How You Can Scale Your E-Commerce Business Globally?

Shaan Puri

So, a couple of other things I wanted to bring up. One is a pain point, or kind of a business opportunity. Maybe this exists; if it does, tell me because I want to use this service. In e-commerce, most e-commerce brands are just local in their own geography. For example, most U.S. e-commerce brands basically just sell in the U.S. Then it takes time before they start selling in Canada, and then in Europe. But it takes a long time, and the reason it takes a long time is because of international logistics. For instance, if you want to ship something to Canada, they have to pay pretty heavy import duties on the product. So, if you sell a $50 product, they might have to pay an additional $20 in import taxes, along with the shipping costs. It just becomes irresponsible to buy. Still, some customers do because they can only get the product from a U.S.-based company, but it really sucks. Then the company has to fill out a form that states these goods are worth $14, and then you submit that at the customs. It's just annoying, right? I think there should be a company that addresses this issue. There are brands trying to do these e-commerce roll-ups, but I think it should be done differently. I believe some enterprising entrepreneur can say, "Look, I will boot up your Canadian operation today. I'll boot up your UK operation, your France operation. I'll handle Europe, the UK, Australia, whatever." Basically, they would say, "I'll import your brand today; you do no work. All you have to do is ship me this product to this warehouse. Here's the address; ship me your products. I need, you know, whatever your normal inventory is—ship 10% to me and let's see how I do." You would have one giant warehouse where you're warehousing for all the brands you're going to work with. You just say, "Look, in exchange for doing this, you pay me no money. I will start generating sales for you, but I want a royalty. I want a royalty of 10¢ or 15¢ for every dollar that..."

Sam Parr

you make. What like how is this how is this interesting or new

Shaan Puri

Because I don't know of a brand that does this, that exists. You know, my wife has an eCommerce brand. We sell in the U.S. I would love to be making more money by selling in Europe, but the time and operational overhead to go to Europe right now is just crazy. So, why aren't there more people reaching out to eCommerce store owners and basically saying, "I will run your international operation and make it a low-risk to no-risk proposition for them in order to do so"? I think there's a lot of money to be made given the number of eCommerce brands in the U.S. and how you could, if you're in Brazil, or you're in Australia, or you're in Canada, or wherever, become the leading trusted partner. Kind of like, "We are your go-to market plan for Canada," and we just do all the work for you.

Sam Parr

This is actually quite common in media. There's Business Insider India, Business Insider Australia, and Business Insider Germany, I believe. I think the Wall Street Journal does the same thing for those same countries. It's... there is BuzzFeed France, HuffPost France, HuffPost Australia. It's actually pretty common in media, and I...

Shaan Puri

Is it run out of the U.S., or do they hire a team there? Or is it a local team that just licenses the brand, basically?

Sam Parr

When they report the revenue, it's under licensing. I don't exactly know what that means, though, because I was thinking about us. I was like, "Man, we have a lot of people who are English as a second language folks in Germany." So, like, I guess Germany is one of the most populous places in Europe. It's very business-focused. You know, the Germans liked us, same with Australia; Australians loved us. I was like, "Yeah, let's go do it." But what the heck do I do? Do I just fly over there and start recruiting? It's crazy. I would love to partner with someone. Another thing is, in particular, China and Japan. There's actually a whole word for this. There's a word—I can't remember what the word is—but there's a word that describes why it's difficult to break into Japan. The reason is that it's hard to break into an island, particularly Japan. I would love to have paid someone to be like, "Hey, can you be my Japanese consiglieri? Like, my capo on the ground?" Those are all mob terms because I'm into the mafia now. Can you be my guy on the street in Japan and let me know if this is good? Am I getting the right people? I think that's incredibly interesting.

Shaan Puri

Yeah, exactly. So I'm not saying that this doesn't exist. I'm saying there's still a lot of room there because I know a lot of people... I have a lot of friends who are doing e-commerce, right? We host Club LTV, there's about 75 to 100 e-commerce brands each doing over $1,000,000 a year in there. And every single one of them, I think, has the same problem, which is that we're all US-focused. And why are we US-focused? Because it would be too...

Sam Parr

much of a

Shaan Puri

Lift... too much of a lift to go figure out how to do Australia. It's too small of a pie to like do manpower on or spend brainpower on. But if somebody in Australia was like, "Hey, look, this is what we do. This is our business model. We help you get sales here and we just take our cut." So I just think that there needs to be more opportunity for this. And that's cool that in media, it sounds like there's also an opportunity to do it in media too, where it's being done in some way by the big players.

Sam Parr

It's being done in some way, but I remember when BuzzFeed was going through some troubles. They had to lay off like their whole French office, and I was like, "BuzzFeed has a French office? What the fuck?"

Shaan Puri

Well, that's the opposite, right? We have a French office, and then you have to do things like that when it's not working out. I'm saying no investment, no consulting fees. You just take a royalty on sales, and these are all incremental sales that I wasn't getting otherwise. You take care of the whole operational headache. In this case, for e-commerce, it's about shipping your goods to your warehouse, and then you ship it to local customers. Customers don't have to overpay, and they don't have to deal with import duties for every order they make. So, I just think that there's an opportunity in e-commerce to be the go-to brand for every D2C brand to partner with in each of these locales.

Sam Parr

what country would you go to next

Shaan Puri

I think Europe is probably the best because you want the next wealthiest, high-population place. But really, it can work anywhere. It's just that the biggest market is doing it throughout Europe now. Europe is made up of so many countries; maybe that's a pain in the ass. If not, like Canada is the no-brainer, Australia next, and Japan is a good one. Those would be the ones. India, maybe. For example, I know a bunch of people in India who did this. My dad introduced me to these guys, and I was like, "Oh wow, why is this guy's house so humongous? How do they do it?" I was like, "Oh yeah, they partnered with Jockey underwear, and they just became the Jockey seller here. They have exclusive rights to sell Jockey in India." Next guy at the dinner table, "What do you do?" "Oh, we're the Domino's guys in India." "What? Yeah, we're the exclusive franchisee of Domino's for India." Okay, what does that mean? Well, Indians didn't really eat pizza before this, so we're like teaching people to eat pizza. They love it, turns out. And so we have like 9,000 Domino's throughout India now. I was like, "Oh my god, what is going on here?" So, you know, local franchisee but for...

Sam Parr

what's this called what's the termina what's the term for this

Shaan Puri

I don't know. You know, maybe I should have gone to business school. I think it's probably just called "franchising." Franchising was the way to spread geographically. You know, when your brick-and-mortar can only scale so fast, that's how you would do it. You would franchise out, and then the franchise would pay a royalty back to the master franchise of the brand based on their sales. They're the local operator. But with e-commerce or digital media, it's a little bit different. It kind of has the same problem, so I don't know if there's a new word for it.

Sam Parr

Man, I think this is **wildly fascinating**. I didn't think it was that interesting at first, but now I know what you're talking about. I've heard so many stories of the same thing, but maybe not of India. It's like, "I am the official importer of X, Y, and Z."

Shaan Puri

Yeah, we're the distributor of X. Or, like, for your business, right? Could you have sold for more if you had like 250,000, you know, or like 500,000 subscribers in Japan? And like...

Sam Parr

Dude, I think there's a world where I could have made more money in those markets than I did in America. Even though America has more people, I don't think the French or the Germans, I don't think Facebook kicks as much ass over there as it does here with Instagram and everything. So, I think the ad markets... because I do think that Europe—sorry Europeans if you're listening—I do think that you guys are 5 or 10 years behind when it comes to some technology stuff. And the ad markets suck because of Facebook and Google. So, if you could still capture a little bit of that revenue, I think you could.

Shaan Puri

well I I don't know if any of that's true but I what I do know is that

Sam Parr

it's true trust me

Shaan Puri

As you're building, well, I think like everybody uses Facebook everywhere. So that's the part I'm saying I don't know.

Sam Parr

well sorry but what I mean is like old media still does quite well abroad

Shaan Puri

Okay, that's fair. The thing I'm just saying is, if while you were building your U.S. business and all your employees were focused on your U.S. business, if somebody said, "I love your product! I'd love to license the brand from you," or "I'd love to be your partner in the UK, Japan, or Australia, and I will build it. I will use the same playbook. It'll be under your company; I just want my cut for building this for you," because I'm taking it to prevent you, you would have done it in a heartbeat, right? So the fact that you didn't means there was an opportunity for some entrepreneur that should have been reaching out to you, saying, "This is a no-lose proposition. You still own it. You still make money off of it. It's still your name brand. I just get to basically take your brand, take your product, and localize it or distribute it here where I am from, and I know the market."

Sam Parr

yeah and my product's way easier than yours

Shaan Puri

it was

Sam Parr

That's right, because it's pixels. It's not anything real. I would have loved to have done that. I used to have people email me all the time. Then we had a bunch of people in Russia and some people in Mexico who would just verbatim copy our content. I would find it and I'd be like, "You guys, stop this! You're not allowed to do this." Then I'd have other people who would email me and be like, "Hey, can I transfer..."

Shaan Puri

Stop anyone from doing that. I feel like you can't do anything if somebody takes your newsletter and they just word-for-word transcribe it in Russia and they're like, "We're called whatever." How is that hustle? No, there's nothing you could do.

Sam Parr

The only thing that I was able to do... We had someone do this in Italian, we had someone do it in Russian, and we had someone do it in Mexico. Yeah, Mexico. I basically shamed them. I said, "I'm just gonna call you out." So I would tweet at them or I would email them. I would just make it well known, and my network was large enough that someone... someone knew them and they were...

Shaan Puri

knock off

Sam Parr

and they yeah and they stopped doing it but no I didn't do shit

Shaan Puri

you can't do you can't

Sam Parr

Do shit, yeah. And I had people email me all the time saying, "Hey, can I do this for Spain?" And I would say, "Yeah, but I don't really know anything about you. I don't know if you've got good taste. I don't... I know nothing about you." And I would just throw it off to the side and just kind of forget about it.