Episode Summary
In this episode of the Seven Figures and Beyond ecommerce podcast, host Greg Shuey interviews Izzy Rosenzweig, CEO of Portless, a next-generation third-party logistics company that helps brands ship directly from Asian manufacturers to consumers worldwide. Izzy shares his journey from running an e-commerce brand hindered by traditional supply chain bottlenecks to building a $45M business using a direct supply chain model that dramatically improves cash flow and reduces inventory risk. The episode dives into actionable strategies like small-batch manufacturing, tariff deferment, tariff engineering, and working with trade partners to survive and even thrive during supply chain chaos. Izzy emphasizes the importance of freeing up trapped cash in inventory, expanding into international markets like the UK and Australia with lower CPMs and tariffs, and optimizing operational expenses to remain nimble and profitable during uncertain economic times.
Key Takeaways
- Direct-to-Consumer Fulfillment from Asia Boosts Cash Flow: Portless allows brands to bypass warehousing and ship directly from factories, reducing inventory costs and dramatically improving cash flow with faster delivery timelines.
- Tariff Deferment and Engineering Are Game Changers: Brands can defer duties until products are sold and shipped, and potentially reclassify products (e.g., adding felt to shoes) to reduce tariff rates, giving savvy brands a financial edge.
- Small-Batch Manufacturing is Smarter Inventory Management: Producing smaller quantities more frequently allows brands to react to real-time demand, avoid overproduction, and reinvest capital in high-performing SKUs.
- Global Markets Offer Cheaper CAC and Lower Barriers: With high tariffs and CPMs in the U.S., expanding to countries like the UK, Canada, and Australia, where demand is strong and customer acquisition is cheaper, can ease financial strain.
- Partnering with Trade Agents Opens Flexibility: Brands that aren’t large enough for deep factory relationships can benefit from trade partners who manage factory sourcing, quality control, and even financing/payment terms.
Questions To Ask Yourself
- How much of my cash is currently trapped in inventory that isn’t moving?
- Could I restructure my supply chain to reduce lead times and free up working capital?
- Am I taking advantage of tariff deferment or engineering to reduce duty costs?
- What would it look like to test my product in an international market like the UK or Australia this month?
- Am I working directly with factories, or should I leverage a trade partner to unlock better payment terms and production flexibility?
Episode Links
Greg Shuey LinkedIn: https://www.linkedin.com/in/greg-shuey/
Izzy Rosenzweig LinkedIn: https://www.linkedin.com/in/izzy-rosenzweig-13653846/
Porless: https://www.portless.com/
Episode Transcript
Greg Shuey (00:01.196)
Hey everyone, welcome to the seven figures and beyond e-commerce marketing podcasts. I am your host, Greg Shewy, and I created this podcast to help D to C business owners and marketers who are stuck and who are really seeking ways to get out of being stuck and to grow their businesses. Today, my guest is Izzy Rosenzweig. I got that right.
Izzy Rosenzweig (00:27.938)
Perfect.
Greg Shuey (00:29.772)
I only practiced that like a zillion times as I was clicking start recording. So Izzy is the CEO of Portless. And if you have not heard of Portless before, they are a next gen 3PL. And 3PL stands for third party logistics. Did I get that right too?
Izzy Rosenzweig (00:50.648)
Nailing everything right now.
Greg Shuey (00:54.808)
They help consumer product companies like you ship orders directly from manufacturers in China to customers worldwide. And what this does is it helps you cut out warehousing and intermediaries. This model reduces shipping costs, improves cash flow, and minimizes inventory risk through just-in-time fulfillment. This is a very, very timely topic because…
The world is in chaos. Well, maybe not the world, but the United States and direct to consumer companies. We’re in chaos right now, honestly. Like it’s a day doesn’t go by where I don’t talk to someone who is almost on the verge of tears about what’s going on. So you can probably guess that we’re not talking about marketing. You know, we’re, we’re, digging, we’re digging deep today. So tariffs are killing brands.
We’re going to dive into company or into how companies like yours can free up cash flow by keeping inventory levels low, deferring tariffs. Didn’t even know that was a thing. Tariff engineering also didn’t know that that was a thing. I’ve never heard of that before. and so forth. So I’m really hoping that you can find two to three nuggets of wisdom that you can take from this by the end and, execute on in the next week or two to help ease the pressure that you’re feeling. Right.
Wow, that was a long intro. Izzy, thank you so much for being with us today.
Izzy Rosenzweig (02:21.954)
Thank you so much for having me. Very excited.
Greg Shuey (02:24.14)
Yeah, super pumped. Before we get into the meat of our conversation, can you just take a few minutes and share a little bit about your personal story and how you’ve gotten to where you are today?
Izzy Rosenzweig (02:35.902)
Absolutely. So I actually started as a brand. So going back to 2012, I started an e-commerce business. The first two years that business was running it through the traditional supply chain model, which is really, really hard on cashflow that I experienced myself. So I was manufacturing in China and Vietnam and I would put it on a boat and I would always be waiting. So most of my cash, we tied up to the inventory that I’m trying to sell, which is stuck on the wall.
Greg Shuey (03:02.232)
Yep, that’s sitting on the water.
Izzy Rosenzweig (03:04.984)
And they’re just sitting in the container somewhere in the ocean. And another byproduct of it having long delays was I needed to order inventory, not for a month later, for like six months later, for like four to six months later. So I’m doing all these crazy predictions like, hey, how many t-shirts do I need and what colors? And I think blue is going to be the best color of summer. So it’s really hard. Yeah, exactly. And you’re usually wrong. And a TikTok reel comes out and it’s actually orange, right?
Greg Shuey (03:07.639)
Yeah.
Greg Shuey (03:26.2)
Please, hopefully it’s blue.
Izzy Rosenzweig (03:33.272)
But that’s the nature of the game and it’s a really hard game and it was really difficult. So the first two years, we did about 100,000 of revenue the first two years. But then I got very fortunate and I met some early Alibaba executives in 2014. They introduced me to what we call the direct supply chain model. And what that is essentially is instead of putting your product on a boat and waiting and waiting and waiting and having tons of inventory at a time, store the goods in facilities
near the factory. So let’s give an example. If your product is done on May 9th, if I were to put that on a boat, I would be waiting probably to the end of July, early August to get it. Versus, if I use a local facility, that product be ready to be shipped by May 10th or 11th. Two days versus two months. So to the consumer. Correct. Correct. So we moved that model. We moved goods into our facility that we built out.
Greg Shuey (04:21.986)
Ready to ship meaning picked, hacked, and to the end consumer.
Izzy Rosenzweig (04:32.727)
And this way, a customer makes an order, we can pick back, have that order delivered on average six days across continental US. Local experience, the consumer sees USBS scanned in Chicago, delivered in wherever he is, scanned in LA, delivered in San Diego. So consumer gets a local driver, local USBS label or on-track label delivered to their customer’s front door. Normal experience. But as a brand, it opened up everything to us, removed the pain of cash flow.
And essentially for my business, went from, you know, $100,000 to about two and a half million. And then I grew, no outside capital. And I grew that business to about 45 million over the next couple of years, a hundred percent growth year over year. Then what happened was, and we became experts on, on the China side, the air, on the air cargo side, on handing over to last miles, on localizing it. You don’t see, you have no idea it came from any country from, you know, we’ve been in Vietnam and China. You think it’s just from a consumer perspective, it’s local, local labels, local scans, et cetera.
Greg Shuey (05:25.326)
Sure.
Izzy Rosenzweig (05:32.332)
Then if you’re a marketing and I used to a ton of marketing attribution, ad set level, ad level, right? You get pretty granular there. And we spent millions of marketing, but then Apple Privacy FD came around and they said, no, we’re going to mess up our attribution. So we went blind for a while because we were very happy with Meta back then Facebook. And so we started to slow down that business, but we were experts on the supply chain side. And we’ve been doing this for at this point, close to 10 years. So we started doing is we started to
Greg Shuey (05:48.098)
Yeah.
Izzy Rosenzweig (06:02.132)
offer the supply chain side of our services to businesses. And that’s the founding of PoorList. And now we serve as hundreds of American brands. We no longer run a consumer business. are just the logistics arm helping other brands essentially use the same model. Don’t put stuff on a boat. Send it to us. We’ll massively improve your cash flow. You can lower your inventory needs. You can restock within seasons. If you’ve got a product killing it on meta, don’t sell out. Restock when it’s hot.
Greg Shuey (06:08.535)
Got it.
Izzy Rosenzweig (06:31.894)
in the season. That’s what Portland does. And that’s how I got.
Greg Shuey (06:34.926)
That’s amazing. That’s a huge problem that you’ve solved. I’ll bet you find more fulfillment in that than you do in running a brand.
Izzy Rosenzweig (06:42.264)
100 % fulfillment pun intended. So it was, it is, because what happened was, well, the brand, the running the brand, was able to experience a lot of pain what other brands feel. And for me, guess fulfillment in what we do is we can make brands healthier. Like the demand is there, right? There’s, there’s $200 billion of purchases in the United States and even much more, a lot more globally. But so there’ll always be entrepreneurs that will fill demand.
Greg Shuey (06:45.975)
Yeah.
Izzy Rosenzweig (07:11.224)
But that method of fulfilling that demand is extremely painful. It is so hard. But if you can use a model like this where your consumer has the same net result and you could run at a fraction of the cash needed and always free up cash flow, it’s game changing. It just, it takes off burdens off their shoulder and it’s, it feels great.
Greg Shuey (07:26.584)
to
Greg Shuey (07:30.638)
That’s amazing. Well, let’s talk about cashflow issues. mean, a lot of brands are feeling the squeeze right now. What are the most common cashflow issues that you’re seeing amongst six, seven, even eight figure e-comm businesses?
Izzy Rosenzweig (07:46.968)
Yep. It’s interesting. When a company starts a business, usually cash was not the biggest deal because you’re not at scale yet. Right. Like you’re doing 50, 100, 200 K. All right. You’re moving around money. Once you get to, you know, five million, 10 million, 20 million, all of a sudden there’s millions of dollars out the door, mostly in inventory. And what we say is that place is not if you’re not smart about managing inventory, you’re going to have
Greg Shuey (07:53.422)
Yep.
Izzy Rosenzweig (08:16.822)
money stuck, you’re going to have excess inventory. That’s not only bad for your balance sheet, it’s also bad for your P &L and your profit margin. So in this model, you can move to a smaller batch manufacturer where historically maybe you would make 25,000 shirts because you needed six months of inventory. Make 3000 shirts of every color. And then as you’re getting orders, you’re going to realize, the blue t-shirt sucks. It’s the orange one or it’s the yellow one. And this will you’re avoiding excess inventory.
Greg Shuey (08:43.682)
Yeah.
Izzy Rosenzweig (08:46.252)
Yeah, you freed up all that cash because you don’t have 25,000 units per color and you’re investing in the SKUs that matter and you’re getting cash out really quick because you’re investing in two, three weeks later, it’s done and you’re making those POS before you sell out, but you’re getting restocked really quick and therefore you’re you’re having cash in smart places and the best SKUs, the winning SKUs. So that for me is consistently when you’re at that size outside of your day, day, off, of your employees.
Greg Shuey (08:52.642)
Yeah.
Greg Shuey (09:01.474)
Yeah.
Izzy Rosenzweig (09:14.38)
most of the time the money is just sitting in, very often debt inventory. And that is a bad place for money to be.
Greg Shuey (09:18.188)
Yeah, interesting.
That is a bad place. Yep. It should be in your marketing and your, in your demand gen engine. Yeah. Okay. So could you walk us through really the connection between inventory management and cashflow? Like what are the smartest ways brands can reduce inventory without compromising sales? I know we’ve touched on a couple of those already. like running smaller batches and those types of things, but I’ve got to believe that there are a few other things that, know, we’re not thinking of.
Izzy Rosenzweig (09:49.183)
Yes. Thousand percent. So one of the things that I can, I actually start to do this towards the end of when I was building a brand, my business must start to scale. Very often you’ll go to a factor and be like, Hey, I want to make this t-shirt. So again, the portless model, can make much less of it, but let’s just say you’re not on the portless model. have a retail store, so you can’t use portless model. So then the factor will tell you, well, we want 25,000 t-shirts.
Greg Shuey (10:09.582)
Mm-hmm.
Izzy Rosenzweig (10:16.31)
So very often people will say, okay, 25,000 t-shirts, but we have to ask the question why? Why does the factory want 25,000 t-shirts? Like, do they literally have a machine that only makes 25,000 t-shirts? Usually the answer is no. Yeah, exactly. Yeah, it’s like this weird new mechanism. So usually what it’s connected to is raw materials because in order for them to get the best deal in raw materials, they have to buy a certain bulk load to get the course.
Greg Shuey (10:27.278)
Of course they do. That’s I mean, all that machine will do.
Greg Shuey (10:38.136)
Yeah.
Izzy Rosenzweig (10:44.216)
So one of the things that we did really successfully was, hey, most of the value of when I pay you for a t-shirt, let’s say it’s $10, $8 of that is in the labor of making labor, the machines, the putting together the raw materials, not the actual raw material itself. And therefore your lead time, which they say three weeks, two weeks is getting the raw materials. So we’ve had a lot of success saying, hey, Mr. Factory, let’s do this. We’ll lay out the money for the raw materials, $2 on the…
t-shirt. let’s say you’re laying out 20 % of what you’re about to lay out. Allow that image, allow those raw materials to either sit your factory, we’re to be able to pay a little warehousing space for it. And then start producing in a much more agile level. You could get lead time from three weeks to 10 days or even seven days if you lock up the raw materials, which is the reason why they said they need the 25,000 orders. So we did that really successfully in our 100%. And now I would say even more so
Greg Shuey (11:33.856)
interest.
and the factories are okay with that. Wow.
Izzy Rosenzweig (11:41.814)
The factories over the last five years have really started to turn a corner on being more agile and how they produce and how small they produce at time. Two reasons. One, Sheen has taught them that if you get into agile and you’re open to being more small batch based, you find winners fast. When you find winners fast, you don’t make money in the small batch. You might even lose a little bit of or break even. But the winners drive, you your marketing, right? You have a winner in marketing. You have unlimited, you know, it’s a big world out there.
Greg Shuey (11:50.446)
Yeah.
Greg Shuey (12:00.238)
Hmm.
Greg Shuey (12:10.498)
Yep. Yeah.
Izzy Rosenzweig (12:11.772)
you could scale really hard and factories are seeing that, they’re getting it. And I mean, especially with the tariff rules and we’ll talk about that in a minute, but in general, even in China itself, there’s loosening demand. So because they had a real estate bubble there, so factories in general are more agile and be willing to be creative on how to get you what you need.
Greg Shuey (12:16.163)
Yeah.
Greg Shuey (12:33.614)
adapt or die, right? There you go. Cool. That’s brilliant. I think that right there is a huge takeaway for most people who are listening. And I know a number of people I need to send this to today. So yeah, like for sure. Okay. Let’s talk about these two terms that I am completely unfamiliar with. Tariff deferment and tariff engineering.
Izzy Rosenzweig (12:46.328)
Thank
Greg Shuey (12:59.572)
Again, this is legitimately the biggest topic of discussion with prospects that I’m speaking with, with clients that I’m speaking with. walk us through those. What are they and how should a brand take advantage of those?
Izzy Rosenzweig (13:15.64)
Absolutely. So let’s first talk about a brand that doesn’t do any strategy. and, I will, before I start the brands today have two paths to go. They could go the way they’re going before, not optimize, not do anything strategic. They’ll probably go bankrupt. The brands that the entrepreneurs that double click in every strategy and every opportunity, you will gain market share because competitors, if they’re not, it’s not being smart, you’ll do their customers. So, so two paths here.
Greg Shuey (13:20.184)
Okay.
Greg Shuey (13:42.05)
Yeah. Yeah.
Izzy Rosenzweig (13:45.458)
One is let’s talk about a typical brand that is not doing any optimization. They buy a million dollars worth of product from their factory. They put on a boat. Once it gets to the U.S., remember they’re buying four to six months at a time, they need to pull out their checkbook and write a check for north of $1.4 million today. That’s insane. Most brands, it’s bananas. Most brands will either refuse to claim it and then for a split record, they’ll come after you eventually.
Greg Shuey (14:03.822)
Sure. Yep. It is.
Izzy Rosenzweig (14:14.424)
Or you write that check and you’re probably going go bankrupt from cash flow. It’s an impossible place, unfortunately, that brands are put in. Now that is people that are not doing anything smart. Tax deferment in e-commerce at least for portless, we could support you. You don’t need to pay taxes upfront. So you have that million dollars of goods, don’t put it in a boat, put it in our facilities in China, it will sit there. No taxes due. Then you make an order. So let’s say day one you have 10 orders.
Greg Shuey (14:36.386)
Yeah. Yep.
Izzy Rosenzweig (14:41.644)
You only pay the taxes on those 10 orders as they cross the border. Keep in mind, you already collected the money from the customer. get that $10 is sitting in your bank. Those 10 orders, the revenue is sitting in your bank. So now you got the money to pay the taxes. Again, it’s different than, it’s a different P and L play. It’s a balanced play. But that is game-changing. And the brands that are doing this, and this is why, you know, our inbound has been insane lately, because the brands have no choice. Like you got to be smart about the way you’re running this or else you’ll have so much cash.
Greg Shuey (14:57.23)
Yeah.
Izzy Rosenzweig (15:11.8)
in the CBP and the treasury, you won’t be able to your business. So that’s tax deferment. You’ve got to pay your tariff, just don’t pay it day one because that will kill, that will break the bank. tariff engineering. Tariff engineering is actually around for a very long time, but the famous example given many times is Converse shoes. Converse shoes, they add felt to their sole. Over 50%, 51 % of the sole has a little bit of felt. You probably don’t notice it and it rubs off really
But by adding felt to the soul, is legally classified on an HS code level as a slipper. a slip, Yep. Everything is technical, right? If you pass a technical test, your HS code is technically different.
Greg Shuey (15:49.228)
No, really?
Greg Shuey (15:57.454)
Okay, so my converse I’m wearing right now is a slipper. Got it.
Izzy Rosenzweig (16:02.232)
legally. Yes, legally it’s a slipper. It looks like a shoe, feels like a shoe, legally it’s a slipper. And the base tariff is closer to 6 % versus 3%. Again, it’s reciprocal on top of that, but your base is lower. So that is an example of what do you need to change about your product to make it more tax efficient? Now, maybe the answer can’t do anything and that sucks. another example our or trade lawyers gave us was they had a company that started with a microwave.
Greg Shuey (16:07.822)
Okay.
Greg Shuey (16:14.286)
Interesting.
Izzy Rosenzweig (16:31.032)
but then they go a little more sophisticated in that product. And before then it was an air fryer. Well, do an audit because maybe the HS code on the air fryer is lower taxes than a microwave. So A, understanding your HS code, making sure you classify the right to begin with, and then being creative, like, Hey, what do I got to do? Maybe I could take something away. Maybe I could add something, change the blend of the material. So that’s an example where we’re seeing people do that. Yeah.
Greg Shuey (16:44.546)
Yeah.
Greg Shuey (16:54.872)
That is insane. Wow.
Izzy Rosenzweig (16:59.352)
Last other thing I’ll throw in there that we’re seeing brands doing, which is to me shocking. So at Portless, know, we usually, most of our business is US, but we have about 45 % of our business globally. We could take one inventory hub and we can ship it to Australia, we can ship it to Canada, we can ship it to UK, we can ship it to Germany. All five day delivery, five, six day delivery, promotes those markets, localized, we’re all mail, Australia post. We’re seeing American businesses starting to put their ad dollars in global markets. It is easier to do business today.
Greg Shuey (17:27.299)
Yes.
Izzy Rosenzweig (17:29.022)
in Europe than it is in the USA. That’s a wild statement to say.
Greg Shuey (17:30.179)
Yep.
It’s insane. We’ve been having conversations about like Mexico, right? Like building ad campaigns and selling in Mexico. Like it’s, it’s sad. It’s sad that it’s easier to do business outside of the country right now.
Izzy Rosenzweig (17:43.98)
Yeah. It’s sad.
Izzy Rosenzweig (17:49.6)
It’s wild. And we’re seeing entrepreneurs do it. Like, entrepreneurs will adapt to where it has to go. Yeah. So in the marketing side, CPMs are cheaper in the UK. UK has an incredible conversion rate and cheap CPM market and great e-commerce market. So there’s definitely a lot of interesting moves we’re seeing brands do.
Greg Shuey (17:59.662)
100%.
Greg Shuey (18:08.192)
And if you’re, if you have your three PL in China or Vietnam, it doesn’t matter where you’re shipping, you can ship it worldwide. Yep. Wow. Okay. That’s a very interesting thought. Sell outside of the country until this mess is cleaned up. Okay. Cool. So walk us through, like, like what’s the best way for brands to manage and build like the strongest.
Izzy Rosenzweig (18:12.568)
Doesn’t matter. Broke heart.
Greg Shuey (18:37.558)
relationships with their vendors. I mean, you’ve already talked about a couple of them buying inventory on their behalf and storing it, but like, I’ve got to imagine there’s a half a dozen things that they should be doing just to make sure that, you know, they’re locked arm in arm and there is no chance that they’re going to get fired. Right. And it just makes for a positive experience for both parties.
Izzy Rosenzweig (19:01.144)
Yeah. So every brand I talk to, usually have an amazing relationship with their factories. Like they’re really good people, hardworking and constantly driving to make stuff better. So we’ve seen an interesting trend and we are seeing some people move to Vietnam and some people move to India. We have portless Vietnam, we’re opening portless India in Q3. So like we’ll support the transitions, but moving is risky, right? You move to a new factory, the QC, the raw materials, the delay of fabric mills, every…
Greg Shuey (19:28.524)
And it takes forever to find them too. You’ve got to be on site with them and touring facilities. It’s a beast.
Izzy Rosenzweig (19:30.68)
100%. 100%. It’s a beast. So what we are seeing an interesting trend, if you’re big enough, we’re seeing factory owners in China opening up entities in Vietnam and building their factories there. If you’re a big enough customer, because those guys know their business, they know the quality control, they know exactly what needs to produce. There is a ton of Chinese owned factories in Cambodia, in Vietnam, and they’re the one of the best operators. They’re just so good at what they do. They’ve been doing for so long.
Greg Shuey (19:46.508)
What? Wow!
Izzy Rosenzweig (20:00.32)
So if you’re big enough, have that conversation with your factory. Maybe they’re willing to open up and operate in another country. And that’s fine. It’s all about country.
Greg Shuey (20:00.587)
Wow, okay.
Greg Shuey (20:05.422)
What does big enough mean? mean…
Izzy Rosenzweig (20:10.52)
I would say if do north of like 10, 20 million, it might be worth to do it. Like the factory might be worth doing it. If you’re under 10 million, I know if your factory would do that. But it’s conversation to have. The next thing is we’ve seen some really interesting relationships between brands and factories around payment terms. So if you ask very often, it’s like 30 % upfront or six-man front, 40 % on delivery. We’re seeing people with 90-day payment terms. Now I have noticed a lot of those people are doing it through trade partners.
Greg Shuey (20:14.776)
Really? Sure.
Izzy Rosenzweig (20:38.552)
So have trade partners in China that sit between the factory and the consumer. Now, they add value, they might do QC for you, they might do photography for you, they usually add value, but very often factories in the business of making things trade partner to add services and solutions. We’re seeing trade partners being able to work out interesting financing solutions to extend terms. And we’re seeing a lot of interesting results over there as well.
Greg Shuey (21:09.47)
Interesting. So help me understand a trade partner a little bit better. They sit in between the DTC brand and then the factory. I didn’t even know that was a thing. I assumed a lot of brands work directly with the factories. so like what, what. okay.
Izzy Rosenzweig (21:23.958)
Yeah, they’re often they think they do and they’re not. depending on the brand and depending on the relationship with their factories, there is obviously emerging that I paid to the trade partner. Some of them are ridiculously expensive and not worth to use and these work with smaller brands, but the bigger trade partners, take a certain percentage. And but the ad services, so they’ll find like if you work with one factory, maybe you find another factory to diversify yourself. A trade partner finds all the different factories.
Greg Shuey (21:36.216)
Yeah.
Izzy Rosenzweig (21:53.72)
And they’re making sure that everyone’s competitive. You’re in China, offices in China. Yes. They’ll do the QC for you. They’ll do photography and like kind of added services. And those guys, they will work on financing partners in China. So you can have a 60 to 90 day lead time. That is another thing like A, if you don’t ask, you don’t get those conversations. And then B, maybe look for a trade partner to, to.
Greg Shuey (21:55.67)
and they are in China or in Vietnam. And so they have those relationships so that you’re not flying out. Got it.
Greg Shuey (22:07.182)
Yeah.
Greg Shuey (22:17.741)
Yeah.
Izzy Rosenzweig (22:23.032)
That could be a little more creative in how you finance these inventories.
Greg Shuey (22:27.96)
How small is too small of a brand to work with a trade partner, do you think?
Izzy Rosenzweig (22:32.492)
I think there’s different size trade partners for different size brands. My assumption is brand new businesses is harder to find a trade partner or they’re finding like a, basically it’s a contractor that’s like contracting as a trade partner. But usually the larger firms, my assumption is you got to be doing at least a million of revenue. So you’re big enough that you’re
Greg Shuey (22:49.612)
Okay. So not great for startup mode. Unless maybe you’re venture backed and you have deep pockets, right?
Izzy Rosenzweig (22:53.504)
I agree for some.
Izzy Rosenzweig (22:57.782)
Yeah, or your business is big enough. know, you’re very often you start in Alibaba, then you’ll test them. But once you start scaling, then you can get a little deeper in.
Greg Shuey (23:05.25)
Yeah, okay. Well, I’m gonna throw another thought or question in here. I hope I don’t catch too off guard. How does this work with Amazon? I mean, do you work with Amazon sellers?
Izzy Rosenzweig (23:17.144)
So we don’t do FBA. So most Amazon sellers are FBA sellers. mean, why to have the goods in an Amazon facility? We do do FBM. We could do FBM. We could do FBM globally. We do FBM UK, FBM Australia. But we don’t do FBM if that’s like your side business, personally portless, just because we have minimums, right? So we could do FBM. We obviously can’t do FBA because we’re not physically inside an Amazon facility.
Greg Shuey (23:36.654)
Okay.
Greg Shuey (23:42.051)
Yeah.
Izzy Rosenzweig (23:43.906)
But let’s just say if we have your DTC business and a part of that is FPM all the time, we do Walmart, we do Target, we do Macy’s. We’ll deliver in the escalates of these marketplaces and then we can help you actually expand to other countries.
Greg Shuey (23:49.44)
interesting.
Greg Shuey (23:56.362)
Yeah. It really doesn’t matter. You just, you plug in and go, got it. Okay. So in your experience, what are, if you could like pick three, what are the three quick wins that an e-commerce founder can take and implement in the next 30 days? It could be some of the things we’ve already talked about. could be things that maybe you just, you know, haven’t shared yet.
Izzy Rosenzweig (24:23.704)
Yeah. The conversations I have, it’s really about surviving the next couple of months until the trade war settles because trade wars don’t last forever. There’s ready conversations going down. Just optimize wherever you can. So on our end is look at your inventory, try to be really agile through inventory, try to get cash out of your inventory. If your model could fit in a portless model, you might want to check that out. Anything you can to reduce your cash into debt inventory, will free up so you can live another day.
Greg Shuey (24:45.954)
Yep.
Izzy Rosenzweig (24:52.92)
It’s auction business. You need to have auction. Two is look at global markets. It’s time to look at global markets. Like if you’re marketing on Meta, if you’re marketing on Google, it’s a really big world out there. US is really competitive. Now you have high CPMs in the US. You also have high tariffs. Maybe work with your marketing partner and say, hey, can we test on Australia? You don’t have to change a word on your ad. They speak English. Can you test on Canada? I don’t know why you’re in Mexico. We’ve got to do a lot of translation. You got Canada. You got Australia. You got UK, New Zealand. These are
Greg Shuey (24:53.166)
Sure.
Greg Shuey (25:15.608)
Right?
Izzy Rosenzweig (25:22.104)
great markets, cheap CPMs. And once you have a winner, can scale really aggressively. it’s a big world out there. Usually you, most entrepreneurs in the U.S. have a hard time looking outside the U.S. but this should be your time to do that.
Greg Shuey (25:36.376)
love it. I love it. Okay. As we wrap up, this one may be a little bit of a longer answer, but if you were brought in to help a seven figure DTC brand that’s profitable on paper, but tight on cash, which is not uncommon, what is the step-by-step playbook you’d follow in the first 60 days?
Izzy Rosenzweig (26:01.366)
Yeah. First is just look at OpEx. I’m a big fan of globalization. Like how much of your OpEx is needed locally versus not locally. It’s your poor team. You could probably build a team in the Philippines. Your engineers, Brazil has great engineers. So unfortunately it’s…
Greg Shuey (26:16.76)
Marketers like there are global marketers. There is amazing talent in Mexico amazing like you don’t even have to go to the Philippines or India to get Yeah, it’s
Izzy Rosenzweig (26:24.952)
Yeah. It’s a big world out there. It’s just near like, and you know, and I, I’m a big believer in partners too. Like find an agency. Do you need a full-time market behind the desk? Find an agency that could give you that scale without the need to lay out that money. So tighten up the OpEx to as efficient as possible. Then I look at inventory. Where’s most of your money after OpEx? Usually it’s inventory. What can we do for different here? Can we apply raw material strategy? Can we work with a trade partner with the factory? Can negotiate better terms? So
OpEx from a P &L perspective, and then really get good at the balance sheet because most times the balance sheet that put people in the bankruptcy. So reduce the inventory, get more agile with inventory. Those are the two places that would work the whole time. Tightening OpEx and opening up cash through usually inventory.
Greg Shuey (27:12.238)
It’s amazing. It’s amazing. All right, sir. Any final words of wisdom?
Izzy Rosenzweig (27:17.816)
Yeah, just get through the trade wars. We’re almost there. Just hunker down, get to the next two months. And if you can, I think there’s opportunity to gain market share once all this settles.
Greg Shuey (27:20.366)
Just hunker down.
Greg Shuey (27:29.122)
love it. Well, thanks so much, man. I really appreciate your time today. I know our listeners are really going to enjoy this and I know that there’s at least a dozen people I need to send this to as soon as it’s live. So it’s amazing.
Izzy Rosenzweig (27:43.788)
Thank you so much for having me. This was super fun, great conversation.
Greg Shuey (27:46.488)
Thank you. Thank you. And to all those listening, thank you for joining and hope you’re able to join us next week.
Greg is the founder and CEO of Stryde and a seasoned digital marketer who has worked with thousands of businesses, large and small, to generate more revenue via online marketing strategy and execution. Greg has written hundreds of blog posts as well as spoken at many events about online marketing strategy. You can follow Greg on Twitter and connect with him on LinkedIn.
