Why a $10M DTC Company Needs More Than Sales — Transcript

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1. 0:00DTC fashion brand, commerce, Indonesia,
2. 0:03from Indonesia, doing $10 million a
3. 0:05year, EBITDA $3 million,
4. 0:07been doing this 9 years.
5. 0:11>> Thanks for making it out.
6. 0:12>> Thank you. How do I know when to expand
7. 0:14new product line?
8. 0:17>> What are you selling now?
9. 0:19What are you selling now?
10. 0:20>> T-shirts, shirts, pants, jeans, jacket,
11. 0:22but mostly menswear.
12. 0:24>> Is it What is it white label or brand?
13. 0:27>> Say it again.
14. 0:27>> Is it your brand or is it your brand?
15. 0:32>> I'm not manufacturer. I subcontract to
16. 0:34the other factory in Indonesia, and then
17. 0:36I only own the office and the warehouse.
18. 0:39>> Is it custom? Do you design it or you
19. 0:41just slap your label? You design it.
20. 0:44No, that's fine. I mean, like, hey, I'm
21. 0:46I'm I'm not I don't Do you competition's
22. 0:48competition? Um
23. 0:50As long as you're not hacking their
24. 0:51databases or anything, like, that's I
25. 0:53mean, that's the nature of the retail
26. 0:54business. I understand it. Um okay. So,
27. 1:00the question that you have is how do How
28. 1:02do you scale it or basically, how do you
29. 1:04add more?
30. 1:04>> to expand new product line. Let's say
31. 1:07women's, let's say sportswear, because
32. 1:10I'm doing casual only. Let's say formal.
33. 1:13>> Um I don't think at 10 million you need
34. 1:16to like like you could do so much more
35. 1:17even within that within that that
36. 1:20demographic. Like, if you're just mostly
37. 1:22menswear, like, there's tons of massive
38. 1:23menswear companies.
39. 1:25>> Can I add to that?
40. 1:26>> Yeah, add. Yeah.
41. 1:28>> I'm thinking about that also, because I
42. 1:30haven't achieved 200 or 300 million
43. 1:32dollar yet.
44. 1:34Isn't it Isn't it will make my brand to
45. 1:36menswear later in life, so I'm not
46. 1:38building enough foundation to capture
47. 1:41the woman's later
48. 1:44in 300 500 million dollar mark.
49. 1:48>> 500 million a month that would be a lot.
50. 1:50Um
51. 1:52>> [sighs and gasps]
52. 1:53[snorts]
53. 1:56>> It's a tough call, man. I'll be honest
54. 1:58with you because like on one level, I
55. 2:00mean if you're like I want to build the
56. 2:01next Nike then yeah, you're going to
57. 2:02have to sell to everybody. But even Nike
58. 2:03doesn't sell suits.
59. 2:06Right? Just like like there's so much
60. 2:08like there's so many people who buy so
61. 2:10much clothing.
62. 2:13And I mean I think so right now I think
63. 2:16you're a little bit of of like a a brand
64. 2:18identity spot. Like you obviously know
65. 2:20how to convert, I'm guessing. Are you
66. 2:22running ads? Yeah, right. So you know
67. 2:23like you know you know that game and you
68. 2:25run really good margins I'm sure on the
69. 2:26on the products based on you can you
70. 2:28know how to run run ads [snorts] at
71. 2:30scale. And so
72. 2:32what I think right now is you have to
73. 2:33figure out who who you want to become
74. 2:36as a brand. So if you like menswear then
75. 2:39like you can be I think you can build a
76. 2:41massive menswear company.
77. 2:43Just being real I mean just being really
78. 2:44transparent with you. Like you can
79. 2:46build a massive menswear company.
80. 2:48Also like Lululemon doesn't do I guess
81. 2:50they have like pants that are nice but
82. 2:52like they're all sportswear. So like I
83. 2:54mean Lululemon's a terrible example now
84. 2:56cuz they've just gone to crap but like
85. 2:59like if you look at these I like like I
86. 3:01just as a framework for everybody like I
87. 3:02look at what's the biggest version of
88. 3:04the business that's currently here. Like
89. 3:06what did they do to get there? What does
90. 3:07their business model look like? And then
91. 3:09how many steps between where I'm at and
92. 3:11where they are do I need to take? And
93. 3:13like what lessons or what what skills am
94. 3:15I deficient in?
95. 3:17And so then it's like okay well then
96. 3:18those skill deficiencies become the
97. 3:20opportunity. Like fundamentally that's
98. 3:22it. And what their brand looks like and
99. 3:24how they monetize like are they
100. 3:26vertically integrated? Or like if I was
101. 3:27getting into the energy drink business
102. 3:29I'd be like okay well Red Bull has a lot
103. 3:31outsourced literally everything besides
104. 3:32marketing. So I guess that might be the
105. 3:34most important thing for a consumer
106. 3:36packaged good that's you know RTDs are
107. 3:37ready to drink and distribution. So it's
108. 3:39like they have massive brand plays,
109. 3:42massive distribution.
110. 3:44You know they have their recipe under
111. 3:45lock and key and everything else is
112. 3:48is so like basically I would look at the
113. 3:49brand like is Is a brand that you want
114. 3:50to emulate?
115. 3:52>> Uh, basically I'm I'm a what problem I
116. 3:54always uh
117. 3:55am I solving is just a billion dollar
118. 3:57exit building consulting firm and then
119. 4:00that is a lead magnet to PE build media
120. 4:02and then control the Indonesia.
121. 4:04>> Okay.
122. 4:05>> So my goal is just only a billion liquid
123. 4:07cash.
124. 4:08>> Okay. Well, let's take So right now we
125. 4:10sell clothes. So let's
126. 4:12a couple I get it. I appreciate that. So
127. 4:14I'm I want to I want to increase the
128. 4:15likelihood you get there. So I think
129. 4:18like
130. 4:19you can make this thing and very
131. 4:21valuable without doing all of the other
132. 4:22stuff that you were talking about. So I
133. 4:24think like you absolutely can do this
134. 4:25and then think, "Okay, why can't I get
135. 4:27this to a hundred million dollars a year
136. 4:30selling menswear?" Like why can't I?
137. 4:33And I think that way then it's like,
138. 4:34"Okay, is there a Is there a brand
139. 4:37person who can endorse this?" Like if
140. 4:38you look at the biggest retail brands,
141. 4:40they have big endorsers
142. 4:42who stand next to the product that
143. 4:43increases conversion, increases the
144. 4:45premium you can charge. And so instead
145. 4:46of knocking off Zara, you just become a
146. 4:48brand.
147. 4:50And I think honestly I think that's the
148. 4:51gap for you. Like you're obviously very
149. 4:52good at the arbitrage of media to to
150. 4:54clicks and whatnot, but like
151. 4:56I think you need to go from that to
152. 4:58building a brand and then that's what
153. 4:59will make it sellable. So this is what I
154. 5:01just like that's the TLDR of our
155. 5:02conversation is that's what makes your
156. 5:04thing valuable is you need to build a
157. 5:05brand.
158. 5:06>> If you're not getting as many leads as
159. 5:07you want and your business is demand
160. 5:09constrained, [music] meaning you could
161. 5:10service more customers than you
162. 5:12currently have, then this is for you. So
163. 5:14marketing is changing and I think ACQ
164. 5:16tends to be on the bleeding [music] edge
165. 5:17of this stuff. We certainly spend the
166. 5:18money
167. 5:19to do it, but we also build custom
168. 5:21software and we pay amazing vendors and
169. 5:23very expensive people to figure out the
170. 5:24system that we have right now and I want
171. 5:26to share it with you kind of open kimono
172. 5:27style. If you're not getting as many
173. 5:28leads as you want,
174. 5:29boy do I have the thing for you. Click
175. 5:31below, book call and uh
176. 5:33hopefully I'll see you in Vegas.