Supply Chain Executives From The Philippines Completely Changed This 8-Figure Brand transcript

the most under optimized part of your e-commerce business is probably your supply chain the reason that I know that is because I talk to lots of Founders and very few of them have any idea really uh how much value there is left to create in improving their supply chain there are all kinds of ways this is the case and getting better terms better pricing lower mqs all kinds of different elements of uh supply chain Improvement that are possible in a business and my goto resource on all things supply chain is my friend laa gavara this is technically a sponsored episode but I would have published it had it not been because it is going to be so good and so helpful to you Lara is going to walk through supply chain improvements that she has made working with Section 119 Greg KY who you may have heard from before in this business a long time ago he came on the podcast point of this episode is they're going to walk through the actual ways in which given a bunch of time they have made improvements in SE 119 supply chain Greg will tell you how that has mattered in his business how much money they've saved and made by doing a better job in this case I really do think that most e-commerce businesses are wildly under optimized in this part of the business and if you had to if I had to bet on what area of e-commerce businesses DDC businesses we're going to be getting better optimization in the next few years like this is the the area where there's the largest Improvement I would say it's supply chain we we're doing a better job on marketing and finance and all these things but supply chain is still uh people are really behind and so I'm going to help you get caught up today Lara's going to help you really more than that and Greg's going to help you uh let me not delay this any longer let's get into it Greg Carrie and Lara Gara hello to you both uh let me let me do a thing so we don't talk over each other right now maybe let's start with Lara you are the CEO of more Staffing who sponsored this show for a long time but you have really deep supply chain experience maybe you can say hi and just give people a little bit of your background yes working with uh working with Supply chains okay so third um time also doing the interview with you Andrew and I'm very happy to do another one especially if it's supply chain just to make sure that I can help spread awareness and supply chain so more than 15 years of experience in in working for supply chain and I cannot um I'm very excited to share my the best practices cost saving strategies and how we can um improve processes in supply chain for especially for DTC Brands um finally I could say good morning from from California because when whenever we're doing a recording it's always um midnight or or weird hours from the Philippines but now we are here in California visiting clients for more Staffing and more supply chain so good morning and good afternoon Greg good morning Andrew and um I can't wait to share more in this podcast e e yeah so we sell uh officially licensed apparel so we leverage the artwork of you know some great iconic uh bands in in in history Grateful Dead Almond Brothers Beatles And so if you think about kind of the era that we're in the era of like you know really excellent operators and in apparel you have a whole new level of comp or not a new level but apparel brings another complexity to that and then imagine taking 10 to 15% of your net sales and sending it off in a royalty payment to your your business partners so section 119 I believe is is you know is um you know particularly kind of place to have this conversation because we're in the apparel business and we give away half of our you know we give away 10% of our net sales and so those constraints create even higher pressure situation for us to master our supply chain and all the learnings that I've experienced coming into you know D Toc e-commerce four years ago completely fresh and new I have learned the majority of those optimizations from Lara she was my first higher and my life has changed in our business trajectory has changed because of the early changes in intelligence that we brought into our business when we were doing less than a million dollars and it was those principles and best practices that have enabled us to weather this this rough patch and still give away you know that portion of that sale so huge thanks to Lara and you big fan you're saying giving away in terms of Licensing fees right that that just like the cut off the topy going to licing yeah yeah um okay and then uh can you give any people give people some kind of sense of the scope of the business now you don't have to say exact Revenue numbers but some it's always helpful to have some context for like where business is at as you have a conversation about something like yeah we'll do about 10 million this year okay cool that's great um so um yeah section1 19.com go get yourself I was actually I just now I didn't actually realize you had Beatle shirts and I was like oh gotta get some of those so big Beatles fan talk about a little bit more about the context here Greg for people to understand um some of what has happened in your business maybe you can give a little more intro around um how long you worked with Lura and her team and essentially like what are what were the supply chain problems to solve and and and just yeah give people a little more sense of of uh of the beginning of the journey essentially well if I even take a step back and think about just the the trend of e-commerce you know initially it was very focused around you know meta and and low acquisition cost some some labor some Arbitrage there and was that kind of filled the the the the Noise Within you know within the the space and that's that's that expertise gave you a great Advantage if you could get into Facebook manager and really optimize that that that is an advant huge Advantage if you can wrap a decent product with some pretty ads and beautiful landing page like that was the business then and then you know we everyone's at home government's giving us money um 0% interest Finance financing that that kind of continues until things start getting tight you know things start tightening up 0% interest goes away and the focus starts to shift to contribution margin and that required us all to be a lot more disciplined around how we were thinking about acquisition costs marketing efficiency ratios um and and linking that back to our our contribution margin um and you know driving the you know the available funds to operate the business and we're at this stage right now which I think is like the next era of the narrative which is hyperfocused on managing your supply chain because that is where all of the business profits essentially come from and at the very core of that is having an outstanding product that can te you know weather all these storms through the test of time and a lot of the principles that we kind of included in our business right from the GetGo are now proving to be even more valuable as we navigate this storm of it's it's more like you know it's all about staying alive in this era and so you know the effective management of inventory has huge implications not only on your cash flow but on your income statement right if you can manage that inventory more effectively you know you'll find yourselves in a situation where you're not having to run a you know a season-end sale and you know throw at all your you know your profits to kind of move that inventory in favor of getting cash but you can manage that more effectively and protect your your uh your gross profit right so there's there's interplay within cash flow and income statement of managing your inventory um you know there's the optimization of your Logistics as well a lot of people will use kind of various Market place in platforms for moving stuff abroad but having a direct relationship with the people that can move your Freight can dramatically you know impact savings but also just tighter controls on the timing of all these things and so you know and that those are just two examples and so just the what we've learned is just that that tighter scrutiny um during this period not only has benefits on managing cash and your income statement but it does also give you more room to be more effective in your acquisition strategy so as you know as things acquisition cost goes up the only tool isn't about optimization of your ads but it is to work that gross profit that product margin and to give yourself more room to invest in acquiring customers through challenging times and so these are all like big levers that move across all you know the balance sheet the income statement and and theh cash flow and by building these competencies early they have compounding benefits as the business grows and evolves over time and then when the the tide changes and it's a growth era you're now equipped to to Really maximize that opportunity but it's an essential survival skill now I think that's so right and this is part of why I think I think you just laid out the timeline of DDC really really well like and and I think I think part of the thing that's happening is that people are are with you on that point like they realize that there's huge value to be gained here but they have actually like no idea how to do it like if I say to you um hey your meta ads account use manual bids to get better there's like actually a lot of difficult difficult challenges to getting good at you know mastering manual bids but there's just like loads of content on that go join admission from CTC like you know go watch my content whatever there's there's plenty of that stuff out there if I tell you I I've had these conversations with running Brands like if I tell you we really want to like make it so that our of goods goes down but we don't lose any product quality or we don't have to trade that for um you know the volume of orders and and or or whatever like I have no idea where to start like I who do I get do I get on the phone with somebody from China do I just call my manufacturer and ask to pay less like what like that's probably not going to work right so like what are the ways in which you what like I have no idea what the Strategic and tactical next steps are to thinking through the tradeoffs involved with all those things and there are a lot of trade-offs so um that's part of why I'm excited about this conversation because because I think people they recognize the value of contribution margin still and even as they also become more tuned to like having a good cash flow forecast and some of those things and they see how much inventory ordering ma matters for their for their cash flow they just don't know what to do so maybe Lai you can talk a little bit about um the beginning stages of this when you think about sort of the big swings you took at section 119 U yeah I don't know start wherever you want but like uh in terms of terms of what where where the supply chain was and what you got it to can you walk through the beginning of like okay here's the here's the the big things that we did that made a really huge difference and yeah start wherever you want there yeah I I think um I I Greg hired me in the perfect timing of um the growth of section 118 wherein the uh founder who is also the designer of everything is doing the supply chain which is the most common scenario for based on my experience talking to uh a lot of um DTC owners they will start with um new product development they will Source themselves they will negotiate themselves and they will um bring the products in and and start selling the products so I think the best um support that I was able to create um I just wanted to give the five major categories of supply chain which is inventory planning new product development um negotiation with vendors the processes um the warehouse Logistics and the administration um the first the first um thing that I that I support it is the new product development the speed of the new product development and designs and I think this is very important for an apparel company the closet share the number of designs that you have per type of um clothing and then this and the and then the amount of um of of apparels that you can can launch even accessories at that time we still have masks we still have other products for um that we're selling for or in time for pandemic so it is a huge support for the brand that we can um launch new products as as soon as possible like if it's apparel we want to make sure that we can launch um from the design concept to sampling and and production to be able to sell it right away less than two months um and also it is being partnered with the analysis the data analysis and and um and and understanding how much you should be shipping by air and by SE so it's a combination of understanding how what is the pros and cons of um of sending some some percent of of that order via air and then following it by by um shipment via C it's it's it's always providing data to Greg my goal at that time to make sure that I have all the data I have the numbers I have my recommendation s and in one reading um Greg will be able to to give me an answer right away because speed is the name of the game and supply chain and and um that is for the new product development um the inventory planning was the next step that I I that I supported with Section 119 wherein there's no um the designer of the designer is not very um conversed with inventory planning so I created a template from from ground up so it's a combination of using stocky which is our tool at that time it's a free um tool for um under Shopify and I used that to download um quickly the data that we have the sales data that we had six months um 12 months ago and use that to to create the template the forecasting template that I that I created for Section 118 including the growth factor that we want um the seasonality of the product that we're we're ordering and other aspect that is uh required to to complete the formula of the forecasting and from there we uh we had a huge improvement from being out of stock um to having a a be a better um number of products in our warehouse and Then followed by negotiations and savings so we identifi the lwh hanging fruits in in in negotiations which is not just not just always um unit cost but also payment terms minimum order quantity and the lead time that you have so from from the initial 30 to 45 days production understanding the processes with your vendor can help them lower or or or lower down the lead time for that and at the same time discussing with them the raw materials that they use understanding the tier two tier three vendors it will all um um contribute improving the minimum order quantity so sometime I I can clearly remember another um um an important event in supply chain section one in the supply chain before when where we help our vendor find their raw materials so that we can also um reap the benefit of having a lower mq so they are they have their own vendor of the the Fabrics but we Source our own fabrics and we support and and we and we connected them with our vendor of fabric vendor so it's cheaper and at the same time it is readily available and that reduces our lead time from 60 days to 30 days and that that that that's very important for us because um at that time um um um that's ssbd um but and downs for for for our products so a lot of of those are are have been um like simp Le projects but has a huge improvement in our supply chain and after that we initiated um hiring more experts like for example since I did everything even the administration of auding product in Shopify creating barcodes and and um doing doing all of the administration in supply chain is part of my job description at that time but we we grew so quickly that after three months I hired Gaza as my first hire in section 118 and after one month we hired Kate who supported Greg so it's a huge I think it's a uh it's a quick um Improvement and and development for Section 119 that we were able to hire um new team members that supported me to do the projects the savings initiatives and all of the supply chain tasks that is um very helpful for the business there's so much there um is really quickly actually I love the list of five areas of supply chain could you rattle those off again just those five areas we might be a helpful thing for people yes one is inventory or demand planning for casting second is the new product development um third is the logistics um and then then warehousing or the 3pl and fifth um is the administration or and the coordination of all those four so those um th those categories we couldn't leave one for supply chain that's why um when I was doing it in the beginning I should I should divide my time how to um develop new products at the same time manage inventory coordinate Logistics and track where wherever our um shipment is coordinate with our 3pl at that time um not just receive receiving products but also making sure that they have um they they they can they can accept or receive our products in time and then the coordination of all of that to our marketing to our designers or customer service supply chain works a lot with cross functional team and so coordination is very very important okay so I want to I want to go back to a really specific thing that you said and I don't know uh I'll be curious to hear your thoughts on this too Greg but um when you you you gave this very specific example here of you went to your manufacturer and you went and found them a new raw material supplier is that right is that what you said you went and found them that and and by doing so they were already ordering their raw materials from some supplier probably somebody that had a relationship with for a while but didn't have a great reason as my guess for them to go and like shop that really specifically for your business in a way that would make the most sense they just had their partner for that or whatever so you went not around them or whatever but you went separately from them and shopped a different raw material supplier that you connected with them with and said to your manufacturer if I'm I'm going to I'm going to walk this back and then you tell me what I got right and wrong um so you um you said to them hey we want you to buy your raws from this manufacturer from this raw material manufacturer instead of or supplier instead of uh instead of the one you're using and the net result of that was you cut your lead time in half and also reduce the cost of the product is that did I get all that right yes that's right okay Greg oh yeah go ahead go ahead Laura say say more about that yeah so actually we are very fortunate that our vendor is very um Cooperative so they're not um married to their um um fabric vendor and they are open to us helping them and the reason for for initiating that project is because the lead the lead time is 60 days because 30 days is their lead time to order that raw material and 30 days to produce so we we uh um connected with the vendor how we can support if we find um it's in it's a fabric vendor if we find a fabric vendor that can supply uh very quickly lower cost same design um good quality designs if they are open to getting from the vendor and they are very supportive in in that project so what I did is instead of relying on their supply chain I know that my expertise is sourcing I find a fabric supplier um and then I connected with them so I did the negotiation of the cost of the fabric to their vendor to that vendor and I ordered um the roll of those Fabrics um and paid for it so instead we recalculated our cost of of that product instead of um um getting the that fabric Cost Plus the the cost produce we're now just um paying them the cost produce because we own and and we we buy our own fabric and that made us very that gave us the flexibility to order our raw materials separately um not just cost Savings in the raw materials but it's I think the best um result of that project is um reducing our lead time from 60 to 30 days it's I mean it's like huge I mean your on your cash flow Greg what what like did you just like do back flips when she told you that I that's like a massive Improvement to the business oh I mean there they're all significant improvements that for the you know the supply chain Layman of which I was uh you just have no idea that that these options are even available uh where to start never mind the the time consuming exhausting effort of being up at the middle of the night you know being on WeChat with China and so the big theme here is you know at at this time we're a company like barely you know just on our way from like 1 to three million maybe back then and the big another big kind of you know value ad is is just removing all this stuff that was done haphazardly you know you know adding risk to the business and bringing in expertise to leverage all these savings to manage it with much more accuracy while also freeing up executive share this this it went from being a a exhausting burden that was not done with any sort of care or expert care is the wrong word but expertise and now we have a team that's bringing and surfacing up a process that now requires a half hour meeting to on a weekly basis to say hey here's our inventory here's our current inventory the velocity of each product and making recommendations to me about what we should order I just have to go through that approve disapprove and then also looking at the split because when you're in this stage of being you know sub five million or so you got to get a sometime in apparel you got to get very creative in terms of the ordering process to make sure you're keeping inventory on step you your your mechanisms for tracking invent or your ability to build consistent demand is not is not not really ironed out yet and so you're dealing with these fluid motions of of demand ad performance running out of stock having to chase that really quickly and so bringing that that weekly report where you can make decisions and then say hey I want a third of this to go on a plane I'll take a I'll take a hit on my my product margin in order to get it in stock because that seasonality window is collapsing right and so and I don't want to lose those sales so it it it doing that you know alone as a business owner or founder in the middle of the night aside from everything else that needs to be done is just is not able and it it is this this quality at that stage this expertise that does give you you know more Breathing Room more effective management of that stock reduced risk because now the inventory that you're holding is a much healthier inventory not based on what was this kind of like gut feel of you know not enough instruments kind of appropriately forecasting and so being having this expertise allows you to even just build the momentum not have these laws so that you can give yourself the opportunity to get to that stage where you can you know hire that next you know inhouse you know fraction or that fractional CFO or where you can get to that stage where you can hire that in-house creative director along those earlier stages part of it is this Challenge and this goes to not just Staffing remotely but in the early stage you're just getting from one stage another to kind of build out your team and the competencies so that you can break through through to the next stage and supply chain is requires expertise that you can only learn by like getting into it well a there's nothing that you can learn unless you've lived in it and uh and that's like that was a huge learning for me to witness you know Bri and laa and her peers on board I have a quick funny story about about this um we majority of the team members that I have in in the fractional supply chain and and the and the talents that I've recruited we've worked together uh we've worked for more than 15 years in supply chain so since we are in the space of uh in the topic of also spreading supply chain awareness I think what I wanted to to share is that there are experts in this field that you don't have to um Do It um solo you don't have just like Greg said it's going to be very um uh it's going to be very tedious if if the founder or the group uh if the if the owner of the company is doing it so that's that's one another is that since we have that more than 15 years of experience in supply chain working for multinational companies we're very versed with the projects of of supply chain and working with an e-commerce it's it's like um unlearning the the the practices in in the multinational company and like uh um slowing down or or or degrading some of the projects to so that we can tailor fit it to e-commerce businesses and and so when we have projects like this that we share with Greg um of course we receive um a lot of appreciation from from from the owners but when we were discussing internally with my Filipino teams like those are very basic those are just like what we're doing in in our previous work this is not even um what we're planning to do in the future but we are we have saved thousands of dollars we have launched more products than expected and we grew the company and we were able to hire um other talents as well so we started hiring supply chain in the beginning but then we we hired graphic designers customer service finance roles as well remoting the Philippines so it it allowed us to not just expand our product line um and and reduce our cost but to further provide savings to our brand because we were able to hire more talents for us so so again it's it's um we we still have some tricks up on our sleeves until now now that we're also very free to travel like just what we've done attending five day Canton Fair event in China seeing seeing our vendors actual manufacturing process and and having that connection relationship building with them so it's it's more more to come more project and I know that um for for for new business owners who are navigating early supply chain there are more um available strategies right now that that that is um readily available as compared to five years ago when we were when we were doing section one and I'm hoping that more and more awareness I can see more awareness and then tweets coming for supply chain and that's the goal is to make sure that we will be um we can support by sharing more information by listening listening for this to this pod guest I mean it is funny to hear you to talk about the difference of those things right Greg you framed that as like I have no expertise in supply chain and I'm in the middle of the night we chatting with Chinese manufacturers just like completely Fish Out of Water basically right you're you're it's not a matter of care or whatever but you just can't do that right um and Laura you're like yeah that was like it's absurdly easy for us and you said to me the other night actually Laura at my house right you were talking about like when people come to you you with supply chain questions now you know when they when they come for fractional Supply Chain Services or whatever they're like the questions you guys get on calls or like when you when you first hear about the current supply chain and stuff like that you're like essentially trying to hold back laughter because it's like it's so absurdly under optimized um and but it's funny because because you it's that it's it's that easy you know you're saying that but on the other hand um Greg you know when I when I said when I tell the story of like going and finding a a um different raw material vendor for your manufacturer in China even if I tell you hey that's a way you can make your like create drastic improvement in your supply chain like you might as well tell me to speak Japanese like I have no idea where to begin started you know what I mean I have like it's it's just it's just the relational Gap there the language Gap you know the the um time zone Gap all of these different things create all of this friction to actually going solving that problem um so I'm curious in in section 119 were what were what were other large scale supply chain improvements that you guys were able to make happen um you know maybe maybe it's a different part of the supply chain you know you mention those five different areas or whatever but what else sort of uh sort of happened uh that created meaningful value in the business well I mean I'll just Echo your point too about you know if if I had even conceived the notion that I can find raw materials that would send down a wild Boose Chase of a unbox you know I can't even box that time effort and so now it becomes something that is out there that you know I don't know how long it's going to take I don't know where to start but if I invest any time into it to grab the benefits and opportunities I'm inevitably pulling away from another part of the business that's right yeah 100% yeah the executive mind SharePoint is really important yeah you know I think I at this stage as Lara says it's like oh you know cute you know this is like cute level supply chain when you're sub five million yeah and they all add up in terms of inventory on hand right so how much inventory do you need to keep on hand if you're smarter and more informed you can keep less inventory on hand and be more adaptive to you know the the rise and Tide of Demands which reduce risk but also optimizes your cash right so that was just that right there you know huge huge huge value the negotiation of not just our you know raw materials or you know a buck or two here on product costs or negotiating Freight options by having a direct relationship all these things just trim away at the the landed product cost um the ability to just have all this be now almost invisible to me as you know the operator as the you know business owner and knowing that a team with competency is getting it done it's like I don't I don't I don't have to worry about how things get from A to B anymore and that's not always a simple process you know the tracking the documentation all that stuff and so the big lever here aside from like removing inventory risk improving cash flow the big lever here is is freeing up you know the business owner mind to think about what the priority and the big levers are to get to the next level whether that's finding the next key Talent whether that's you know thinking about the next assortment expansion product release you gotta a lot of that early journey is you know protecting that time offshore helps to do that but not offshoring with a bunch of vas offshoring with yeah right expertise yeah you know and yeah you're gonna hear it more and more you know Taylor over Collective Common Thread just had a great chat with chubby CEO Kyle leaning into this you know Erp software to equip this this cohort of entrepreneurs that don't have you know the sophisticated tools to really get that next Next Level and when you get empowered with that next level then you can have a tighter control of your profits tighter control of your inventory you can start to synchronize you know the balance sheet and the income statement with the cash flow and have them work in unison and doing all these things helps you to deliver profit better and so that's why we are in this stage where the profit of your company relies on it lies in the supply chain that's and that's the quality of the product that the people love lies in your supply chain you know the effectiveness of your inventory lies in your supply chain getting it here on time lies in your supply chain so much of this business lies in your supply chain and the earlier you build that that language and those competencies you you're especially in this era you're dramatically reducing the risk and giving yourself that Fighting Chance to survive this tough Market with expensive debt um climbing acquisition costs and so you owe it to you know yourself to navigate that um and so that that's like the key thing that can't lose sight of yeah and at the end of the day right these are consumer product businesses like like there are sort of only two things at the end of the day which is that which is the customer and the product and like the whole the whole apparatus is built to get the product to the customer that's it you know and and so like it makes sense to me the supply chain is this is this crucial thing to get right on that um maybe Laura you can even speak to some of the other sort of stuff uh if if uh if the the raw material vendor change is uh Child's Play like was there anything else that you did that were like the major levers maybe even if it was like a little trickier or whatever actually everything that I've mentioned let's assume it's level one and the good news that I would like to share with our with our listeners is we're just approaching level do so an example of what I'm working right now is working with um um an app or program company in in developing their forecasting um tool and at the same time there are um um companies like portless doing different kind of shipment that can help DTC Brands and at the same time there are transitioning of vendors from China to other Asian countries to avoid or to minimize the taxes that um Europe and Us in in in imposing for for um China products so there are like there are a lot of projects in the pipeline that is happening at this point and and in the beginning we're we're um hoping to support um the the the five categories of supply chain like the basic inventory planning um understanding if are you is your product better Overstock or underst stock there are not not all out of stock is a negative thing sometimes when your when your product for example is very expensive and and and huge that can incur cost in your Warehouse it's better to be understock than Overstock and so those under that understanding in your inventory the negotiation if you have the if you think that you have negotiated the lowest cost for your vendor what's the next step it's looking for alternative vendors and not just looking for alternative vendors in the same country finding alternative vendors from other countries so there are like let's do first the basic things that we can do for your brand when that's done let's move to the next level and then moving higher and higher up that you are that the business is growing um together with your supply chain strategies as well so again there's more um more projects to come for for supply chain we uh we we uh the experts um the supply chain experts in our team are um doing trainings non-stop Mastermind the the talents that we have um um deployed to a lot of our clients we we keep on meeting uh for Best Practices like if someone find I found this vend I found this Freight forwarding very cheap compared to our existing they will share and when we will connect we will we will ask it's like making sure that we have like we have like a community and and we're doing or sharing best practices and vendors together so that we can support different brands and um a supply chain manager for for example for an apparel can support a lot of similar um DTC Brands and we also handle like formulated products we also have clients in the accessories products and and not just apparel but also um some some in food industry so it's it's very important that we um share the best practices with each other and at the same time I think that's the best um advantage of of supporting different DTC brands in our fractional support is because we learn new things with new clients and so we can um support other clients with with that readings as well um you know it's funny you say the thing about uh about like different kinds of suppliers because uh because again when you when you were at my house the other night the um I showed you a product that was really interesting to me and you you and Gaza both did something really funny that I noticed right away and I was actually telling a friend about this which is like the moment I show you the product because you're supply chain people the way you are uh you just experience it differently than anybody else I would show it to uh everybody else would look at it and like try to use the product or whatever right away and be like oh you know just kind of look just take it in as from a consumer perspective but you guys immediately are flipping the packaging over looking at the raw materials thinking about like oh what is these versus what you know just like looking at the packaging itself thinking about the price per ounce and oh how much are they charging for this you know it was just a really funny it's the same thing I do anytime like an ad comes across a feed of mine like I I can't actually see the ad anymore like all I do is see behind it you know um but yeah it's funny and then that actually leads to this this point I think which is which that you said is helpful which is you know the whole idea of like an ad agency is that there's shared knowledge in at an agency level that comes by looking at a lot of accounts and an ad agency is as good as they are like basically the thing that will make an ad agency good is their ability to distribute that knowledge operationally across the whole company so that any AD buyer on that team or any creative on that team is using the knowledge that is pulled at the level of the agency but it's actually really hard for an agency to do this right the pool of knowledge getting it into the into the rest of the agencies is very difficult so great agencies operationalize that knowledge really well and what you're describing is basically the exact same concept at the supply chain level which is like hey we actually have access to way more businesses and see way more Supply chains than you do uh you know just trying to do this internally yourself and so what we're going to do is pull that knowledge internally and you know you guys right now are relatively small team like pull that knowledge internally and say okay we can we can leverage this like B this Baseline of knowledge across a lot of different stuff so we can go across Industries and things like that and and have insights into into these different things when the when the supply chain problems actually do get harder um you you also something else that is is so interesting to me at sort of a strategic level one uh sort of unrelated but I just wanted to comment on it which is another thing I saw happen this kind of is the state of the DDC industry over the last few years has everybody started thinking um for the first time really seriously about cash management I think Co made that come into Stark relief for a lot of people right people were either ma they were for a while massively understocked relative to the moment and then after that they became massive overstocked for the moment because they all over ordered once the supply chain slowed down so much and shipping slowed down um and it created this conversation in DDC around um inventory buying strategy um and I actually one things I noticed is that people really fetishized for a little while the idea of very fast cash conversion Cycles um and they they love the idea that you would be able to um turn product into I mean there was I remember a lot of stories about Jim shark having a negative cash conversion cycle and some of those things and it was like oh wow that's what you got to go do but you said something really important that I think is something people don't consider enough which is like that actually may be completely the wrong decision for you you only need a fast cash converence cycle if you need cash but actually you may depending on your business really want uh not so much the cash uh benefit you actually may be better served in your business by stocking a lot more inventory so that you do not run out of inventory when big moments come because I I deal with lots of brands that run out of inventory all the time and you think about this if you're like a subscription supplement brand and you got all these subscribers actually the it's it's a way bigger risk to you to run out of inventory and have all your subscribers miss their subscription and get really mad and that's a bunch of banked cacf free Revenue that could come in and if you run out of the product like it's it's a really big problem for your business so you'd rather be overstocked there or you think about a very high margin business where um where you know it just simply doesn't cost that much cash to um to store a bunch of inventory because it's just the margin so high that the product doesn't cost that much and so for that business you would want to strategically think about like actually we just want to make sure we never run out of inventory it's not we don't have cash problems in this business it's just the cash turn you know the inventory turn is just not that big of a deal to us um we actually sort of would rather optimize for the p&l in this respect and think about uh profits in that in that respect because profit actually is cash for us you know so um obviously that's a really oversimplified version of it but I think that Baseline consideration is really helpful because if you go to the next level and say now how do I go negotiate with my manufacturer you're not going to go into that conversation with like we want faster ter or we want um we want uh better terms or something like that like if the cash outlay is not that big of a deal to you maybe you can help the inventory or help help the manufacturer out by not demanding better terms from them and instead taking a better per unit cost or something because uh because you can actually win there without you know you have plenty of cash it's not a big deal so you can go and and do that and and so anyway I think I think it's a really important question that people do not think that well about or that carefully about a lot of times and even like product by product you know higher margin product versus lower margin product this one you want to be stocked more in this one less and so there's like a lot of analysis at a baseline level that that goes into that so um okay uh each of you each of you should make one more point and then we should we should wrap it up so um so Greg what did you want to say there I'll I'll kind of tag it on to your your point there I I will say that you know all those kind of different kind of variables that come into play with your decision making kind of point to the point point to the point that every company is different yes right every company is different you cannot copy their ad strategy you cannot copy their supply chain strategy you cannot copy whether you do free shipping or not you are your own entity and own operations and and you need to run the business that you need to run and one of the things that I think I've realized with that is that there's no right now at you know at level at least there's really no tool out there that can help you effectively manage your in inventory the only tool that can in take in all those unique variables is Excel and someone that knows what they're doing because it requires conversations with with with with a multiple uh multitude of stakeholders within the business it is alive there's different ad campaigns different strategies things are seasonal things are not there's too many assumptions to then rely on technology at least what I've found and so to maximize the intimacy that you need with your inventory you really need someone who can Master Excel and master inventory do not rely on on these tools Shopify apps they will they will get you in trouble and you need a human to be looking at that to asking questions especially at this stage it might get more sophisticated as you know as you you scale up but you know this is a job that we do in Excel and we are in Excel all the time we have our own models we have our own checks and we're looking at these things line item by line item not making a recommendation on sale because some app triggered an alert but because our model says hey we should reorder this yep it's I remember hearing a comment a long time ago that uh in in this area of the business um a smart person plus Excel is undefeated but at some point you do have to get to an Erp or whatever once your business gets complex enough but for a long time uh yeah Excel or go sheets or whatever a smart person is undefeated that's right what do you want to say Laura yeah my last point is very related to the your point as well Greg and Andrew um I think before we dive into a lot of supply chain um complicated strategies and projects first first line is understanding what your product is um as you've mentioned not all DTC brands have the same strategies and so understanding the category of your product is very important is this perishable do you have shelf life is this um again is this a is this very light and very small type of product is it cheap how do we store it do we need a special storage system for for that is there a um temperature control so understanding all of your um uh the the details of your products is very important for for for us for for operators and supply chain experts so that we can we can tailor fit the strategy and I always share this uh as much as I can if there's a a call uh even though they're not getting our service yet because it's it's very early on I will be sharing I I am sharing strategies that is very easy to follow and um that that's something that that is taor fit for their product for the type of product that they have so like initially you should you should be focusing on the weight the size the uh amount um the the margin um is it um it has shelf life or not how to store it yeah and how to ship it from from one from point A to point B those information is very important so that we can identify if we are better over or better under for that type of product so yeah all right this is great conversation there's a lot I we could do this for a very long time I think because I I I I want to hear all of the little like all the little super specific stories of uh ways you guys have saved for people and for Greg I also want to just like talk big picture strategy a lot because I think there's there's a lot in both of those things but um we are out of time so um Greg um you are on Twitter at Greg Cary I'm uh I will link that in the show notes and then Laura um what about you where do you want to send people from this conversation if they're interested in optimizing their supply chain more you're the person to go do that with where should they go yes that's also my Twitter handle supply chain Lara and my email Lara more now.co okay awesome Lor now.co um reach out to her references podcast if you if you heard it and you wanted to get some conversation going I I just don't know why most people listening to this who are brand owners or even agency folks working with Brands who are seeing these problems and if you're if you're on the agency side and you're seeing a brand incessantly run out of I literally build my campaigns with the expectation that like I'm I'm trying to build them because I know people will run out of stock I build my campaign structure to to to to reflect that because SV are under optimized right so and in fact no matter how optimized they are that's still going to be a problem in Ecommerce businesses but um but the um yeah so uh whether you're seeing that be a persistent issue if you're seeing long lead times for yourself or clients any of those things um I just don't know why you wouldn't at least jump on a call and see hey is there actually an opportunity here or not have the conversation it is going to be within reason price-wise it's not going to be crazy expensive it's another advantage of working with um Laura and her team is that they're going to make it affordable for you and so um yeah so go go check that out uh thanks guys to you both for taking the time and doing this thanks thank you Andrew [Music]