Listen to today's episode to learn about lowering your manufacturing costs and how to coordinate your online marketing efforts with your supply chain. Steve Weiss, CEO of MuteSix, is joined by Nathan Resnick, the CEO of Sourcify, a platform that makes manufacturing easy. In the past, Nathan has brought dozens of products to market, ran three ecommerce companies (sold one), and been a part of projects on Kickstarter raising over seven figures. He writes for media outlets like Entrepreneur, The Next Web, Business.com, and more. Nathan also used to live in China and speaks Mandarin.
Episode Transcript — Optimizing Your Supply Chain w/ Sourcify CEO Nathan Resnick
00:00 Announcer: You're listening to The Spend 10K a Day Podcast, brought to you by the performance marketing experts at MuteSix. This is your source for cutting edge insight into the world of online advertising, from the team with more Facebook case studies than any other agency on the planet. Here are your hosts, Steve Weiss and Stewart Anderson.
00:26 Speaker 1: Alright. Well, welcome to another episode of The Spend 10K a Day Podcast. Today, we have an awesome guest on this Christmas Eve Thursday. It's not actually Christmas Eve, but we're close. Today, we have Nathan Resnick, who runs Sourcify. Sourcify is one of the fastest-growing sourcing and manufacturing apps on Shopify. Nathan, thanks so much for coming on, man.
00:50 Nathan Resnick: What's up? It's my pleasure. Thanks so much for having me.
00:52 S1: Yeah, man. So, tell us a little more about your... You have an incredible story, man.
00:57 NR: Yeah. [chuckle]
01:00 S1: You built a number of Shopify stores from zero to amazing. You've had a couple of Shopify stores that were acquired, you speak Mandarin, you obviously know the space of manufacturing and dealing with China, and I think that's why I'm so excited to have you on our podcast, really, just talk a little intelligently about what goes into sourcing and that's one area of the business I think that I don't know that well at all, I know definitely know more of the more acquisition marketing side, and well, excited to pick your brain, so take the mic, man.
01:29 NR: Totally yeah, my pleasure. I'll start really into my background in manufacturing and why I got into that. It really stems from... A lot of people ask me, "How did this white Jewish guy from DC, from the East Coast get into manufacturing?" And really, it stems from in high school, I was a foreign exchange student there, living with a host family, attending a local Chinese high school, I completely immersed myself in another ecosystem as a 16-year-old high school student, and that's when I got so excited to see the power of these factories turn these products and to bring them to life, it was incredible.
02:03 NR: And so, in college, my first e-commerce store, what we did was actually invented the first leather watch strap without holes, it worked like a zip tie where you slide the strap through the buckle, it caught on notches in the strap, they work like those belt buckles, basically, and we grew it to a six figure brand on Shopify in the first year, selling watches and sunglasses online. That was when I was 20 years old and I got so excited just to be able to sell directly to consumers and produce directly from factories.
02:28 NR: But what I really realized was that, number one, a lot of stores have problems trying to manufacture their products, and number two, the supply chain side of the business is often overlooked. People a lot of times don't understand how they can cut those manufacturing costs, and that's what excited me. And so, what I ended up doing after selling that company and working on a few different Kickstarter campaigns and other e-commerce stores, was that I started Sourcify. And Sourcify has become the fastest growing sourcing platform in the world.
02:57 NR: We not only work with smaller e-commerce stores on Shopify, but we work with nine and even 10 figure brands as well, helping them optimize and streamline their supply chain, enabling them to work with, directly to factories across the world. We work in China, in Cambodia, India, Pakistan, Mexico, we have a very dynamic factory base, and it's been so exciting to bring all sorts of products, like everything from hats and backpacks to shoes, socks, watches, bunk beds, casters, you name it, we've probably handled it.
03:29 S1: It's really interesting. You work with stores from all walks of... All sizes and all walks of life, so give me an example of a... Let's say you're an established brand on Shopify, you're already doing seven figures a year plus in revenue. How does someone like that... And they're looking at other product, ancillary products that can enhance their offering. Let's say you're a t-shirt company and you wanna offer socks or you're... There's so many different scenarios, but how do companies from all different walks of life, from their life... What we call the life cycle from zero to companies already doing seven figures, how do they all... How does each one work with Sourcify?
04:05 NR: Totally. That's a great question. Really, it kind of depends on the dynamic that they're in. Number one, we first ask them, "How many manufacturers do you have access to? Are you single source?" Because a lot of people don't realize it, but you never wanna be single source. If you can only get your products from one factory, imagine what happens if that factory catches on fire, if there's a landslide, if there's a problem where the factory goes under. And so, that's really one of the first questions we ask a potential client is, "Are you single source?"
04:36 S1: That's really interesting. I didn't know that. I'm not a manufacturing guy, but rule of thumb, your story in e-commerce store, you have an established store is never be single source to one factory. I'm sure there's a lot of brilliant people out there who know that answer, but I didn't know that. And so, I think dig deeper into that, how many factories you need? How do you optimize output? How do you negotiate with factories? There's a lot of insightful stuff here.
05:01 NR: Totally. And so, after that first question, you're gonna ask yourself, "Do I have price visibility?" If you've been sourcing from one factory and only got one quote when you're going into production, you need to have multiple quotes going from different factories to really see if you're price competitive, because at the end of the day, a factory might not give you a competitive price. If you're not talking to other factories, you wouldn't even know. And so, the next step after you ask yourself, "How do I have price visibility?" then you can really dive into the dynamics to find out if the company you're working with is the actual factory, are they a trading company, or are they an agent. There's a lot of different dynamics where sometimes we have clients that think they're actually working with manufacturers and it turns out to be a feeder factory.
05:42 S1: So, who are all that? Let's talk about that, I know we're bouncing around a bit, but there's such great information here. Who are all the players in the ecosystem? There's the manufacturer, there's the agency, the trader, just kinda go into all the characters in the play per se, of all the people that you know you're dealing with.
06:00 NR: Yeah, so I would say... I'll first talk about who you wanna be dealing with, and that's the factory. And at Sourcify we enable you to go directly to factories through our platform. We only work with factories that we pre-vet. We meet the same criteria as Disney, Walmart, all those big retailers, when they check off their certificates of these factories. And the factories that... Basically, the company that's actually producing the products. You have trading companies, and trading companies will usually represent multiple factories, and most of the time, I'd say about 75% of the companies on Alibaba are actually trading companies. They represent other factories and that's why when you ask some of these companies listed on Alibaba about products, that's why they say yes so often, because they'll work with feeder factories.
06:46 NR: Feeder factories are basically factories that work through trading companies. And the trading companies basically have a larger dynamic sales staff that speak English that can deal with foreign clients, where some of these factories that these trading companies are working with might not even speak English. And so you might ask, "Well, what's the problem of working with a trading company?" Number one, ask yourself how do trading companies make money? They're taking a margin on the product, and so they basically get a margin between your order and the factory, and so you're never gonna get that direct to factory cost. Number two, if it's not a big trading company, they can disappear very fast. That's one of the main causes of manufacturing fraud is having trading companies disappear, or they direct you to send a wire transfer to their friend's bank account in Hong Kong, or they call it their boss's bank account, and you fall victim for a lot of wire transfer fraud.
07:43 NR: Then number three are the agents. And there are some good agents out there that provide a lot of value, but the big dynamic there is with these agents is that they a lot of times are shadowing the factory relationship, where we have some users that come to us and they don't even know who the factory is that they've been producing with, because they have an agent that is basically working as their factory. And so some of them will even wire transfer money directly to their agent and the agent will pay the factory, and they might not even know their exact cost of goods sold. And that's really one of the main horror stories you hear out there. But I would say those are the three main players in that manufacturing landscape right now. And I would say it's always best to go directly to the factory if you have the resources to.
08:30 S1: Getting back to the main topic of all the types of ways companies could work with Sourcify, what is the value? If you're a company that's already seven figures, if you're a company that's already just starting off, how do these different companies leverage Sourcify? I think Sourcify is really interesting. It's kind of a unique product. Just out of curiosity.
08:54 NR: Totally, yeah. First and foremost, we try to cut their costs. That can either be cutting their unit cost, that can be optimizing their shipping logistics side of the business. But first and foremost we try to bring more visibility to their actual pricing. And we work with some companies that have been in business for 10, 15, 20 years, and a lot of times they are relatively happy with their vendors. They've hit most of their goals. They sometimes have products delayed, but that's just one of the dynamics of manufacturing. And so we'll enable them to have more understanding about the industry that they're actually in. And then also if these companies are looking to extend product lines, for example, let's say Original Grain watches, wooden and stainless steel watches, let's say they wanna start doing hats or wooden sunglasses, they can utilize Sourcify to easily extend their product line and have direct price visibility to a lot of pre-vetted factories. So that's really how some of these bigger seven, eight, nine figure stores are utilizing our services.
09:57 NR: And then also right now someone on your team is probably managing production, and that is most likely their full-time job if you're producing at that scale. And so some people even outsource their whole basically sourcing team to Sourcify, and we manage that whole process for them and walk them through and get them through a production run faster and more effectively than anyone else.
10:18 S1: Awesome. Is Sourcify a service-based business or is it more of a technology platform? Just run that through.
10:28 NR: Yeah, it's both, because we have our own software that we use to get through a production run. Basically, what that does is you can go on our website right now, submit a project, let's say you wanted to start your own line of hats or backpacks, submit the specs in. Once you get approved, we send those specs out to factories that we've pre-vetted. Those factories usually within two or three days submit back price quotes on our platform. You see those price quotes, you can link up with the factory, get samples made, get into production, and then we partner up with some freight forwarding companies to actually import your products into America to your warehouse or FBA or wherever you're fulfilling your products from.
11:07 S1: Interesting. Changing the topic a little bit, I'm sure pertaining to Facebook ads, you've seen that Facebook is really cutting the cord on dropshippers, people who don't have any product. They market these products that come from China. They say it's gonna take two, three, four weeks shipping, they don't have any real grip on the actual quality of these products. Alot of dropshippers are obviously trying to figure out, "How do I build a sustainable business?" The whole goal is, "How do I figure out which product's gonna work then build a sustainable supply chain model around these products?" So if you're talking to a dropshipper who's really just trying to figure out, "How do I build a sustainable model for a supply chain without breaking the rules on Facebook?" What would you tell them?
11:54 NR: I would say dropshipping is a great entry point into e-commerce, but all of the nine and even most of the eight, nine, 10 figure companies that I know, they aren't dropshipping their products. They're creating brands and holding inventory and making a bigger margin. The reason for that is most dropshipping companies are churn and burn. If you have a product that you're dropshipping through AliExpress or whatever your source may be, once that product becomes popular and other people find out about the synergies and margin that you've created with this product, you're gonna get flooded. I'll give you an example. I know the two kids that were one of the first guys who did the fidget spinners. Their first two, three months they were doing about $350,000 to $500,000 in sales a month. Once that caught onto the mainstream, their revenues dropped to like $30,000 to $50,000 a month, compared to the six going on seven figures they were doing just two, three months prior.
12:50 NR: So really, you look at the dropshipping dynamic and it's a great entry point into e-commerce. I do think you can learn a lot by dropshipping products. But at the end of the day, especially if you're shipping through ePackets, it's not gonna be sustainable and I'll tell you, in the next five, 10 years, you won't even be able to ship ePackets through China and here's the reason why. A lot of people don't even understand the dynamic behind ePackets. But that's actually done through a partnership between the Chinese postal service and the United States Postal Service. What a lot of people don't know is that for every package that's shipped from China through the USPS to your door, USPS loses over a dollar per shipment. We're losing money on every shipment and imagine, go, take that ePacket shipment that you get from your AliExpress supplier, whatever it maybe. Try to send that same shipment using the USPS back to the factory. It's gonna cost you three times more. The whole partnership that they created was to fuel this global trade dynamic and at the end of the day it's not sustainable. Mark my word, in the next five or 10 years, ePackets, they're gonna need to find another solution. I'm not saying that the dropshipping business isn't sustainable. But what I'm saying is that shipping method in that partnership, is not gonna last the next five to 10 years.
14:12 S1: Obviously ePacket, I didn't know what ePacket was. I'm so focused on this one area of customer acquisition. I've built a whole team, 40-plus people, who are really good at specifically driving new customers into a funnel and we're less focused on the whole side of where you are, which is supply chain and cutting shipping costs, doing deal with factories. What is an ePacket and how is the... I guess beyond just the dropshippers, how is the government kind of banning this ePacket? How is this gonna have an affect on just the normal brands in e-commerce businesses?
14:46 NR: Totally. An ePacket basically is when you go to AliExpress, and the shipping time is, say, usually a week to three plus weeks. An ePacket is a very cost affordable and slow way of shipping an item from China or Hong Kong, to an American consumer, to any address in America. It's done through a partnership, I think it was in 2009, between the Chinese Postal Service and the United States Postal Service, where they created a synergy to boost international trade. What that's caused is that a lot of these Chinese suppliers are starting to go directly to American consumers and the brands, the American companies, are getting caught out. If they aren't the factories themselves, they obviously can't produce at as low a cost as a factory can. Number two, these factories are capitalizing a ton on this ePacket dynamic. Even speaking in terms of customer acquisition, you look at the dropshipping entrepreneurs and that whole dynamic. The reason why a lot of that has become so popular, is because you have a lot of coaches that have created some very unique programs. Some of them were actually good and some of them brought a lot of value. But you have a lot of coaches in the e-commerce world that are focused on dropshipping, because it's a very low entry point to get started.
16:06 S1: Yeah, clear to everyone. We work with very few dropshippers. That's an industry where I think it's a short-cut, coming from the affiliate marketing world initially. Like I knew what the barrier to entering a specific business was and I think that if you... The only way you could safeguard your business is by building a brand. Brands, the life of a brand always outlived the life of, say, a dropshipper, 'cause you're moving from thing to thing and you're not building equity value. But with that said, the future of... Let's talk a little more about the future of supply chain and how it correlates to digital marketing. Obviously you work, for all of our team, we work in digital marketing. We sell a lot of products and we kind of lose out on specific SKUs. We know like these 10 SKUs are the top performing SKUs for our partner. We sell them out, now we have to wait two, three, four weeks to get those SKUs back from the factory. How do you... I guess this is kind of what I have been trying to figure out as I dig more into the wees and the merchandising and the actual supply chain size, that correlates to digital marketing. How do you build a data-driven system, to make accurate predictions on which specific supplies you will need for the future?
17:19 NR: Totally. It directly relates to your digital marketing campaigns. There's so much overlap between your supply chain and your forecasting and your digital marketing ad spend. Because if you're marketing your specific products and spending more on the specific products to sell them, you're obviously gonna hopefully sell more of those products. So from a supply chain and forecasting standpoint, if you're able to understand and forecast effectively, based on your estimated CPAs, then you can understand how much money you can put into inventory. Because I really see e-commerce as a balance between your cost of inventory and your cost per acquisition. That dynamic can really fuel profitability. If you can basically keep your CPA costs lower than the total unit costs, then you'll be in the green. That's really the dynamic right there. And I think in terms of forecasting, you have to look at historical sales data, you have to look at current market trends, and you also have to also look at the timing of the year.
18:20 NR: The biggest holiday in China is the Chinese New Year. This year it's in early February. Factories are gonna closed for about a week and a half, two weeks. And so if you're trying to get an order out for Q2, you'd better plan ahead and you should probably order that order this week or next week. That's really the dynamic behind manufacturing overseas is you have to be familiar with other holidays and you have to be familiar with certain production timelines and lead times as well.
18:46 S1: That's really interesting, the Chinese New Year. [chuckle] I think we've all been there before, running ads and then it's likd, "Oh, my God, we're running out of product, when is the Chinese New Year gonna end, we need more product." Something to really plan for, just as you're planning for Q4, Black Friday. Start planning and thinking around Q2, which is coming up rapidly, that's the Chinese New Year, so having enough supply to really sustain that. Interesting. Now, moving on to another topic. Obviously, connecting Facebook to your supply chain, very important using Facebook ads and Google Analytics to really drive home an accurate prediction of what products you'll need for the next, three, four, five, six months. Tell me more about how Amazon integrates into your supply chain. Obviously, there's FBA, which is growing at a rapid rate. We're starting to see more of our mini Shopify partners start moving over. And lots of what we call the marketplaces, the Jets, the Targets, the Amazons, how do you build a supply chain across all six or seven of those marketplaces?
19:51 NR: Totally, yeah. That's diving into omni-channel logistics and just an omni-channel selling environment. We have clients and users that sell across eBay, Amazon, Top Hat or Shopify. They're across so many different marketplaces and you really have to use the right software to manage that. There's a lot out there, there's Skubana, ChannelAdvisor, a few others. They're all great, but at the end of the day, I think it really comes down to like you're saying, your CPA and understanding where you're spending your ads, because there's even Amazon sellers right now that are funneling ads, or funneling clients through Facebook. And so, they're even kind of skipping past that maybe Shopify route that a lot of more Facebook advertising driven companies utilize, and taking that FBA route through Amazon. And really that dynamic is, a lot of times it's easier to manage a sale through Amazon than it is on Shopify. It depends on your back end system, it depends what 3PL, third party logistics company you're working with. But FBA, hands down, probably one of the most streamlined systems to sell a product and get a product to your customers' hands. It just makes things a lot more effective and easier to manage.
21:03 NR: And so, that's kind of the dynamic one. And looking into your ad spend, really understanding where am I driving traffic to, where is the main conversion coming from, and then honing in on those acquisition strategies to plan out your supply chain, because if you have product in your warehouse that's running through your Shopify store, and your Amazon storefront is ranking higher for certain keywords and that starts selling better, you hopefully can transfer that inventory over to FBA, or at least ship to those customers in a timely manner, even if your product isn't on Amazon. So it's something to always be aware of, especially as you're increasing your ad spend.
21:44 S1: It's really interesting. It's really good piece of advice. Let me just pull that out there for a second. Comparing your Facebook analytics and your Facebook acquisition, your Google acquisition to rankings, to search rankings in your Amazon store. If you see that you're growing traction on both reviews and searches in your Amazon store, maybe it makes more sense to transfer some product from your warehouse, or from your 3PL into your FBA, into your Fulfilled By Amazon. Because obviously, the worst thing in the world is to be with FBA and not have enough product to... I'm sure Amazon does not like that. [chuckle] That's something to always be aware of when you're comparing, obviously there's tools, ChannelAdvisor, Skubana, and probably the one that we work with most, which is Oracle and NetSuite which are... NetSuite does an amazing job with that as well, but I think that's where it has to integrate with your marketing. You really have to be on top of all the different trends to really understand which specific sales channel you should be allocating product and resources to.
22:51 NR: Definitely, yeah, 100%. That's all intertwined with your ad strategy. That's one of the biggest dynamics right there. You have to really understand where your traffic is coming, or where your acquisitions are coming from most. It's something you just have to be aware of. There's a lot of software, like NetSuite, like you're saying, that can integrate across channels that are great to understand these different dynamics, because at the end of the day, if you're selling more on Shopify than you are on Amazon, a lot of times, we even see these e-commerce companies spreading themselves too thin and that's just... Understand where your customers are coming from and try to put most of your eggs in that one basket, and I think a lot of people can apply that 80-20 principle to their business to figure out what's actually driving home their sales.
23:42 S1: Yeah, it's just really good advice. Nathan, I wish I could tell you that I'm an expert with Amazon. I'm a novice with Amazon. There's people on my team who are a lot smarter than me at Amazon. I feel like I'm a one-trick pony in a lot of ways, a very masculine one-trick pony, but I know Facebook ads probably better than 99.9% of the population. I know Amazon a lot less. I'm always focused on figuring out how does Facebook... What is the impact that Facebook drives across multi channels, across Amazon, across search? That's what we're always focused on.
24:17 NR: Exactly. And even with Facebook, think about the audiences that you guys are targeting. If those audiences are centered around certain parts of America that's gonna tie into your supply chain logistics. If you're targeting people in California but your fulfillment house is on the East Coast, that's not gonna make sense, because you're gonna be spending more on shipping. And so that's something that even from an ad spend standpoint affects your bottom line. A lot of people don't even realize when they're getting into these funnels how their audiences on Facebook can intertwine with their supply chain.
24:46 S1: That's a really amazing point. Another great point that I would personally, as a marketer, would not be focused on. It's the reason why you wanna have your marketing people talking to your supply chain people. Nathan, as you just said, when you look at the demographics, the location demographics of your Facebook customers that you're driving into your funnel, there's different shipping costs to reach different parts of the United States. Maybe you set up, maybe one strategy could be, if you have creative that's winning and you have an audience segments that are winning, maybe you start pulling out specific locations out of that audience trying to figure out, "Hey, can I move product to specific areas of the country where my margin would be higher?"
25:32 NR: Exactly. Exactly.
25:34 S1: What kind of difference in prices do you see from different areas of the country? Just out of curiosity.
25:42 NR: Yeah, it depends on how you're shipping. I'd say probably the cheapest rate is gonna be the United States Postal Service first class mail. I remember when I was running my watch business, it cost us, I think it was $2.19 to ship a product from San Diego to the East Coast, which sounds crazy cheap, but it was with their most effective rate. And it's something you've got to look at from your warehouse perspective. Whenever you're growing your business up, you always have to manage your budget between inventory and ad spend and your operations costs as well. But I think your main categories are gonna be your ad spend and your inventory cost. You've got to be able to manage that cost per acquisition as you're growing your business, because otherwise, you aren't gonna have the money to spend on inventory. You're gonna run out of inventory. We've had clients that have ran out of inventory 'cause they didn't think that their Facebook ads would convert so well. That's a whole tricky situation where you're trying to get product in the door and out the door as fast as you can to your customers and your Facebook ad spend increases and you're converting customers at a great rate, but you don't have the product to ship and then you're hurting your brand in the long run, because you don't want your clients, you don't want your customers waiting for those products to come in.
26:52 S1: Yes, never wanna do that. Rule number one of Facebook ads, if you're marketing a product, have that product available to send them. [laughter] Let's go back, send product to person that you have. Change of topics a bit, this is... I guess 2018 is gonna be the year, in my opinion, one of the evolutions of Facebook ads is, Facebook's making a big pitch all around the world to do user acquisition in third world countries, from India to Pakistan. They really wanna connect the worldwide through social. And I think that that has been happening over the last three or four years and I think when you have all these new users on social, all these new users on the internet, eventually e-commerce will trickle down to these users.
27:38 S1: So obviously, with that said, 2018 is going to be the year of international. You're gonna have... The US e-commerce brands are gonna start seeing that there's pockets of middle class in say, Brazil, Portugal, Singapore, Taiwan. There's large pockets of buyers, of people who wanna have access to more products. I think that... What are some strategies as you start thinking about obviously going first to the English-speaking countries, Australia, England? But what are some of the strategies as brands start thinking about going international, building a supply chain that will scale internationally? What should a brand be thinking about when they start thinking about that topic?
28:16 NR: Totally. That's a great question. And you look at the markets that are really growing so dramatically in these international countries, across the world, like Australia and across South America. I know, even just touching on Amazon briefly, they've just opened doors in Australia, which is incredible to have people to be able to sell around the world through Amazon and through that Amazon supply chain. From a Facebook standpoint, I think it really depends on the audience and how you can connect with those other English-speaking countries. If you're selling in the United Kingdom you might be working with different influencers. We did those suits with Connor McGregor, where we partnered up with the agency and launched, they're called fuckyousuits.com and it went viral. It was on Hypebeast, The Slay, BroBible, it was all over the web. And we basically just produced those Conor McGregor FU suits that he wore on that fight or on that press conference with Floyd Mayweather.
29:11 NR: And the story went viral. That's kinda the whole dynamic of figuring out where your best customer segments are around the world. And one of the things that are so exciting, in my mind, about Facebook is that you are able to access customers anywhere in the world and have marketing visibility to these customers in countries that you otherwise wouldn't have visibility into. And so you look at targeting in Australia, you look at targeting across South America, and really across the world, the reach is truly global and to have a supply chain that supports that you're gonna start to have to have warehouses or third party logistics companies in those countries, because I'm gonna tell you right off the bat, it's not gonna make sense for you to scale your ad spend and scale up your marketing in Australia or Europe without actually having a supply chain or a 3PL setup to handle that, because your shipping cost are just gonna eat into your margin. It's not gonna scale as you want.
30:09 S1: How do you go about finding those 3PLs and those fulfillment partnerships in, say, Brazil? How do you as a brand go about finding those people that add to your team? 'Cause they are team members who are gonna help you be successful. How do you go about finding those partnerships?
30:26 NR: It's one of the hardest things to do. I think both on the front and back end in terms of finding partners, we have partners we recommend at Sourcify, there's partners that are recommended through Shopify. I would say really it depends on the scale and scope that you think you have in these countries. If you think you can scale up to 1000 shipments a day, then that's obviously gonna be a lot different than dealing with your client that's producing or selling or shipping about 100 units a month, that's just a whole different dynamic. I would say, as you move into these countries, plan for growth, obviously, but you gotta forecast. Run some tests and even if you start marketing and selling products through Facebook in these countries, or parts of the world like Europe or Australia, you don't necessarily have to invest in the market heavily right off the bat. Run some tests, see the dynamic, if it converts well, then go ahead and set up your supply chain. Hey, a trip to Australia wouldn't be bad, right?
31:25 S1: Yeah, there's worst places to go in this world. [laughter] One last question, I think you've kinda done a very, very thoughtful job of really communicating intellectually are some of the challenges of connecting your supply chain to your paid marketing. Canton Fair, I get this question a lot: Is the Canton Fair worth going to? Is it worth taking that long trip over the Pacific pond to meet a whole bunch of factories and get wined and dined? Obviously, you run a platform, you connect factories, but is there a value in meeting this guys face to face?
32:02 NR: I think it depends on your business. If you're looking for new products, it could be cool to see. If you've never been to China it's definitely a good and crazy time of the year to go. The Canton Fair is hands-down the biggest manufacturing trade show in the world. For those of you that don't know, it's got over 120,000 people that go to it. It's basically the CES of manufacturing. Not only is there manufacturers in China, there's manufacturers from Thailand, Vietnam, really around the world, and it is mind-blowing just to see the size of the trade show, but really what a lot of people don't realize going into it, is that every booth there isn't necessarily a manufacturer or a factory. There are those trading companies, those agents that we talked about before, because if you looked at it from a business standpoint of the trade show, they're trying to sell their booths. And a lot of times it's the highest willing person to pay gets the booth. It's a dynamic where, if these trading companies, some of them have massive booths, but they aren't necessarily the factory themselves.
33:04 NR: I would say it's always valuable to meet someone face to face, especially if you've been in business and serious about selling products that are anywhere in the world, it's worthwhile to go to, but is it gonna make or break your business right off the bat? I wouldn't say so. You can work with quality teams. We have our own quality team at Sourcify that can help manage that whole process. Is it a cool trip to go on? Is it a very insightful experience? Definitely. I'd say, if you have time and the resources to go, definitely go over there.
33:37 S1: Cool. Any good restaurant recommendations. No, just joking. [laughter]
33:43 NR: I'll tell you what food not to eat.
33:45 S1: Yeah, it's a whole different conversation. Is there anything else before we wrap things up? Anything that you would love to just share with our audience? Obviously our audience is very hungry to really learn more about the supply chain and integrating that supply chain with their paid marketing and their current marketing campaigns. Is there any other thoughts or ideas that you'd like share on this before we wrap things up?
34:05 NR: Yeah, totally. My one last thought that I have is that, I think you get... I know I get a lot of questions about, how do I actually test a product without investing a lot in the product, and that's something you can do so well through Facebook ads. If you wanna think about extending to a different product line, here's what I would do. Get a sample made from the factory, as fast as you can, you go through Sourcify or whatever resource you want. Get that sample made, bring it back to your marketing team here in America, have those assets created, the marketing assets photos, videos, all that with that sample and run some ads for it. See is this actually gonna sell? Don't bump it up to $1000 ad spent per day yet, but put some ad spend behind it and say, "Hey, is this product gonna actually scale out and grow with our brand?" And use that test to really see if you should invest in the inventory, because you can test a product without investing in the inventory and that's how you do it. I would say, you can test products with a few hundred dollars and see if they're scalable or not. Just take that route and go for it.
35:07 S1: That's awesome. Take action, there's really no excuses, I think that's the bigger thing, it's there's no excuses. If you're interested in e-commerce and you have the wherewithal to really... And you have the time on your hands to really figure out which product is gonna resonate with which audience on Facebook, just go in there and start creating ads, start creating ad sets, start getting a small sample from a factory. I think the big picture is, is Facebook has made the barrier to entry to get into a profitable entrepreneurial business very low and I think it's never been this big a topic in general but there's never been this time in the history of human beings where the barrier of entry to becoming an entrepreneur is this low.
35:46 NR: Exactly.
35:47 S1: Cool. Well, thanks, Nathan. I really appreciate you taking the time out of your day. I've learned a lot on this podcast. I love, this is one of the main reasons why I have these podcasts, so I can learn from smart people and I appreciate your time, I know you're a busy guy, let's stay in touch and have an awesome holiday season, man.
36:07 NR: 100%, happy holidays and thanks for having me.
36:08 S1: Yup, thanks.