lot of brands are having issues in LA, you know, hosts with the supply chain. So you know, proving, I guess the hypothesis that you know, one, not using Amazon carriers and using a carrier, you have a relationship with maybe that you’re spending more money on getting that truck to Amazon, but you’re saving in time and check in speed and quality because you have a dedicated partner that you can contact versus being Amazon’s when maybe to sit, you know, that trucking carrier might wait for two weeks. Right? So like, you know, most people just stop at, well, this one’s cheaper, I’m gonna go with this option. But really, if you’re able to show that hypothesis of okay, maybe you spend more time to train it to the Midwest versus a port in LA, but the ports in LA are backed up a month, or you know, what might be still sitting in the ocean? I don’t know. How do you prove that like, you know, coming into a different port paying for the cost of training to get it to the Midwest, then benefits in having a three PL that centralized in the middle of the country. So everything is within a shorter distance than being on a coast, let’s say in California, as well as speed and time to be checked in and, you know, kind of all these things and essentially showing that, you know, three PL being out of the Midwest has its advantages, versus just the cost savings of going LA to California, you know, distribution. So that’s kind of a story we’re telling. And I’m working on really showing some of that data and those metrics to say, hey, paying more here actually saves you more here, similar to waiting 90 days on an exchange rate for capital, right, in the same way, like the speed. And I think that another reason why I started the three PL was speed, you know, everything I’ve done has been successful in the E-commerce space, Amazon spaces, things are constantly changing, you have to adjust, you have to pivot you have to like you know, so it’s, that’s the fun of it. It’s also what I’ve been learning the last 10 years, it’s like I’m always in university, I’m never out. But it’s like, how can you have a three PL that’s like a dinosaur? You know? Or that’s like a titanic boat that can’t move? No, you need a three PL? your supply chain needs to be as fast as everything else, or else it’s the thing slowing you down. Right to be able to Nick Yeah, right. So I think you’re talking the same thing. It’s like it’s about speed. It’s about it’s not always just apples to apples, and you’re looking at price. So these things, it’s the next level of optimization. Would that would that be a hypothesis that you’re talking about kind of wanting to prove that hypothesis? Okay, cool. I just wanted to make sure I’m getting something out of this too. So anyone listening is getting the same thing as me. As we wrap up the show, just because I want to keep us to 45 minutes, I think I could pick your brain all day. As XL club, going into 2022, You know, we’re going to have a lot of shows eCommerce is going to continue to grow, we’re going to have all the problems we typically have. What are you guys excited about going into 2022 as a as an aggregator. And as you continue to build your team and grab more brands. And what’s something you would leave with just any founders? Maybe some generic advice about you know, how to handle your brand or to engage with maybe some aggregators?
Nick Tuzenko 39:38
Yeah, like, ask me the first question, by the way, like what we are really excited about. I mean, we do believe that eCommerce, like really changed a lot in the recent years. I mean, there are like 10 years, 20 years, but we do believe that in the coming years, there will be much more dramatic changes and much more changes. So we just like excited about the speed, about the era, things changing, like so fast, so quickly. And we just need to build like, skill sets, tools, and processes to make sure that we can like somehow deal with that. And this like really, like, as far as your answer with the ambitious like, goal, it is, like, it’s just so exciting that the real light, like it’s in front of you, and you’re trying to deal with that, but the huge challenge really, yeah, I’m like, it’s, you know, it’s like I always say I’m like, in this business, it’s always about multiplying. I’m like, it doesn’t matter how great your marketing team or whatever you are, if your supply chain has like stock, or you have like, out of stock right now, it doesn’t matter how like, whatever how many stocks you are, if you don’t believe, if you haven’t like manage your performance marketing, or branding properly, or pricing properly, it’s just like we stock so it’s more about like multiplying, and losing here 20% That when present here, 10% will like easily turn this business from like plus 20% margin to minus 30% margin. So it’s so so like, sensitive, and you need to be really great all across areas all across the value chain. So this is like a really like, like, challenging from one perspective or the other really exciting to be able, you know, to manage that complexity to be able to manage that, that speed of changes that you’re experiencing here. So it’s really exciting in terms of like, what the like the advice I can share you know, for me it’s always about like iterate user reality always Yeah, either for your channel like distribution channels either for logistics, um, like right now like as Amazon changed like, like storage fees and delivery fees. And those products the just the economics have changed. And maybe it’s just like the time to return to another logistics or whatever. There is a lot of like inflation right now everyone’s talking about that I hear globally changed prices for samplers, and I’m like it also like Amazon is maybe you also heard that Amazon is like a thing about changing the prime subsidy substitution cost. So far, for the customers, a lot of change, and you just need to somehow to stay with the reality whether you’re really making money or you’re just like losing money whether you should change your like like Amazon to Shopify or Shopify to Amazon. But if you change your category, or whether you should just like push like on gas like in this niche with this product right now, right away because it’s just like the next two years is a great time to really earn here, and then we could utilize that, and also I can just like like and also think wider. Yeah, I’m like this space get more mature and a lot of like stuff that is rare for the conventional business right now also here like exiting your business, selling your business. It was imposed impossible like five years ago with this great multiples that are right now here. So and all other stuff also here, more and more people are coming more and more expertise more and more great talents. I hear people believe in this like 10 years ago, you can share that and like see, and trading on Amazon was like, rather like something strange. It’s not like like, it’s not a full-time job. You can’t say anyone that’s full-time job. Yeah, today’s there is like, like an industry hundreds of like, solvus people like millions of people who are doing that. And they are making like, like, like, like a ton of money. And it’s like, real business. Yeah. So I’m saying that it’s a lot of change there and more to come. So I do believe that if you will really would like to succeed, you need to have the discipline for yourself and for your team. To be like the friend with reality as far as you’re doing that. I’m like, you can be sure that somehow definitely like being friends with the reality also involves like, making decisions in hard decisions. If you see that you’re losing, you need to cut that off. I’m like you’re seeing that don’t do that something will change. I’m like tomorrow, like it’s yeah, as you said like two years ago like PPC on Amazon was really really cheap. Right now.
Nick Tuzenko 44:38
It’s just like, it’s really like like cotton more and more like expansion and use like as far as the economy is getting more and more like from offline to online specialty at COVID Like CPC and like like all the all the costs like like for performance, they definitely will increase because you’re not only you’re in Facebook or whatever, like competing for the attention of the customer. But for example, Woolworths who are selling their old Tesla cars and automobiles, they definitely can pay for the customer to bring them a car more than you, you are selling, for example, pumps, or whatever. So just make sure that you really understand that strategically. And you’re saying that okay, this way you need to go, for example, to social commerce, you need to go to work with influencers you need to, or you need to somehow understand that the distribution channel is always changing always Yeah. And it will get less and less time to for them to change in the future. And we’ll see a lot of great stuff from Instagram from dicto from from other platforms. Maybe you see that Amazon is on the right now on the fiefs place in terms like the app that were downloaded for the recent year. So like there’s like misure other great GRAY Like, like new distribution models. So just just like, pay attention to what’s going on around. Don’t just like try to make sense of that.
Andrew Morgans 46:00
That’s amazing advice. Was it to integrate with reality?
Nick Tuzenko 46:05
Yeah, it’s iterate, right? It’s like iterate, iterate, to be the friend with, yeah.
Andrew Morgans 46:12
Okay. I love it. I just wanted to get that clear. I think if I had to change the title, I might do that. I think it’s, it’s amazing advice. And if you’re the smaller brand, you have to iterate, even more. You have to try more things outside the box because you’re small and you can’t get in the ring, you got to come up with outside-the-box ideas on how to win as a bootstrap agency. We, you know, we’ve built some amazing brands with nothing. And I think that’s prepared us, you know, that was just our way to get in here. And that’s really prepared us to wow, what can you do when you do have the tools? You know, whether that’s YouTube influencers or unboxing or Amazon influencers, or we’re on now on Twitch, and Tiktok and you know, there’s always opportunity. So if you’re, if you’re a small brand, you got to pivot more, you got to try more things than the big guys that are just going in hard. But you know, that’s why international expansion is the growth lever. Because you know, CPC isn’t as high there are different things. You know, you’ve got aggregators like yourself, or not like your competition coming into this space where they don’t understand operations and process, or they don’t understand how intentional SEO works on the platform, and they’re throwing CPC there, they’re throwing PPC to grow those sales to hit those numbers. You know, there are all kinds of things happening. And we grew, we grew tons of brands this year that suffered, and we could have had higher growth if the supply chain wasn’t an issue and we had continued to stock you’re only as good as your weakest link. So absolutely, absolutely. Awesome advice, Nick. Really appreciate you staying up late for the show. And thank you to our listeners for tuning in. Once again, today’s episode of Startup Hustle was sponsored by Gusto. Manage your HR needs with Gusto is the way to go make it easier to onboard talents handle payroll and support your people in any way. Gusto platform is powered by advanced technology. So talent management and payroll processing will never be the same again. Try Gusto for free, sign up at gusto.com backslash Startup Hustle, and enjoy a three-month free subscription. Nick, thank you for being on the show Startup Hustle listeners. Thanks for tuning in. I know this won’t be the last time we chat, Nick. So, a pleasure to meet you and get some rest.
Nick Tuzenko 48:13
Yeah, there. Thanks for this opportunity to speak and share some ideas.
Andrew Morgans 48:17
Yeah, and to all of our listeners, all of the links. You know, profile links, LinkedIn connection to Nick, and Accel Club will be in the show notes. If you guys want to want to do some more research and find out, you know what they’re all about, what his accelerator is all about. I know a lot of my listeners are very in tune with what’s going on. So hope you guys enjoyed the show. We’ll see you next time.