Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. Joining me as somebody who, uh, who said, you know what?
In Europe selling on Amazon is kind of a pain. And then he got excited about it because he realized that that was the opportunity that he could seize. And when I first met him, I just kept grilling him and saying, well, Amazon has got all this stuff covered. Doesn’t Amazon have warehouses. He goes, yeah, not exactly the way that most sellers need it.
I said, doesn’t Amazon have all these return policies goes. Yeah. But not exactly the way that it’s needed in Europe. I had no idea. I thought that Amazon was at least in retail, that they were all powerful. Today’s guest says no. And he created a business to help fill in the gaps where Amazon can not. Um, his company is called marketplace distri.
His name is Steph van boucle. He is coming to us straight from Tuscany, asked him why? He said, well, who doesn’t want to live in Tuscany? Come on, Andrew. We’re going to find out how you built up this company. Thanks to two phenomenal sponsors. The first we’ll help you host your website, right? It’s called HostGator.
Check him out at hostgator.com/mixergy. And the second said, Andrew, we’d like you to write something to teach people how you’re having these great conversations with, uh, so many entrepreneurs help us have better conversations. I said, all right, I’ll write it. And you guys can get it directly right now.
Free at unbounced.com/mixergy. Steph. Good to have you here, man.
Stef: Thank you, Andrew.
Andrew: Dude. So I don’t understand it. Amazon has warehouses all over Europe. Don’t they? They need you do your sellers need you to have a warehouse.
Stef: Yes. And no, of course Amazon has its own infrastructure, but advantage comes to the complete operation. That’s much more than warehousing as warehousing logistics, customs review management as content management. And there is no such thing as a human being strategy. So
Andrew: I get it. I get, I get reviewed. I’m sorry. I’m going to keep interrupting. Cause I wanna make sure that I get this. I understand review management, Amazon is not going to help a seller get the best reviews on their, uh, on their products. But let’s talk about warehouses. You have actual warehouse houses and Amazon has warehouses, right?
And we’ll, we’ll talk about returns and all and customer service. What’s the difference between the warehouses you have in Europe and the ones that Amazon has. Why would anyone use you?
Stef: Well, for example, only the complexity to ship goods from the U S driver to an Amazon warehouse that often gives a lot of complexity. So products are often rejected at the Amazon mail houses. So we act as a hub, uh, as let’s say, a gateway to, to Europe, and then from our.
Andrew: From, uh, from the U S might have product to ship to Europe. And when it comes into Europe, it gets rejected by Amazon or by customs in Europe,
Stef: Correct both. Uh, but also what is also, the difficulty is more that you buy, you shipped to Germany. You can ultimate also shipped all the other European countries or your shipping apart to Poland, Netherlands, Sweden and Italy, Spain, UK, France. So it’s a big book homes go wide, a big shipment. Uh, so what we act as a sort of hub, so they ship everything to one location and we spread it to all the different locations to give you a little bit of an idea only in Germany, the already 40 Amazon warehouse.
So when you want to create a shipment, often cases, it’s already not one location country, but several. And if you want to work on a European level and. Definitely something I advise on, on the longterm. You’re talking about a lot of different shipping locations, a lot of complexity returns. And of course, a lot of risks because if you’re shipping from there from the U S you’re still responsible until Amazon actually accepted your goods.
Andrew: And then do you decide which Amazon warehouses it goes into in say Germany, for example?
Stef: Well, yes, I noted the panel of the conflict of the client, but for, let’s say country check where we see the new, uh, the new potential, what the star people thing shows. And then we adjust it based on those data to which location needs to be shipped.
Andrew: Wow. All right. I would assume that Amazon does that. You’re doing that, but you’re. Are you ever shipping directly to the customer or only from the, uh, from the seller to Amazon’s warehouses?
Stef: With Amazon FBA because of two prime, uh, solution, that of course is really crucial for the conversion.
Andrew: Okay. One thing returns. What do you do that Amazon’s not handling for your clients?
Stef: Well, in some cases you are able to ship direct to Amazon, but also it’s often mandatory to have a local return address. So I’m of
Andrew: to Amazon, they need to have a local return address.
Stef: Yeah. Yeah,
Andrew: Doesn’t Amazon have a local return address in every
Stef: Well, th th th the band’s also a bit, uh, on, uh, on how the client reacted to this, you, for example, would involve and they decide to ship direct to the client.
They should be happy with that option as well. Next to Amazon is the market leader marketplaces. And also if you want to do business more than one marketplace, it’s mandatory
Andrew: So if you do business with more than one marketplace, you as the seller need to have. Uh, a return location in every country. Got it. And most businesses don’t have it. They don’t want it. They come to you, you handle it for them. This is crazy, already complicated. And we’ve only touched like 5% of what you do.
You told our producer Ari. I love that. It’s this complicated
Stef: Yeah, sure. Yeah, because of the complexity of it goes, that makes my position of course stronger in the future. So I’m also has been for years only active in five countries and the last six months they opened. So it’s not only that the opening two countries, but also you need, for example, the content management also on a local market.
But what we actually do. We have somebody from the Netherlands on, from Poland, actually working in-house, that’s developing the local strategy. So instead of maybe in you, you S you can say, okay, I have one person managing, uh, Amazon, just not because of a side project, but for us, if you want to do business in eight countries, you already need eight people developing the local markets.
So that’s quite a large investment.
Andrew: you mean? Steph is somebody writing the content in local market, not just translating from one language to all the other languages. That’s what you’re talking about. What? Beyond the, beyond the language translation, what else goes into, uh, doing a proper listing that’s countries, countries specific.
Stef: The different currency or the different Fiti levels. So you can just say the sales price is going to be 50 Euro book goals in one country. You get back, you get one six year. So the delivery costs are different, different. The VD is different. The sales fee is different. Currency is different. So you all the ESMO human beings need to do it on a local level also to make sure it’s profitable.
Andrew: Steph, let me ask you something. I buy a lot from Amazon, from Chinese companies that have created great products. Sometimes it just knock off some of the us product, but they have a little bit better, uh, approach to it and definitely a cheaper approach. But I’m hesitant to buy from them because they have like weird grammar.
The periods are in a wrong place. Like all these basic things they don’t have down. How is it that a company can manufacture a battery that you can plug into a wall and also connect to your iPhone, but also your iPad and computer, but they can’t get a fricking sentence written. Right? What is going on?
Stef: Well, that’s actually a, in this kitchen, hold on regular level. So a lot of companies, they say I’m going to outsource it to, uh, to a translator, but the freelance translator often also outsource again to somebody else. So what did the, what the problem is is that when you from Germany and you see that somebody translate that is not a native German, you’re recognized in the same second.
And that directly has an effect on the conversion ratio with also on the reviews, right? You not being taken through shares. Well, I think what is the main important issue building? You want to have a uniform presentation? So what the difference is when you send to 10 or eight different translators, they all write it for the, let’s say knowledge.
But what we don’t actually do as we have an internal team of everybody sitting in the same location, we’ve got a training from the brand and then to gather we develop. So it’s of course a totally different approach. You just outsource it to different locations and then wait, what the results will be.
Andrew: And, you know, what else has he worse?
Stef: And the problem is you don’t know because he can read it, right. If somebody sends its flavors for you and he tells you, it always looks good. Right. But actually a local recognizes when it’s owned by a local one. Yeah.
Andrew: Yeah. I mean like an easy thing for us in the U S to notice is if somebody says $45, but right, 45, then dollar sign, then we know that something is off without even reading your, I just notices. This is, this is off. Um, the, the other thing that always gets me is if I look at the, the answers to the Amazon questions and the answer starts with.
Kind sir, or miss, I feel like this is way off and like they’re, they’re disconnected from us and I shouldn’t because they’re being nice. They’re saying kind, sir, they’re responding to the question is coming from the manufacturer, but it also feels like, well, if you don’t get that right, is there. Uh, maybe I’m being too snobby, but it feels like if you’re not getting the language, downright is the product really there are you really investing enough in us to care about what we need.
All right. So this is your market. This is your business. Go
Stef: in mind that that are just the Q and A’s with ganja, Maddie, when you receive a product and you’re in the UK, in the U S of course everything’s in English. Right. But you cannot send the English packages to the Netherlands or to Sweden or France. Right. So it’s. It’s also quite dangerous when you do not do the translation, you don’t do any translations.
You just hope that the client’s not going to complain because then it’s going to have major effect on the long-term costs. Your
Andrew: do you do that to
Andrew: you? You actually will change the material in each box. Do you need to, I get boxes in the U S that have one of these, like where the instructions are really just seven sentences, but they have them in this origami instruction manual so that they have every single language on the planet.
You really need to create each box, each instruction, each, each presentation for the local country.
Stef: Yeah, because if you’re here for, I mean, everybody thinks that e-commerce is fast business and some things, it is also what actually is long-term you need to build up a brand. So if you want to do with correct, you can better make sure that it’s well done. So in the beginning, it’s a little bit more preparation, but on the longterm, you’ll take it more seriously and then we’ll have effect that clients come back more often.
So yeah, we make sure that everything is okay. Compliant to the local markets to avoid also issues, right? Because you don’t want to have a lawsuit in Denmark or wherever that you already are losing it because you don’t know the local market. So that’s something you want to avoid so better to do it all at once.
Good. And then you’re done.
Andrew: How much money are you making? What’s your revenue say last year 2020.
Stef: Well, I think if I look for the light, we started in 2018 and we are tripling our Matthews lot on a yearly level, on a goal for this year. We’ll be a little bit offer the 10 million.
Andrew: 2021 will be over $10
Andrew: Did you make more than a million in profit last year or is it all going into the business? No. Okay. Um, and no outside investors.
Stef: Um, well, we did actually do an investment rounds last I last year. Uh, so, um, uh, and I’d say we have now up to a million available to invest.
Andrew: you mean you don’t just take it into your, into your bank account. You just have a
Stef: Well we do, we do the phases. No, we haven’t. We do it in phases. So you use it in phases. That’s how it works.
Andrew: All right. Quickly. If anyone out there is still into my conversation styles, I know I’ve interrupted you a lot, Steph, as a, as a European, is it annoying to have me counseling?
Stef: No, I mean, I think it’s good to keep the conversation going. So.
Andrew: Fernanda anyone out there who likes my interview and conversation style wants to see how I do this. Even in private conversations to unbounce.com/mixergy, they encourage me over and Unbounced to create a guide and I’m making it available to you for free. You don’t even have to give an email address, just go to unbalanced.com/mixergy.
Unbounce of course creates these landing pages and they built one for me. Unbounced.com/mixergy. Okay. Um, you’ve came up with this idea because you, in your previous job were working with brands to essentially do this. The difference was what you did before was you built a warehouse for each one of your clients in each country.
You built a customer service team for each client in each country. Am I right about that?
Stef: Yeah, correct. So for the last 10 years, being in developing, uh, infrastructure, to be able to sell direct to the end-user so that the client, the client in the Netherlands would thinking they buy something Netherlands, but also the client experience as it’s with thinking of buying something locally. And, uh, it’s quite a big investment to do such such thing.
And not only from the cost of it, but also to make sure as you complete. The team is aware that we’re going to focus dynamic to the consumer markets. So, um, I of course was good business. A lot of companies understand that the importance of going cross border, because that’s the only way to survive, especially on the long term because the companies that going, uh, cross border create more resources on the longterm, so can actually buy the local markets.
Andrew: the, the, the thing that you did was you said I’m building at this company where you were an employee at, of a company called what is it in intern management. Is that what you did it.
Stef: Yeah. So I worked for as an integral management, I constantly got projects of, let’s say three months to two years where I worked with the management team to discuss, okay, we want to go cross border, always on the European level. What do we need to do? We have customer support that speak seven languages.
Do we have local return addresses? Do we have bank accounts? Do we, can we receive a payment transaction because. And in the us, you have PayPal, you have credit card, but in the Netherlands, you have ideal that you have, for example, in Germany, Ivanka month. So in Africa country, there are different ways that clients pay and that’s something you all need to set up.
So actually you need to have 50 different payment options on the website, but you don’t show them because it’s somebody from the Netherlands, she’s a French payment solution. They are going to think that sounds, that looks not. So that’s what I always said, a utopian solution, but instead of constantly setting up new infrastructure, I’m not offering it as a service.
Andrew: And so you did this, you did this for each company. Each company had their own thing built up just for them. And you said, Hey, wait, why am I constantly repeating myself here and doing it for multiple businesses? How about I just create one company that does this for lots of different businesses. They don’t need to hire their own translators.
We have them in-house we do this as a service. You, uh, when you were working in, uh, is the name of the company, inter management. Am I getting right?
Stef: Oh, well, the company I work always as a freelancer under the company
Andrew: Got it.
Stef: and 2018, I set up the company. Mark is this tree. So we act as a district boots. So they’re creating a traditional B2B transaction actually be saved. We are distributed. Of course, we have to complete infrastructure set up, including content management, review management, marketing campaigns, et cetera.
That of course is not common for a distributor, but that makes this, let’s say distribute to 2.0 for the manufacturers that we work with.
Andrew: All right. The whole process of building up this business, because I want to understand how you can create something in multiple countries that then services your clients in multiple countries. How you getting clients in multiple countries. But let me just get what you did before. Just for a little bit of context.
You told me before we got started, that bef when you were doing this for, for businesses, you worked with a mobile accessories company. I’m guessing you can’t give me the brand. Am I right?
Stef: Sure sure. It was a company in a docking station. It was a German company that was fairly successful in Germany. So they had a successful web shop and was standing in Germany. So once when I saw actually the product I directly knew, okay, this product has potential outside Germany,
Andrew: out to them and you said, Hey, hire me. I will make sure you’re set up in all countries in the European union or many of them. Got it.
Stef: Correct. So that was directly, let’s see, how far are they right now with the operation? I mean, how does the delivery contracts look like? So it, for example, probably in the, in the U S you can go to DHL and organize a delivery contract, but because in Europe you are doing a lot of different countries and many cases you have to work with a local delivery company.
Uh, the, uh, the contract. So you check, what do they have organized right now? What needs to be done to make sure you have a good service level, but also for example, returns. So returns sounds like something easy, but can you imagine that, for example, you should do somebody in France, they ring the door once or twice, and then they ship it back.
To Germany then before the product arrived is probably is going back, are talking about QB delay while the client is sending of course emails that they never received.
Andrew: And that’s the way it was when it was coming directly from Germany, they hired you because they wanted to set up a distribution. And in multiple countries, you did this. Give me, give me some of the pain in the neck, parts of this process that you created for one client so that I understand how tough it was back then and how this new approach at marketplace distri is, is simpler.
So what did you have to do? That was so difficult.
Stef: I mean, I think it’s, you’re talking about so many different possible operation. You’re talking about what I already mentioned. Your customers, local marketing. If payments, you have returns, you have all kinds of different operations. So you have to then set it. The operations side on contracts, hire new people, et cetera.
And of course, quite complex to hire a seven customer support managers. Um, so what, what does the main big difference is that we say, okay, we offer it as a service. So we already have that complete infrastructure.
Andrew: Oh, I get it. I was hoping for maybe some examples of something that was especially difficult. Maybe a story about
Stef: Oh, I think, well, the thing that I will returns and folks, I think Scandinavia is really interesting. So, uh, so when you want to ship to Scandinavia and don’t have good delivery contract, that means that the post office can be home of kilometers from there, hold the house because of course, nobody, you know, there’s a big contract with only 7 million people, for example, So you can imagine that when you were not home and they say your product will ship to the newest post office, they have to drive home that is causing issues.
So the client says, I want to get my money back and you are mandatory to pay the money back
Andrew: Meaning the client does not want to go to the post office to pick it up because it’s still a long drive just
Stef: It’s homeless kilometer. Right? So what the issue is that you pay in clients and budget is still in that post office. So before you actually get it back, if you have another back, you are having a big cashflow issue.
So, uh, and that to manage. And for example, 10 different countries with different laws. Uh, for example, in Denmark, it was the case. If the product didn’t arrive within two weeks, you have to already pay the client back. So you don’t know where the product is. The client says they didn’t receive it.
Andrew: Would you solve this for the, say the mobile accessories company when you were building it just for them, how did you solve some of these problems?
Stef: Bye. If you want to do business with Scandinavia, for the logistical part, you were talking to a ping. If you want to do best spit, uh, with France you were doing with French post or with Royal mail or
Andrew: Aiding these relationships for them with each carrier in each country.
Stef: correct? Yes.
Andrew: right. I see it. So now I can see how you’re looking at your, at your life. And you’re saying, look, this is repeated. I think we could do this once and apply it and deploy it multiple times of multiple companies. I’m going out and creating a brand new business.
It’s going to be called marketplace district. And then you need, I’m assuming to pick one country that you’re going to go into first and then get a client to work with that. No, you decided I’m going to go from multiple countries. How many countries did you say you wanted to go for.
Stef: So we are all doing business in all the countries
Andrew: take it back to the beginning. The very first one right now it’s eight countries that you’re working with, but in the very beginning, you’re about to launch. Did you say I’m going to work with all five countries that Amazon was with? Or did you say I’m going to pick, you said all the way five and so you needed a warehouse in each one of five countries.
Stef: No. So what, what, what it’s really important is that you want to focus, your budgets are limited. So you want to focus on the, on the market that brings the most value. So to actually gather the right data, you need to be able to do some research, right? So we always say that start on a UNP level and then focus the purchase from the countries with the most potential.
So on that way, we get a shorter funnel. Get actually some return of investment and then used the rest of the return of investment, the launch to countries that are not that successful
Stef: So we always go on a European level. I always advise it
Andrew: from the very, wait, let me see if I understand this. I’m trying to understand how you built it. So the very beginning you said I’m going to go and buy a warehouse in each of five countries and set it up. Am I right?
Stef: No. So the yes or no. So yes, directly the complete infrastructure is set up on the customer, the marketing
Andrew: but take me back. Take me back to the very beginning. When we talking about today, I’m impressed and I’m amazed, but I want to know how you got to today. I want to know the first
Stef: So I think coupon coupon was a daily deal site that was, uh, every 24 hours. You had a new deal. And so I just had a lot of companies that wanted to sell through Groupon. I sat at that operation. So then you were talking to Groupon about I’m successful in Germany. Also wants to be launched in Norway, for example.
Andrew: so this is two, this is 2018. You go to Groupon, they become your first cousin.
Stef: 2011. Uh, I started working with Google for approximately four years
Andrew: I’m sorry, Steph. I’m sorry. I want to go to you start marketplace district. Every time I ask you, what’s the first step you take you say no, we have to go and have all eight countries. I get it. What you’re telling me about group on this happened a long time ago. I want to come back now. 2011. You see you founded marketplace distri in 2018.
Am I right? Okay. Did you day one, say I started the company. We’re a new business quickly. Let’s go and buy five, uh, district distribution centers in five countries. Or did you say I’m going to start with one country?
Stef: uh, well, uh, I think in the first month I did business in the Netherlands and I’m taking that month. I was doing business over in four countries. But not having a local warehouse. Yeah. But for example, having the local shipments in order. So what you often do, you outsource a past operation such as, for example, the return address, but local partners.
So what we, what you create is a sort of scalable, flexible, also cost friendly operation to make sure you don’t have too much study costs in countries that are not too promising on the long term.
Andrew: So the first thing you did was you found partnerships in the countries that you wanted to work with so that you could get this done. It’s not the most cost efficient. It’s not the approach. It gives you the most control, but it’s the one that gets you going without a lot of financial investment. Now that you had this, what did, uh, how’d you get your first customer?
Stef: Oh, I got a minute. And back in 2011, 2018.
Andrew: 2018, we’re going through how you build marketplace district to
Stef: Okay, well, um, I think it’s really just what I still do. I still, they pick up the phone. So if I see a product that has potential, so we both, what a lot of companies maybe think when you sell something in the knowledge also automatically sell it in Germany or France or whatever, but that’s not the case.
So the a lot of local market leaders, but not ump. And so I check if a pilot is successful, for example, in the Netherlands or Germany, I see that also being solved, for example, in France and the UK. And I pick up the phone and I say, I think you’re losing potential by not going on the ump level.
Andrew: And this was you picking the clients that you wanted to have calling them up, you personally cold calling them and telling them what you could do, the opportunity that they’re missing by not doing it. Do you remember who the first class customer was and what they sold?
Stef: Uh, I think the, the first company also, uh, as a, as a German company that sells a doctor doctors brief cases. So beef cases that voters use van, they go to, uh, visits to the patients.
Andrew: Why would they the first ones? Why do you think they said yes to you?
Stef: The goals, a product with a high value, uh, good reviews, that content. So I knew that there was a margin to make for them. Uh, so I mean, that was, let’s say the combination of it all.
Andrew: Good product. Good reviews, bad content. And you said, I think I could take this. They were already in other countries or you said, I
Stef: No, no. The only.
Stef: Right. So, and that’s why I like those niche markets because selling doctors briefcases. Right. Um, so that, that for me, is that direct. Okay. A good moment to see, okay. That product has potential issue. For example, I’ve, uh, you want to launch for the mobile, uh, the case there are literally in every marketplace, it’s a hundred thousand different cases.
So it’s much more, uh, big, if you want to be important. Page one, it’s more from a statistical point of view. Do your investments into sponsored campaigns. Um, and you have a smaller market that has less competition that without too much loss investment, you can still more easily rise up into the top of the pages.
Andrew: The first big result that you were able to get for your first client? The one that was selling briefcases for doctors, where did that come from? From changing the copy on their pages from getting them in another, in another country where
Stef: Variations of the, I think that the big thing.
Andrew: a bunch of different things that you did
Stef: Yeah, well, no, so, no, I mean, there was one case in for example, a different fab, eight different colors. So what they created was actually eight different pages, but what happens is people go to a product page and don’t like the color they go back and see all the competition.
So by simply offering the same variation, same page. That directly has an effect on the seals of gold by adding public pictures and bullet points, et cetera. So let’s say the basic optimization internet, we call that basic plus optimization that directly created a massive results. If you look at, for example, at 2020, uh, the average growth that our suppliers had was 99%, 14%, one 99.
Or where the biggest one has over 400%. And that was a brand that’s been selling on Amazon for over 10 years already.
Andrew: And so did you get paid a percentage of the increase that you got them in sales or, or
Stef: So our business model is 10% of the excluding VAT, a bit, a minimum of 2000,
Andrew: But 10% of the increase in sales or 10% of the
Stef: the revenue,
Andrew: 10% of the S got it. And so they had to trust that you are going to lift their revenue enough for the 10% to be significant, to be.
Stef: We signed four months contracts. So, and in the four months you’ve got a performance report showing what we did and the case they’re not satisfied. You know, they lost four months in a worst case scenario. They paid us 2000 Euro per month. So they lost 8,000, but only all the aunts so far, nobody, nobody creates because we are doing better than, uh, than the markets.
Andrew: Okay. I think this makes sense by the way, my second sponsor is HostGator. I like to talk in these ads for HostGator about how people can learn, use what they learn in these interviews to go and start a business and get a host Gator website to promote the business. I think I’ve come up with a basic idea.
You tell me what you think of this. Imagine someone’s listening. It does. It goes, I’m bothered by these fricking companies that sell on in the U S they’re there. Their content is crappy. Their customer responses are just nonsensical, but they’re trying hard. What if they create just a copywriting service for Amazon and they sell it to these products that are selling well, have good reviews, but their responses are not very clear.
So imagine what they do is they say I’m going to go through Amazon. I’m going to find the highest rated batteries. I’m gonna find the highest rate of Dr. Briefcase briefcases, and I’m going to go through them and et cetera, and I’m going to go through them and look to see who’s not writing grammatically, correct.
Who’s not presenting themselves well. And then I’ll contact the seller and say, I think I can increase your sales by improving your copy. In fact, I created this mock-up of what I could do for you by just editing an Amazon page. You know, you just use the tools that are built into your web browser to edit the page and make it look nice.
Right? The dev tools. And then you say, hire me as a service. I will do this. And then as the business scales and you get more and more clients, you start passing the work on onto copywriters. And since you need it, the website in order to promote this, cause people don’t know who you are. They’re going to go Google you.
They’re going to go look for a webpage to sense that you’re real and see what you’ve done before and who you are. You go to HostGator and you get a host, a hosting package to host your website. What do you think of that service staff? Do you think that would work in the U S. Copywriting on Amazon pages to these businesses that don’t know how to express themselves?
Stef: On the percent and I’ll explain you why. I think every minute are companies that said I want to sell on Amazon. So I think I read an article today that the already 6 million company selling on Amazon, but the majority sheet as a side project and a big part, all line of course, is about contents. So a lot of manufacturers just copy paste.
The catalog for big part is just technical specifications. But as an online reader, you don’t want to be the specifications. You want to read the solution offering. So surely there’s a big market. And if you are a little bit creative and also have the right tools to do keyword research, then already that’s a big benefit.
The cost is going to definitely make a big difference on perversion ratio. What kind of effect on the product page ranking and politics ranking also is important to make sure that you get more traffic.
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So all the different colors of the, of the, of the briefcase are put on a same page, et cetera. What’s the next big thing you were able to do for this one company? That’s all briefcases.
Stef: Simply because the company was only selling in Germany by opening five new countries. So Germany is causes a big market. Also the biggest market in Europe, but it’s of course not like us 300 million. So if you want to reach 200 million consumers, you need to open a five for the countries. So that that’s actually what we do.
So what’s a good way to scale without too much product development is actually entering new markets. So being able to be sold on the ump level, of course, uh, has a, a big opportunity for growing your shell. So quite dramatically, and I’m not talking about a 10% increase, but meaning opening new countries in some case, uh, quadrupling the, the market potential.
Andrew: And again, in the beginning, you didn’t have to have a warehouse in every place. You just had to have a good system and good relationships. And the system you told our producer came from working a decade, plus doing this for other businesses. You already had what you called. I think you used the word playbook.
You had a set of processes in place for doing this. Am I right?
Stef: Correct. And the after 10 years, you know, a little bit how to shut up an efficient, uh, operation on a European level. So, yeah, so I mean, it just, it’s, it’s gathering a little of information and experience over the wall because what is really, uh, The thing that you want to avoid then selling to consumers, of course, that the average basket value is maybe a hundred or 200 euros, but your margin will also much lower.
So for viable cost is something you want to avoid because that’s going to eat up your margin and also you cannot plan as really good. So it’s good to have that experience in the stand, how you calculate pricing. For example, I mean, in Sweden, they also 25% Eva and France. Awesome. 90% fee. So, uh, and you also need to do on local level, on country level to VT filing.
So that is all.
Andrew: This is Europe would drive me fricking nuts. You talking about there’s like this much tax here. There’s this much tax there. And Amazon doesn’t handle all that for their, for their retailers.
Stef: No, no, that’s something you’re responsible for yourself. So you have to set up your own Africans. You need to have, continue to do the feed defiling. And of course, we don’t want to take any risk on that because one is going to be blocked in a country. Uh, so that’s a, that’s a bit of a complex thing to do shut up.
But once is set up, you also have a big advantage because like I said, that ump and leader, so competence actually go on a ump levels, especially on the longterm. You’re creating more resources, also more reviews becoming you, definitely on the long-term a much stronger partner and the chance of growing to become a margarita.
Andrew: sir, that you had conversations with your customers. You are starting to see that the biggest question that they were coming up with. With is how much is this going to cost me? But you realize that it’s, that there’s more psychology behind it, that they’re not that they’re expressing in that question, a different need.
What was it that they were looking for when they were trying to decide whether to work with you, Steph, what was it that you were picking up on that they didn’t even know how to articulate?
Stef: I’m not sure if I
Andrew: maybe this is what Ari was able to pick up on from your, from her conversation with you, that they would ask you what is the cost, but what they really wanted was reassurance. They were, they didn’t want to say reassure me that your infrastructure is organized, reassure me that this is safe, reassure me that this is cost-effective
Stef: And in general, people don’t want to hear how complex it is. They want to understand the market opportunity and they want to understand of course the strategy behind it and the approach. But you want to avoid too much detailed conversations about how we’re going to do it. So we avoid the details.
Of course, we can answer any question, but it’s more from okay. Where I today. Let’s have a let’s evaluate what we can do with the current fundament and what we need to be able to, for example, launch. So what you present is let’s say an instore and we look at where we are. You make the steps in between, and often because we are responsible for the majority of that operation.
Um, it becomes also for them a less complicated thing to say yes to, because if you, for example, have to involve all the different departments to, to set this up, then you need to talk for example, to the management team to get them, uh, let’s say convinced also to, to impasse into, uh, into the market. So what calls we just offer a B2B transaction?
That makes the decision often, much, much more doable and therefore with quick results for both parties, because like I said, you don’t want, you want to avoid too much complications or how we, for example, defining on country level,
Andrew: I imagine that at some point you want to maybe give them a list of all the things that you do just to make them sense how overwhelming it is and say, okay, enough stuff you handle it. We’ll see
Stef: I’ll tell you, I’ll tell you almost all the clients that say, no, we want to do it ourself. We always, we always smiling a bit. Okay. Let’s call them back in six months. So only this week we have, for example, Eastern Europe. So going to do well, it’s a little bit more complex than we anticipated. So what can, what can we do?
Because it’s not, it’s not a side project. You really shouldn’t see the biggest e-commerce opportunity equals platform as a side project. You need to make sure you do it professional.
Andrew: Once you got some customers, you were able to, um, get numbers to bring to future clients. They saw the numbers. They saw that you had a reputation. That’s how the business is starting to snowball. You’re reducing your expenses by, well, not reducing the expenses, but you’re, you’re getting more control of your infrastructure by having warehouses.
Do you have warehouses now in all eight, eight countries that you work in?
Stef: So, no, we don’t have vouchers in countries, but what, how we actually got started and what really made our business really interesting is that we have a really close relationship with Amazon. So we, we grew our catalog to over a hundred thousand products. So we are one of the largest catalog suppliers within Amazon.
And those were also those products that we buying for own risks. So, uh, So it’s really crucial that you’re going to set up a really efficient operation. So, um, what does the big advantage is done when you have shut operation? That those church strong volumes is that when a new company comes in, you don’t have all this thought.
Of course you don’t have high operational costs because you’re trying to run as an efficient operation.
Andrew: Amazon is going to say, Steph, thanks for doing this. We don’t need you anymore. We’re going to do this ourselves. It seems like it’s a natural for them to get into this space.
Stef: Well, yes and no. I mean, of the business already being offered by Amazon. So Amazon prime, for example, customer support, or, uh, for example, creating the manuals or something shows marketing campaigns. That’s not something that Amazon’s going to over two, 3 million centers. That is almost impossible to organize, goes to so much.
I mean, we have on the business and all she talking to a lot of, let’s say smaller companies that do 4 million of Matthew at a big five people. So the person that’s going to invest and to grow in such a market, doesn’t want to just. They say, okay, here is a 2000 per month fix it. No, they actually want to understand what you’re doing to go their brand because often it’s a product that came from the own passion.
So they want to understand that you’re doing it with also their best interests. So there’s a lot of personal, there’s a personal approach when you’re growing the business together. And I’m also as a company where a million people work. Uh, it’s, it’s difficult to build a personal relationship. for the big, the, for the big companies.
Yes. I believe that you can, uh, more organized sustains when you work with Amazon, but the majority of the companies that sell on Amazon are not multinational companies with up to 20 employees, for example. So then, uh, Dan, they prefer to work with a local that knows what they need.
Andrew: But I feel like there are two different parts of your business. One is the marketing side where you’re creating copy. You’re actually interacting with customers. And I understand why Amazon would want the seller or a rep of the seller to do that. But then there’s the mechanics of how do you make sure that you’re getting the right, uh, taxes done in each state and each country?
How do you make sure that, uh, things get delivered directly to the warehouse? You don’t think Amazon, at some point, it’s going to want to take that over you the way you envision it is. They don’t want those logistics getting to Amazon. They want the logistics. Once it’s an Amazon’s control, they don’t want to deal with anything until they have complete possession.
Stef: I think of course, bot to outsource a part of your, your options to Amazon. But if you look for example, last year, that was only active for I think, six months and then it was full. So it was paused for reading line, not saying, uh, but I think what the major thing is is that as soon as you import a product, your town is responsible for that product.
So if you don’t have a hope. And Europe, then I’m also taking a lot of risk by receiving the direct from, from America. And I think that’s something that they want to avoid. And in many cases, uh, surely they, the options for the larger companies to set up a relationship with Amazon, but more than they talk with the large seller database that Amazon has, because you need.
Do a compliance check on each product to ensure that there is less risk, right? So you don’t want to have a product that in five years later is going to cause that houses are burning down as a really good case scenario. Uh, so I think there’s a lot involved that any legal department wants to avoid as much as possible.
Andrew: Do you think that a large part of your business is going to go off Amazon in the next say five years? Where do you see e-commerce going in Europe?
Stef: Well, so today our main focus is Amazon, but, uh, to be able to work on a ump novel Africa country, the arts in three major marketplaces. So for example, in Germany, it’s 50% of the market, but in the Netherlands. Just 20% of the market and the other marketplaces, for example. So, uh, what we will be ensuring is that every brand is going to do business with the top three marketplaces in a crunch. And that is the only way on the longterm to let’s say position
Andrew: Is it mostly marketplaces or are standalone shops using Shopify or WooCommerce and platforms like that?
Andrew: percent. Why marketplaces? That’s
Stef: Because marketplace is just a majority of the sales being made. That’s the biggest growth market you want to, if you’re going to work with 10 different rep shops per country, it’s going to be a complex thing because also the contract terms are different. Sometimes they have up to six months return, uh, agreements.
So then again, you have a reliable cost and that’s something you, again, trying to avoid. So everybody knows everyone making money and if yes, how much without too much prices, but in general, it’s the biggest opportunity.
Andrew: what do you make of this place on by? I’ve been talking to the founder of CAS patent. He supposed to do an interview here, but every time we have the interview scheduled and he’s done a ton of work to prepare for the interview. But every time the interview is actually scheduled, something happens.
Whereas business just keeps growing. Is this BS, is this real? What do you make of this on by marketplace?
Stef: Yeah, I’m falling on by with a little bit, one of the fastest growing marketplaces in the UK. I think they’ll do like 600% year by year for the last four years. So, and that’s actually quite interesting that such a new marketplace is able to create a position in the market that Amazon is so much present.
So no, that is definitely a marketplace to, to be focusing
Andrew: why are they doing so well? Why is on by suddenly taking on so many customers and getting sales?
Stef: I think also, if you look, for example, in the Netherlands wise, bolt comes from successful ethicacy, the local approach, it’s the local feeling that you are stimulating the local markets, high chefs level again. And, uh, I mean, customer support also has as a big, big impact. So especially when you look for example, on Amazon mobile Shana’s and salads doing the customer support as we.
Discussed and not everybody who applies for the implant for our solution, or if you don’t have a company that is more focused on that, uh, than I see opportunity for growth.
Andrew: So it’s, it’s just another marketplace. I think. Um, they don’t have their own warehouse with on by, right. And in most countries, they don’t, it’s more like an eBay from what I understand where individual sellers are selling new products largely. Right. And the reason that they’re taking on more customers.
Is because they’re more local than Amazon and that’s why is doing well. In other marketplaces throughout Europe are doing well.
Stef: I think that is making the customer’s family loyal, uh, to, to, uh, to search the industry local experience and the high customer support that that’s of course different. I mean, I often discuss about, uh, about what well e-commerce door. So in the beginning, when you had a shop and, uh, and that was, for example, a competitor was home made the sign, the same product.
That was more the issue. Then the web shop came and they started attracting customers from all over every local shop. So that was a big impact by, by retail, but by e-commerce. But the good thing is, is that the revenues and also the taxes and the staff within the UK, for example, but now you have a larger, uh, cross-border e-commerce companies that are having the staff outside the country and are not paying any taxes.
So that of course is double the loss for a company by not having tacit, but also losing of course, the jobs. So I think if companies marketplaces can stimulate that more. That’s great. It’s just sort of loyalty to make sure that you buy it from a local marketplace.
Andrew: What about this? Your clients are selling to different marketplaces. We’ve been talking about brand and loyalty. Most people have loyalty to the marketplace that they buy from not to the store. How does not to the seller? How does sellers that you’ve worked with create a connection to their customers that makes them want to come back and buy from the product?
Not just from the next rando that they find on the marketplace when they do a search.
Stef: Good. Good, good point. So a big part of the customer experience is based on logistics, how quickly she’s going to be returned. So at that part, I’m also very well, uh, but. If what is really important is that the description of the product actually is exactly what you’re getting. So you mean you can’t make the story too beautiful.
So what you’re actually creating is a brand story with good quality expectations, and that gets people to come back. Again, to buy at the, your brands, but also keep in mind, for example, in the, in Germany, 50% of the e-commerce revenue goes to Amazon, but 65% of the product search on Amazon. So a lot of cases, Amazon is being used as the hub to find the product, but once they actually found the product, you see often that the buyer wants to buy locally or direct from the retailer.
So it’s, uh, That’s definitely an interesting thing to keep in mind.
Andrew: But you haven’t found any way of bringing people back once they do buy from a marketplace of building some kind of loyalty or connection, it doesn’t seem like I have that’s why many stores just go to their own, their own storefront, the WooCommerce to Shopify, et cetera. Right? That is that’s the challenge.
That’s a big challenge. All right, by the way, I’m going to close this out with this one observation that I made about you, you are moving around. So fricking much while we’re talking in this interview, I move around usually too. It’s the fact that I’ve been doing these interviews that I’ve learned. Is this a thing with you?
Like, are you someone who just needs to keep moving?
Stef: Um, yeah, I don’t know. I actually got, I heard that once before a couple of months ago, but, uh, that’s, that’s true. Also, maybe how I’m sitting, I’m actually not sitting straight in front of the camera that
Andrew: I heard one of the problems you had was you are hard worker growing up, but you weren’t a good student because your mind was always wandering. Was it like a mind and body can’t sit, still has to do too much type of situation you got.
Stef: No, I think in general, a lot of entrepreneurs, it’s a really natural feeling that you urge that you want to do something for, for yourself. And so then you want to folks exactly what you have in mind and all the rest is bullshit. So I think that that makes me really good students when it goes outside my own business.
Andrew: Saying there were things growing up that you saw in school and you said that’s BS. I do not want to study that. And your mind just wouldn’t focus on it. Got it. And to this day, do you still do that? Are there things that just don’t matter that you supposed to care about? They go that’s BS I’ll deal with it later.
Stef: Well, I actually had evaluation meetings this week, also with our operational head of operations, Eleanor about steaming and, um, and that’s one of my things that I’m actually really a focused guy, but then I find it less interesting. I don’t really go too much into detail. So then I make sure somebody else is doing
Andrew: is, what’s a natural part of business that you’ve said it’s not where my mind is going to focus. I got to pass this on to someone else, even though I should be handling it.
Stef: Uh, I think what I hate is, for example, when you focus on importing products and there’s a lot of documents involved and sometimes they’ll come in and buy. Whatever. So then you really need to focus on which party made the mistake, how to get them in. And then I just say fix it. And of course I give some input how we did it in the past in general, if I let people do it themselves, that also would be nice.
Andrew: Right. Who wants to sell in Europe? It feels like you’re the company to go to. And the place to go is marketplace. Right? Distri.com. Of course, we’ll link it up here in the show notes. I want to thank you for doing this interview and thank you to sponsors who made this interview happen the first, if you still like my conversation style and you want to apply some of it to your daily conversations, there is a free guide available.
No email address, no nothing, no shenanigans. All you have to do is go to unbalanced.com/mixergy. I really do wish that they would have collected email addresses, but. It’s all on them. They do it however they want. They’re paying for the ad. They get to control it. unbounced.com/mixergy. I did control the writing.
I wrote it all myself and I also want to thank the host HostGator sponsor. If you need a hosting package for your new business or don’t like your current hosting package, go to hostgator.com/mixergy. Steph, thanks so much for doing this interview. Go enjoy Tuscany.
Stef: Andrew. Thank you very much. Appreciate it.
Andrew: Right on. Bye. Bye. Everyone.