The Next Big Thing discusses topics that other e-commerce entrepreneurs will find useful, such as user acquisition, manufacturing, financing and tools the companies use to keep them moving forward.
In episode 10 of The Next Big Thing, we chat with Noah Dentzel, the Co-Founder and CEO of Nomad Goods. Nomad makes luxury Apple and Android accessories. We talk about how they build strong relationships with suppliers (FYI – the entire Nomad team went to a Chinese suppliers wedding), how they decide which tasks to outsource vs keep in house and effective UA channels.
Company: Nomad Goods
Product: ‘Tools for the modern nomad’
Founded: 2012
Sales channels: 70% DTC online, 30% Wholesale
Location: Santa Barbera, CA & Hong Kong
Team: 30
Yearly revenue: $20M
Margins: 50%
So for the people who don’t know the Nomad brand, or have never heard about you, how would you describe Nomad to them?
Nomad, we build tools for the modern nomad. And when you think about the modern nomad, well your traditional nomad maybe has a bow and arrow, and your modern nomad has an iPhone. So we keep you charged and protected for life on the go.
One of the things that have always stood out to me was how close your relationships were with your supplies, and it seemed like you dedicated a lot of time to going and visiting them, and spending time with them. Is that still something you do? And what’s your process to get new suppliers onboarded?
Yeah. Being close, sort of boots on the ground, has always been part of our strategy, and particularly in the developing of those relations — and in the earlier days ourselves, of coming into this space very green, and needing to learn a lot, and kind of go to school. And one of the best ways to go to school is to literally go there. We started manufacturing in California originally, and we went, pretty much camped down, in Anaheim, in Orange County. And it’s funny because they do a lot of — in the U.S., you do a lot of medical and military, so it was like medical supplies, military goggles, and the USB cable that these guys think is super important.
And they say of speed, cost, and quality, pick two of the three. If you’re not getting two of the three, then you need to go elsewhere. And we were not quite finding that we were getting two of the three. So we started sourcing a component from China, and we found that they were super fast, and the quality was there. And it just worked for us. It’s not to say that something — some things are certainly made better here, for whatever reason, and some stuff is better made there. Consumer electronics in Southeast Asia is just where the concentration of that is, that’s where the cluster is.
So we went to China in early 2013; the first time we had ever been there, and we — it’s kind of funny, we really embraced it. We got cowboy boots and we just showed up, and we thought it was kind of funny, as we’re not really cowboys. But in a way we were, for our kind of going west, or I guess going to the far east. And they were all casual, wearing t-shirts, and probably secretly laughing at us, but we were just having a good time. And the point is, we were breaking bread. We were getting down, getting our hands dirty, going with machines, working on…
Nomad Goods team touring China and attending weddings….
Didn’t you go to a supplier’s wedding?
We did. So we took nearly the whole Nomad team this past year to the wedding of the son of one of the factories that we worked really closely with. And that was a really cool experience for the broader Nomad team, because most of them haven’t been. We’ve grown a lot, so they haven’t had these kinds of formative experiences that we had of getting so deep. And we had a tour bus, and we got to be those obnoxious tourists that are in a tour bus. We were going around and stopping at a gas station, buying all the funny snacks. And if you ever sort of point your finger at those people when they’re coming around your town, we got to be those people.
And it was just so valuable for everyone, because we’re a hands on company, and it’s so cool for people to meet face to face. And for people to be in a meeting and talk face to face is just an incredible thing for building trust. And at the end of the day, business is about people and relations, and if you can build those, have an opportunity to do something like that, it’s going to pay dividends. And it’s a great experience for everybody.
I’ve loved China and I’ve learned a lot there. Brian, the cofounder of Nomad, has spent a lot of time over there, and really loved and gone deep there. And I think it’s something where it’s been a big part of our story, this sort of partnership with manufacturers. So it’s been great for everyone to have the opportunity to see some of that.
You always seem to leverage tools and outsource processes. How do you decide what to keep in house and what to outsource?
So being a hands on company, we get our hands dirty with everything. And one of the things you realize is there’s things that you are good at, for whatever reason, and things that you’re less at, or rather that other people are really good at. And where we are good, we tend to do more of [that]. And I’ll tell you a funny one, we’ve always been good at shipping. It’s just a funny thing. From when we had to fulfill our Kickstarter orders, to having a warehouse in Santa Barbara now filled with palettes of medical goods. And we’ve just been good at shipping.
I think we’re a hands on company, and so we’ve always done a lot of shipping. We’ve outsourced it to 3PLs, and then brought it back in house because we were like, we don’t like how they do it. They’re not fast enough, they’re not efficient enough. So there’s areas that we Excel and we’ll kind of be stronger at.
And then you look at design and product development. We’ve always been strong on that too, but we’ve also leaned a lot on outside design development to help us there, because that’s the type of thing where, getting that outside perspective, or getting those experts that maybe we’re not going to be hiring in house full time.
When you’re a small team, you can’t hire six different types of designer engineers and so forth. So working with a team or a firm, getting other creative ideas and stuff, has allowed us to take the best of what we have, blend it with the best of what they have. Lean on them where need be, [and they can] lean on us.
People ask us, well who developed that one? Who developed this one? And it’s like, each product has its own story. Maybe some of it is more internal. Maybe some of it involves external people. Maybe something involves a customer suggesting something. So that’s been somewhat of a hybrid.
And then you look at our accounting, we have a guy who’s super on top of accounting stuff internally now, but in our earlier days, it was never an area where we were strong. I’m not strong there. It’s the type of thing you have to do, and obviously it’s incredibly important to the business to be financially run well. And so we now work with a firm, who works with our in house director of finance. So we lean heavily on them. And the funny thing is, they even have a firm that they work with, one of the big global accounting firms, for when we get into weird, international, complex things.
So we’re leaning on them, they’re leaning on people. We’re not shy to get help from the outside. I used to do a lot of our legal stuff internally, and that is a freaking headache. And when and where we can, and when and where we can afford it, we are more than happy to lean on external lawyers, and we really should, because that’s the type of thing that you shouldn’t really be doing yourself. So it’s a blend, and it depends.
But one thing I’ll tell you is, by doing a little bit of these disciplines a lot, you learn a heck of a lot about them, and it allows you to get more out of partnerships. Whether it’s manufacturing, whether it’s legal, whether it’s finance, whether it’s design. When you don’t know anything about it and you hand it off — man, we worked with a marketing firm one time, and they just blew through a lot of money really fast.
And we had to come in and say, hold on. Let us tell you what works, because you get this feeling that they’re the pros. They’re wearing cool clothing, and they look kind of smart, and talk the talk, and use these terms that you don’t know. And you realize, well, I may not know the terms, but I know a thing or two about this. So then we told them our tricks and secrets and tips that were working. They implemented all that, and the numbers got way better. And then we were like, why are we paying them when we should be doing this?
So now, fast forward a couple years later, we took all of the marketing stuff in house, and we learned so much about it, we will also then lean on outside marketing firms to help us from time to time. If it’s an area where we want them to work on that, or we want them to run that, we want their ideas and efficiencies there.
So we’ll go both ways. We’ll switch it up, we’ll take something in house, and then get bored with it, take it out of house, do different things. And it keeps us nimble, it keeps us I think constantly having a bit of flux and change; keeps you on your game.
Now if there’s an area that you’re particularly good at, maybe you do hone that in a bit more, and in an area where you’re particularly weak, maybe you do rely more. But even to the extent you’re relying on a third party, how involved are you? For example, we don’t manufacture, we’ll contract manufacturers, but we can go over there and visit, and get hands on, and be close with them, and figure these things out.
And then, by doing that, we learn enough that we can come back and be operating from here, but we internalize so much that we have a way of working together. Where we can work with them remotely now in a way that I don’t think we could have ever just done from zero.
Sometimes we talk to people who have never been to visit their suppliers, and I’m wondering like, wow, how are you doing that? That’s weird. And then sometimes maybe those companies don’t last too long, and it’s like, yep.
What do you think are the biggest challenges that you guys are facing in the business right now?
Yeah. Well, we definitely like to look at challenges as opportunities, and we’ve looked at COVID as, how can we grow through this? A few months in on that you’re like, whoa, okay. Sometimes challenges are straight up challenges. And we’ve had to deal with that.
A challenge is growing up as a company, I’d say. We’re a bigger team now, we’re 30 people; we’ve got to put in new processes, new systems. How do we stay true to who we are and our core DNA, but also maybe take on some of the corporate things here or there. There’s a reason that some companies do certain things, and there’s a reason that patterns emerge in successful businesses that are around for the longer haul.
So how do we grow in a way where we can scale ourselves, yet stay true to ourselves? And that’s something that is a bit of a constant process. And then, of course, you plop COVID on top of that, and I feel like we were just getting the hang of certain things. We were honing on different financials and margins and this and that, and then it’s like this bomb exploded. Which takes us back to our other DNA, which is being super scrappy and just getting by.
The forcing function. If you can survive through this, it probably gives you great confidence that you can survive through most things.
That is true. And it’s like going through a big storm, and it’s not necessarily the funnest thing, but if you make it through that, you’re kind of [all] the stronger for it. At least you know what wherewithal you have in you.
It’s actually been a great thing for the team, because people [have] joined at different periods, and you can imagine for someone who has joined at more of a high, well they get to experience the storm together, and they get to see how we respond as a team to challenges. And it’s become a large team building thing. We don’t need to do any offsite this year. It’s the whole challenge has been.
You mentioned you brought marketing in house. I suppose it’s a question every e-commerce company will have is, what do you guys see as your most effective user acquisition channels? And, have you tested any user acquisition channels that were just complete flops in the past?
Yeah. So great question. And to the extent that we outsource, we do many things internally, or manage it internally. And our marketing director has a lot of hats that he wears. And sometimes there’s things that we are particularly good at that we’ll just choose to do. And there’s other times where we’ll — when I mentioned outsourcing that earlier, I was referring to helping on some of the ads management, whether that be Facebook, or Google, kind of SEM kind of stuff. And we happen to be working with some great partners, who we’ve had them work on one part, and then we take it back in house, and then they work on the other part, and we’ll shift it up.
So people sometimes ask what do we do, marketing wise, and they think that there’s one secret trick. And there have been times — there were times very early where we had some huge success with Facebook, and it was like a total wild west of just relatively easy acquisition. It was before everyone was doing it.
And over time it became, okay yeah, we do Facebook, we do this — we even had a week where we were killing it on Twitter. They like sent us these awards because we had such high engagement, and then we could never get Twitter to work again.
So we try everything. We try it all, pretty much, if we believe in it. I sometimes get really excited about something. Like I was recently excited about this certain like affiliate, I’m trying to remember what it was. There are these different programs that we’ll get excited about, and think, oh, it could go really big. And we try it out, we give it a try, and you know what we’ll do if it doesn’t work? We’ll retry it later, we’re not afraid — there’s that expression I like that’s, don’t scar on the first cut. The point is, maybe something works one day, maybe it doesn’t.
So the short of it is, we do a little bit of everything. So social media paid, social media unpaid. Influencers, press; press has always been an important thing. If you’re making genuinely cool products, get them out to genuinely cool people, and writers, and influencers, and tastemakers, and let them review them. And if it’s great stuff, then they’re going to write it up.
But we do it all. If I were to list it out, there would be ten different things. Do we do social media? Yes. Like have we tried advertising on LinkedIn? Yes. Is it working hugely right now? Not really, but we still maintain an active account, and leave postings on LinkedIn, and for all we know maybe a year from now we could have a big program going on on LinkedIn or something.
So we try a little bit of everything, and sometimes things work better than others. And when they do, we’ll lean in hard to it. But then what you can have happen is, all of a sudden, maybe that dries up a little bit. So being comfortable — being a real multidisciplinary, multi-capable sort of team and approach is key, because when you look at our toolkit from a marketing standpoint, we can do it all.
You think if you’re going fishing, and you just have one lure, it’s like, okay. Good luck catching that one type of fish. But if you pull out all sorts of different lures, and contraptions, and this and that, all of these different things, we’re going to catch something. And we’re going to also move around and find where those fish are.
And I guess better than fishing, I’d like to think of it also as cultivating. One of the most powerful marketing things you can do is, with your own customers, is building and growing your own customer base for the longer haul, and taking care of them. Effective customer communication and just treatment and service is a hugely important part of marketing, so to speak.
So that’s a really important thing. We really genuinely do it all. If someone were to say, what’s the special ingredient? It’s like a really good mole sauce with 100 ingredients. It’s like it’s not any one thing that’s making it all, there’s a lot, and it’s hard to know exactly…
The sum is greater than the parts.
Yeah.
You mentioned – if you’re making a really good product, get it out, and actually get people to hold it, and touch it, and feel it. You operate in a space where there’s a shit ton of competition, and there’s a lot of crap merchandise out there. How do you go about ensuring that you guys are seen as the leader, and kind of differentiating yourself from the rest?
Through genuine new product development. Even if we’re doing a cable, we’re not buying a cable and putting our name on it. We’re thinking about the metals, the plastics, everything about it. To different degrees on different products.
But by really taking it on from the ground up, we know that we’re able to differentiate — and I’ll tell you, people have a part of their brain that just blocks out things that look like something else, and it’s an efficiency of how we’ve developed and evolved, is we group patterns of things together, and things that are different stand out. And when you do something that’s genuinely new and custom, it catches people’s attention, because they haven’t seen that thing before.
So by the nature of it being unique and yours, it’s going to stand out. And I’ll tell you, in this world, there’s a lot of people trying to slap a label on something. And to those people, I say, good luck; you better be damn good at marketing, because that’s going to be how you differentiate. When we can come out with a cool product, we can still hopefully be pretty good at marketing, but hopefully we’ve got a good thing to work with. And that’s not to say that you can’t be successful in that, it just means that you need to recognize, what is it that you’re doing? What are you selling? Maybe you’re selling a story more than a product. Maybe you’re selling a blend of these…
That’s exactly it. It’s a story as well, because from a visual perspective, if you see your cable, it looks entirely different than the standard cable. But then the follow up after that first three second visual impact is, why does it look different? Like why are they doing that, folding it a different way, or using a different material? And I think you’ve got to have that story behind it. It’s like, hey, the reason we do this is because you abuse your cables, they get twisted, they fall apart. The way we do it, it’s better because of X, Y, and Z. You’ve got to have that story to build out, and for them to really build trust in your product.
Absolutely. And so that’s where I think some of the website and the materials take it to life. I mean you take something like our UPC, and this is a podcast so people aren’t going to be able to see this, but I’m going to show you. That is our UPC is one of our products.
I’m going to describe this. So the barcode [UPC] is obviously vertical stripes, but then surrounding the barcode is a tent, and that then merges into two people around a campfire. It’s a piece of art. It’s beautiful.
And this is machine readable; so you can scan that, and that scans. So that’s what we would call a touchpoint. And I think that those are things that are fun, and bring things to life. Now is this an innovative, cool, new electronic product? No, this is just a barcode. But what I think this shows you is that there is room in what you’re doing. To the extent that someone is — maybe even imagine selling a commodity product.
Well, what’s the experience? Like what’s the goal? What are they going after? Well sometimes the commodity product, they’re more just going to go after a lower price, they have a really efficient operation, that’s fine. Or maybe they’re in a competitive space, and they have more room to really focus on the delivery and the experience side of things.
So you can see it from the Nomad level, because we develop our products internally. We do a little bit of everything. A little bit of product development stuff, which is a big, big part of it, and then brand experience, customer experience, all of these different things.
So for us it’s a real blend of these things. But wherever you are in this value chain and proposition, you can differentiate and develop yourself and find touchpoints, areas, to get in there. We started doing sticker packs, so when someone gets an order from us, they get a little sticker pack, and then it has a little story in there, and it has these stickers. And just like any product, we made the first one, and then V2, V3, and then we’re probably on like V3 or 4 right now.
But the point is having those extra little surprises for people, and a way to interact with someone, is a key aspect. If someone likes their little packaging thing and they receive that, they’re going to keep it on their shelf at home, and then they’re showing their friends. Or if there’s something funny or unexpected about it, again, you’re breaking a pattern. If someone wasn’t expecting it, you’re giving them a positive experience; you’re creating a genuine interaction. And that’s something that people are going to remember, where you’re going to stand out.
And I’m sure we’ve all had that. I was at a restaurant recently, and I think at the very end — it was like a mall cafe, it was nothing too interesting — and at the very end there, there was like this unexpected little chocolate, and I was like, oh, that’s a nice touch. In my mind they jumped up a whole star ranking. Even though it was a very generic little chocolate thing.
When I see things like that, my thought process is, well that’s a small thing. It doesn’t make the product incredible where it was shitty before. It’s a small thing, but if you care about the small things, you care about the really big things. So it’s almost like an insurance policy, where I can’t remember if it was ZZ Top or AC/DC, when they were touring around, they used to have this big pamphlet they’d send to Wembley Stadium or wherever they were playing that day.
And on page 66 or something like that, it’d say, it has to be brown M&Ms in the thing, it can’t be multicolored. So when they walked in, they initially saw, is it brown M&Ms or is it multicolored? If it’s multicolored, they obviously hadn’t clearly read through the entire spec for the show, which means maybe the stage wouldn’t support the weight of their speakers or something. It’s a quick insight into what else could be going on with the product.
That’s exactly what our UPC is, because I’ll tell you, it wasn’t the first thing that we started working on. These are the types of finishing touches where it shows they probably did a good job on the cable braid, or on the connectivity, and all of these different things, because those are the things that you would do first, and those are the polishing touches.
So I just think that there’s so many ways to engage and interact. So it’s important to not get complacent with your own selves; to keep on going with the same energy that got you going to begin with. You just never stop. We’re always a little bit uncomfortable with our products. Well, when we launch them, we’re all excited. We move to a site and then we get all excited. And then of course we always look back months later and we’re like, I can’t believe that was our website.
But it’s like this constant process of reflection and improvement. And I think for companies that are successful, generally, whatever their product or service is, they’re constantly — they’re never fully happy. It’s good to celebrate, and have a launch party, and appreciate the work that you’ve done, but you don’t want to get too comfortable.
Unlike other companies we speak with, you guys are taking a bit of a different approach in that you aren’t trying to be 100% direct to consumer. Talk to me a little bit about how you balance the wholesale versus direct consumer portion of the business, because each side has pros and cons to it.
Yeah, they do. And we started direct to consumer obviously on Kickstarter in 2012, which is about as pure direct to consumer as you can go, considering you’re selling something to people that you haven’t even fully finished yet. And you’re not sure if it’s even going to work out, and they’re kind of investing their hard earned dollars in you. And I’m incredibly grateful to the Kickstarter backers that we had. And now we have these customers all over the world.
But when you look at the breakdown there, margins are going to be better overall [with direct to consumer. You’re getting a bigger slice of that sort of sales pie. There are associated costs. But the reach could be smaller, because you have your audience, and then to the extent that you can grow and expand that audience. And you often find in online marketing that you get some good acquisition at first, but it sort of falls off how far you can get. And it starts to get more expensive or difficult.
So how big can you get your pie? Well, with offline retail, you’ve got other people who are going to kind of market you into their customer bases, whether it’s through a larger U.S. retailer like Best Buy. Or where we’ve had a lot of success, with smaller international ones. So they’ll take us into their often tightening, curated customer bases and do a great job pushing us in and through that. Maybe that’s going to help us develop some of those customers, and they’ll come to use internally, which could be pretty cool.
So it allows us to grow our customer base, through the help of other players. If you were to think about it, if someone was going to come and go market you into their group, and then you’re going to grow some customers from that, that’s a net win. Even if on a per sale margin basis it’s going to be a lot lower at first. We’ve got to be thinking long term. And if you’re developing a brand, it’s all about long term, and long term awareness and customer bases.
Maybe someone sees you in a store somewhere, they buy it in a different store, or they buy it on your website. The acquisition process can be a long journey itself. So to the extent that you can get help from retailers to do that, it can be valuable if it works for you.
I think of some of our partners there, we have a very close partner in Norway, we have a close partner in Austria; we have a close partner in China. I mean would we be able to have [had] the sales that we had developing our brand in China without the help of that partner? No, we wouldn’t. And that’s kind of an extreme example given the cultural and sort of financial, legal barriers there.
But you look at other markets, like Brazil and Russia, that maybe are difficult to even ship to from the U.S. Now, on the flipside, like we are happy to ship to customers all over the world, direct to consumer, to the extent that we can.
So a word that many people will use is omnichannel, where we are doing — back to the marketing discussion, we’re doing a little bit of it all. We’re doing direct to consumer U.S., direct to consumer international, some retail U.S., retail international.
But it doesn’t mean we have to do everything. We don’t need to be in every major retailer. We don’t need to be in every small one. We can pick and choose what works for us.
Do they have a customer cohort and group that aligns with who we are? And they helping us reach our goal? Is our goal to sell to nomads all over the world? Are we able to hit them all ourselves? Well, if not, would we then need partners to help us in that mission? Now, it’s important to get down to your metrics, make sure you’re doing things that work so you’re not too over extended, and to be walking before you’re sprinting.
And we certainly have taken that approach. We did direct to consumer for two or so years before we got into any retail. But at that time, when we got into retail, we got into Best Buy, and we had some huge, huge orders that really allowed us to grow as a company, and they even helped us develop different product concepts that we may not have otherwise done.
So both sides of the business in that regard have helped us grow in different ways. And I’ll throw one more curve ball in there is we now have the Amazons of the world, which is what we may call B2B2C; you’re sort of selling through a business to a customer. And that’s been another channel that’s actually…
Seller central or vender central in that analogy?
Well, that would be seller central, because you’re kind of selling direct to consumer but through the business.
They’re still not your customer, they’re Amazon’s customer.
Yeah, it’s sort of like a hybrid, because you can like ship to them, you get their shipping information; it’s sort of like halfway there. When you do the vender model, you do have a lot less visibility, because you’re selling to Amazon and they sell it for you. We’ve found Amazon to be challenging. It’s been tough — it can be a mess with the way all of the listings go, and people throwing stuff on there. It’s been challenging, and we haven’t had the sales growth in Amazon in the same success that we’ve had online and with some of our sort of retail channels.
That doesn’t mean that we’re not shaking it up and stuff. And again I think COVID has thrown a big wrench into all of these gears. So we want to make sure that we’re looking into things again, to make sure that we’re relevant with the changing times.
So I have a question I ask everyone. What are the main tools that you guys use to keep the business running day to day?
We’re very happy on Airtable. Airtable has been a powerful tool that we’ve found so many different uses for, and that’s been a really powerful tool. Shopify has been an incredible platform for us. We’ve been on Shopify since 2012. And it’s funny, because we work with so many different SaaSs, and everyone is always claiming they’re launching their new product or service or thing. And it’s just a few months away. Shopify freaking delivers.
So it’s been fun to see all the tools and upgrades, and they’ve always done reasonable pricing. I hope they’re not listening to this. Don’t want them to raise the prices. But they’ve been an incredibly powerful platform. There are simple tools that I’ve found helpful. I’ve always liked the CRM Streak, just integrated right into your Gmail, and it’s just you don’t have to go out and use this whole third party system.
ShipStation has historically been a really powerful shipping tool. And Skubana is a tool that has been growing, for us more recently, over the past couple of years. And it’s become quite a powerful kind of order, shipping management tool. So tools are key. We have always been like tool hungry, and it’s been one of the fun things about this all has been like the tool shopping. And we’ve had great experiences with some of the stuff I just mentioned.
We’ve had things — I won’t name the ones that haven’t stood up to what they were meant to be, but we have a whole closet of dead SaaS that just is not what it was promised to be.
QuickBooks has been a powerful financial tool. QuickBooks Online, they’re one of the big industry softwares, from Intuit. But when you get down to the finances, you do need to have a really powerful thing. We tried a different one before from a much smaller outfit, and it was supposed to be able to do all of our accounting stuff, and it just really didn’t stack up. And the problem is, when you’ve got your finances and taxes and this and that, you’ve got to nail that. So that’s one of the larger ones that’s been helpful in that regard.
Yeah, especially tax stuff with QBO, QuickBooks Online, there’s such a large community of tax and accounting professionals, that know how to use the product inside and out. It just gives you a lot more functionality than say if you were using a brand new tool. It might be the best tool in the world, but if there’s not CPAs out there that know how to use it, I don’t know how useful it is.
So final question, and it’s a bit of an extension of the one before it, what advice would you give other e-comm entrepreneurs, or e-comm entrepreneurs who are just starting out? Like what should they be focused on? What should they just forget about and not worry about?
Get their hands dirty, get in there; you don’t have to be a coder to test out these tools and to get dirty and to learn about them. And try to go direct on different things to get the direct experience. We talked about earlier how we’ll work with firms and stuff. In order to get to work with them, you need to also know a bit about what you’re doing first internally. So then that allows you to work with externals where need be.
But get your hands dirty, try a lot of different things, experiment. We’ve had some successes; some of our biggest successes ever were through questioning things, experimenting with things. In the very early days we were watching a lot of these Netflix on CDs while we were packaging stuff, and the insight was like, okay, how do they ship these CDs for $9 a month, these DVDs?
So we looked into that and we saw if it was under a quarter of an inch, and under an ounce or whatever it was, you can ship domestically for 49 cents and internationally for $1.09. So we were able to really hack the shipping system because of like getting our hands dirty, looking into things, and questioning how other things work, and kind of digging in. So within that, there’s another little nugget which is shipping; a big part of whatever you’re doing is going to be shipping.
So when I say that it’s like figure out shipping because that can make or break you. Because everyone has these ideas of like, we’re going to build a charge card, or we’re going to build a new sparkling water beverage, or this or that. Whatever you do, if it’s a physical product, I can tell you you’re going to be shipping. So you’re becoming a shipper.
And I alluded to this earlier when I mentioned that we do a lot of shipping. You’re probably going to do a lot of shipping, so no matter how cool your product is and this and that, you’ve got to embrace [shipping]. If you embrace shipping, that’s a huge part of your expenses, and program, and operation, and customer experience, and all of these different things. So there’s a lot of potential in something that’s as boring as shipping. So don’t get afraid to look at your line items of expenses, and if they’re big, get your hands dirty with them.
