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Inventory, ad spend, and what it takes to scale a DTC brand with Travis Wright · The Modern Supply Chain

• Izzy Rosenzweig (00:00): You went from around 4 or 5 million to 24 million in a year, that's insane. It's like one P&L. It's digital, there's high focus, rowing the same direction, which I think is a huge lever. Travis Wright (00:09):  In that sort of model, we did that in a year, and we were still running between 18 to 20% profit. Izzy Rosenzweig (00:19): This is The Modern Supply Chain, the show where we break down modern supply chain strategies that help e-commerce brands shift from staying above water to predictably scaling. Today's guest is Travis Wright, the chief product officer at e-commerce equation and the founder of Rita Resort. Travis has an incredible journey. She moved from the US to Australia and climbed from marketing manager to CEO in less than five years, eventually leading the iconic brand Tiger Lily. Now she sits at the intersection of education and execution. At eCommerce Equation, she helps over 2000 brand founders scale profitably. Meanwhile, she's walking the walk by building her own brand at Rita Resort. In this episode, we'll be discussing how e-commerce equation is helping brands scale, the shift from agency dependency to in- house mastery, why the top line revenue may be attract, and the tackle differences between US and Australian e-commerce landscapes. (01:10): Travis, it is great to have you. Thank you so much for being on the Modern Travis Wright (01:12): Supply chain. Wow. Thank you so much, Izzy. Appreciate that epic intro and I'm pumped to be here. Thanks for having me. Izzy Rosenzweig (01:19): Amazing. So let's talk about a little before e-commerce equation. So you work with brands like Ester&Co, Tigerlily, really big brands. How have those roles shaped your perspective on growing e-commerce businesses and I guess more importantly, building profitable brands? Travis Wright (01:33): Such a great question. And I feel very lucky that I had the privilege of working inside two very distinctly different businesses. I mean, they could not be more different than if they actually had set out to build two completely entire businesses and brands, which also is why I found each role fascinating. So first was Esther & Co. And Esther & Co was a women's pure play fashion retailer. Esther was, of course, so it was online only as a pure play. We had a very succinct supply chain and it was local. So we could get stock back within four to six weeks, which is a rarity, but that also was one of the core components of growth. And the stock churn was insane. I mean, at one point our stock churn, we're turning it 16 times a year. And then from there we said that was a little bit too aggressive. (02:24): Let's try to do around eight. Make sure things aren't just barely touching the shelves before they go back out. Let's stock up a little bit more. That was just fascinating. And I think also just the timing of that, having the tailwinds of the pandemic. We went actually from four million to 24 million in a single year. Wow. And I don't know if I'll get to see that again. I hope I do. Obviously I'm working on my own brand. But it's really around just having all the different elements built within the business in a certain way to be able to do that and to capitalize. Not every brand was able to capitalize on those tailwinds. And finally, the team culture at Esther was just such a beautiful culture. Everyone, one team, one dream, we're on the same mission. Everyone was working in unison towards the same goal. (03:06): And that was really incredible. A couple of years later, I become the CEO of Tigerlily and I walk into that business. It was a completely different landscape. So that was not underpinned by a natively digital business. It had retail, wholesale, and online, but online being the weakest channel. You come in as well to a team that were not working in tandem. They were all marching to be to their own drum, doing their own thing, very much so. Had their own grand plans, each department did. And I think outside of that as well, definitely viewed marketing as a cost, not as an investment. And finally, supply chain was extremely long. And to top it all off due to the long supply chain, I would suppose there were big bets that were placed leaving us in a position where stock churn was one time a year. So you could see vastly different landscapes. (04:05): And I'm grateful to have seen both because it gave me extremely differing perspectives in terms of what I believe the right way is to scale a business and also how I believe you can do it at the fastest rate. So yeah, I suppose that maybe that answers your question, but that's the start of the conversation today. Izzy Rosenzweig (04:23): I'll tell you one of the quotes. So my grandfather used to own a factory in Toronto in the 50s and for Travis Wright (04:28): Over Izzy Rosenzweig (04:29): 50 years. And one of the things he used to say, and I quote it often, "Cash is keying inventory's death." And I think to your point, taking big, wrong bets, and it's so hard. If your supply chain's difficult, it's so hard to take those bets, but you have to, got no choice, but that could kill you if it's wrong. But Esther and Coach sound actually really interesting. And just to tap into one thing you said, you went from around four or five million to 24 million in a year. That's insane. That's wild. It was insane. And you were spoken, right? It's like one P&L, it's digital, there's high focus, rowing the same direction, which I think is a huge lever. But even if that was all rolling the same direction, just the supply chain to handle that, can you talk a little bit more? Did they manufacture it locally? (05:10): Is that why they moved so fast? Travis Wright (05:12): Yeah. So in that sort of model, and the other thing I want to say about the model is that we did that in a year and we were still running between 18 to 20% profit. So we were running extremely profitably. The model was with ... We had local suppliers. There is a street here in Sydney where you can go and you can actually view different products and you can buy deeper into those products. And then you can also work with those specific manufacturers and suppliers to generate and create your own styles from there. And this was really such a cool time in fashion. I mean, this is 2014, 2015 when the rise of these sorts of fashion brands were really coming into the market and disrupting the space. And it was due to this in part due to having that really fast supply chain and these suppliers that you could go to and you were working with there. (06:04): So they already had stock on the ground that you could buy into. So you weren't designing every style, you were just designing some of the styles. And then outside of that, if you did want to recut something that they'd already produced, it was very quick because they already had it super dialed. They had the fabric on hand, they had the pattern that they needed to make. They'd already made it before. So then reproducing it back and then they'd air freight it into you, you'd get it within six weeks maximum. And that really changed the game when it came to being able to order small. You could order because you weren't ordering an MOQ, you could test out 20 units, you could test out 30 units, see if your customer liked it. And then from there you could buy deeply into it. In contrast to when I arrived at Tigerlily, MOQ was 300 units of something you'd never put on the market before and what a risk that is. (06:55): Naturally, that's one of the first things we looked to do was to decrease that because at Tigerlily, we designed every single piece. And it's a beautiful sentiment, I would say, where you're a designer brand, and I think that that can be very special and powerful in its own right in terms of building a brand, but you don't want to fall on the other side of the sword, being that you have to order 300 units in efforts to test any one of your designs. So if you can really lower that down, I mean, look, I'd love to start with 50, but we got it down to a hundred and we were a decent sized brand. We were over a $10 million business. And so that was a lot more comfortable though, starting with a hundred versus 300. Izzy Rosenzweig (07:35): This is like my favorite subject ever, by the way. Travis Wright (07:38): Me too. Izzy Rosenzweig (07:39): Yeah. So to me, a thousand percent, we service hundreds of brands across the world, Australia, e-commerce equation, US, everywhere. And shots and goal is key and how fast you can react. And that's where we're seeing the best brands do. And it's interesting you said about like there's base design and you could do small edits. We're seeing fascinating business models come around even in the so- called made to order business, which really the base is there. And you're adding a zipper, you're adding a color button and allows you to be super creative, but in the world of small MOQ, small batch manufacturing, and getting it to market really quick, because you got to test. You only need one winner to go from one to five million on that SKU, on that style. But if you can't take those shots on it, you'll never know. You'll never have the opportunity to pursue these products that change the game for the business. Travis Wright (08:26): Absolutely. And where we got to very quickly at Esther & Co was where 50% of our budget was going towards restocks. So the products that we knew were winners. So the faster you can get there, I believe the faster you're going to be able to propel growth, because then from there, you can spend your marketing dollars on those products that are acquiring customers at an efficient rate versus continuously testing new products that have never seen the light of day. And so we very quickly made that shift. And that shift again in contrast was a lot harder at Tigerlily because when I arrived there, they'd never restock the product. So I said, wow, we have to start over every single season. We have to start over every single month in our ad account and just building the momentum there. So it of course took some time to start shifting that system, which we as rapidly as we could shifted there. (09:13): But again, it does take time to start adopting those principles within your business. But I truly believe that once you do, that's when you can Izzy Rosenzweig (09:22): Catch fire. Not only time to market, but use of capital in the right places. And we actually built a tool at Portless, which is it's sometimes worth making less gross margin if you could have better payment terms or less money in inventory and use that money for marketing. Use that money for testing these shot at bets. But we go down that path forever. So fascinating background. Absolutely love it. So talk about at, I guess, e-commerce equation, they're trying to help founders, I guess, in many different ways. Is there one area that e-commerce equation focuses on to help the brand succeed? Travis Wright (09:52): What a great question. And I think for us, so it's not just one area. So definitely the common misconception in the market is that we help brands scale their ads. That is definitely one of the elements we do, but overall, what we really work to achieve with businesses is driving clarity and control in their ecosystem. And that means through marketing, through their fixed costs, through their variable costs, and that's all through what we call the e-commerce equation. And so the e-commerce equation is a daily snapshot that allows us to see profit every single day within a business. It also allows us to see if any of your cost centers are out of whack. So if you're paying too much for your inventory or if you've got too high of fixed costs. And so we really believe that every business can fall into one of five different bottlenecks and business constraints. (10:40): So we first help businesses identify what their growth constraint is, and then we go from there and help them tackle it. So that's why we work with brands on scaling their ad account to optimizing their website, email and marketing lifecycle, demand planning and cashflow and the cashflow conversion cycle. Love it. That's the one I teach. So if you come along, come along to my session. Yeah. Izzy Rosenzweig (11:05): That is awesome. And I think, and again, as mentioned, I ran an e-commerce brand for eight, nine years before Portless. And I think there was phase one of D2C where it was actually run pretty unhealthy in the sense that there was so much capital. So there's a lot of venture capital coming to the market and they're like, grow, grow, grow at all cost, do the Amazon playbook, just get big and don't worry about profits. And that was a very, I think, painful lesson for, I would think, the first eight, nine, 10 years of D2C where you have Casper and a lot of those equivalents, which were just burning top line. But it sounds like what you guys are doing is like, no, A, it's a great time to start a business. It's really easy, but do it from a profitable foundation. And it's not just marketing. (11:43): It's ops, it's cashflow. It's all the different areas to run a healthy profitable business. Travis Wright (11:48): Absolutely. And it's so important that every single business knows their costs intimately because every business has a different cost structure. And that all comes back to, well, what are your overall fixed costs and how much are you paying for the product and how much are you actually able to sell that product to the market for? And therefore that's what creates your margins. And if you have a phenomenal margin and you have low fixed costs, then some brands are in the position to spend a high amount on advertising. So then you'll see some brands running at a 40 or 50% marketing expense ratio, which isn't right for most brands, I'll say, based on the equations that I've seen, but I see that there's one brand in our ecosystem that is a very cool unicorn and they went from startup, so $0 to multimillion dollars within 18 months. (12:35): And they have a very aggressive scaling philosophy. Now they still are banking profit along the way, even at a 50 or 60% MER, but it all comes back to what their specific equation is for their business. Izzy Rosenzweig (12:46): And I'm assuming high OV, high gross margin, even though today has never been easier to start a brand and you got to have a great product idea, you got to go remarketing and get your product. And usually we've seen brands go to like zero to even 500,000 pretty quick and not much go wrong. But as you go to million and two million, that's when we start seeing things like if you don't get your P&L in order, your balance sheet in order, that's when things start to go wrong. And I'm curious from e-commerce equations perspective, is there the right size where you guys start dealing with brands, where things start to be painful? Or do you start earlier on? Where do you start helping brands in their journey? Travis Wright (13:19): Another great question. You're bringing them hard and fast today, but I love it. I love it. So we have four very different programs within our ecosystem. So we have one program for startups and that helps brands go from zero to $30,000 a month in revenue. Then we have our core offering, which is at $30,000 and that can take brands up to multimillion. But if you really want more support avoiding those pitfalls of growth, then once you hit $100,000 a month and you're doing that consistently, we have a specific program called Accelerate that takes you from 100,000 to a million dollars in revenue in a month. And well, you don't get to a million in one month, but we have had 45 brands get there in one year. So they've gone from doing 100,000 or just low hundred thousands to a million dollars a month in revenue. (14:07): And we had last year, we had 45 brands achieve that through this program. And in the program today, there's about 180. So that's a really high cutthrough rate. It's a high probability that you're going to get there. And it's because what we teach in that program allows you to avoid those pitfalls. And the two common pitfalls when you're making that stretch and you're trying to drive your business to that next level is demand planning and getting your cash potentially stuck in your inventory if you're not making the right buying decisions. So that's one, cash constraints, which typically comes back to demand planning. And the second being a team, the right team infrastructure that's going to help you underpin that new growth and that next wave of growth, especially when you're going from around five to 10 million, but also then 10 to 20 million, you're seeing within that interval as well where you do genuinely need good team around you. (14:57): And I know in the world of AI, we really want to automate as many roles as we can, which you should do. But I think that there is still such an important place for good people in your ecosystem, good, really smart, fast learning individuals that can come in and help support you as a founder because if you try to do it all, that's definitely one of the common pitfalls where you will burn out eventually. And also you want to be able to enjoy the ride and enjoy the journey as a founder. And if you have a great team around you that can carry some of the weight and some of the burden in that next level, one, you'll be able to get there faster, but two, I believe you'll be able to enjoy it more along the way. Izzy Rosenzweig (15:33): It's so fundamental. There's so many people starting brands and scaling quickly, but people have been there before and it is an equation. You get some fundamentals right, no guarantees, but you get the fundamentals right, your chances for success is much higher. So I actually love that, that you broke it down and you focus on the different parts of the journey. Curious on the metric. Again, back in like DDC 1.0, top line GUV was the North Star. Is there a north star you guys look at? Is it EBITDA, free cash flow, or does it really depend on the brand? Travis Wright (16:03): Typically, we're looking at EBITDA. So on a daily and a monthly basis, outside of that as well, we are actively working with brands on cash and we're constantly working with them saying, look back at your cash, make sure you're not making too big of bets when it comes to demand planning, because we don't want on the other side of it. If you're not watching your cash, what we don't want brands to do is go into the pitfall of loans, very aggressive loans. I won't call out any of them specifically today. Izzy Rosenzweig (16:30): It's brutal. They say they give you the cash advance, but the percentage of interest is nuts if you look on a yearly level. Travis Wright (16:38): Yeah, absolutely. So coming back to your original question is you have to look at cash flow, but what we're really optimizing your daily metrics to is daily profit and therefore monthly profit as well. And within this equation, we're looking at your marketing expense. We're looking at your revenue per visit. So understanding, is it your website or is it actually something that's going on in the marketing function and people that you're sending to your website, they're expecting something different. So those are just a couple of the metrics that we're looking at. And this equation, the daily equation allows us to understand, do you and can you scale your ads right now or do you actually need to be working on something else before you scale? Is there a different bottleneck that will get in your way of scaling? Because what we definitely do not do is just tell people to go spend more on ads. (17:29): It's even though we do have merch that says that, but the merch almost should come with an asterisk because that's what we believe and that's truly what we coach is that spend more on ads if you have the green light to scale. And the green light to scale for us means that all of your metrics are pointing in a way that you can actually scale. You've got a strong marketing and efficiency and you are currently already driving a profitable business. And when you do start to scale, that your MER doesn't completely blow out. So that's why we do scale tests, but I suppose that's the long answer to your question. And Izzy Rosenzweig (18:01): In the marketing world, I know that you focus on the cashflow side, but if you nail supply chain and ad agility and your inventory, I think that's such a great foundation. But the marketing side is probably one of the largest spends. And you said in some business even up to 40%, obviously it's a unique business. Do you guys have a strong opinion of in- house versus outside agency? Travis Wright (18:19): Absolutely. This is such a loaded question, but really for us, the core philosophy comes back to founders understanding their metrics through and through. And I do believe that if you have the capacity to have it in- house and you can get ... There's a much larger velocity you can get when it comes to creative testing if you have it in- house and also founders on the tools, knowing their business intimately, knowing every single thing about the inventory and when new stocks going to land, there's just that natural IP that founders hold in their brains when they're running the ad account. They have all of that built into their brain already or potentially their 2IC built into their brain. So that is one of the benefits of running it in- house. Not every founder has the capacity to run it in- house and not every business has the structure to run it in- house in a way that's going to be able to drive the business forward. (19:09): And so that's where I do feel like there can be a time and a place for an agency, but if you are utilizing an agency, what you have to know as a founder is what's happening in an ad account. What are the ad account metrics? Are you able to have educational conversations with the agency? I think what so many founders have done in past and historically in what it's called the old age is where you'd sign on an agency, you'd say, "Here you are, here's 10, $20,000, get me some customers." And how they do it, they had a lot of autonomy and efforts of getting there. A lot of agencies were just looking at ROAS simply in platform, not looking at your overall P&L of a business and just saying, "Oh, I got eight ROAS today, or I got nine ROAS, or I got five ROAS." And that was the metric that they were reporting on. (19:55): Whereas what I really believe, and what we're trying to create e-commerce equation is the new age of founders where they understand all of their metrics intimately. And so no matter what agency or external party they're working with, that they hold the power as a founder. And that is what we're really passionate about. Izzy Rosenzweig (20:11): So at Poor List, one of our values is devil in the details. And if you don't know every detail of what's going on, no matter where you are in the org, things will break. And even if, ideally, to your point, be the marketer, but if you can't at least know every detail behind what they're running, can't agree with that more. And it's one of the largest cost centers and you mess Travis Wright (20:29): Up at 10%, Izzy Rosenzweig (20:30): There's your EBITDA. Travis Wright (20:31): Absolutely. Exactly. And it is so easy to do because if your ads are not running efficiently, Meta and Google and TikTok, any ad platform can be a slot machine. So don't treat them like a slot machine, treat it like a well-oiled machine where you actually are putting money in and you understand what you're going to be getting back out and where it's cause and effect. And then that's where it also comes back to looking at your daily equation and are you able to acquire customers at a profitable rate? It all comes back to that. And I think if you don't have the knowledge, and as you mentioned, devil's in the detail and you're working with an external party, you can't say hand on heart that that's not the way your ad account's behaving. So that's why you really need to understand what's happening in your own ad accounts as a founder. (21:16): And as you can tell, I'm very passionate about that personally as well. Izzy Rosenzweig (21:19): I fully agree. In your background, you did a lot of larger businesses. Now you have a startup from ground up. Any major difference of how you're approaching either tech stack or areas of focus for the business from the ground up that you're doing differently because you saw a larger business have issues or any insights there? Yes. Travis Wright (21:35): So many, Izzy. One, to start, let's go back to our favorite topic, inventory. Izzy Rosenzweig (21:42): Let's do Travis Wright (21:42): It. I negotiated with the suppliers that I just want to start with 30 units. I designed all of my own products and my design team, but I still had only 30 units. The pain point of that is that I sold out of those in the first two months I was live of my best sellers and then now I've had to restock them and they're coming. They're back on their way now today and I will eventually probably put them on pre-order to keep that supply chain tighter. But it's one of those things in the early days and just launching in September, I'd rather run out of stock. That's my personal preference and restock it even if I ran out of stock in a two-month interval and learn. Right now I'm learning at a very rapid rate about the customer. And even though I already know about the market of swim and resortware, I'm learning specifically about how my brand shows up in the marketplace, how customers are perceiving my products, the price point at which they're willing to pay for my products. (22:30): So I'm going through this learning journey and also with no data. So that's the biggest difference. And that is the most humbling part of a startup, is that you have no data in your ecosystem yet. And I remember when I first set up my Meta ad and you couldn't even try a lookalike audience, couldn't test any of that because there was no data to look like against. And so I remember the day, eventually I'm trying out these view content lookalikes. And actually that was a decent audience for me that ... I've obviously been on this interesting journey of trying to get to this point of where I have enough data. So it's this sprint to gain data, I find in the beginning it's you want to do things cautiously and efficiently with your inventory cautiously, tech stack efficiently, and I'll talk through my tech stack, but then on the other side of it as well, you are in this sprint to collect data. (23:21): And I think that's what brands and founders don't understand and might take for granted. If you already are doing a couple hundred thousand in revenue a month or you're doing a million dollars in revenue a month, I mean, put the gas on that pedal because you have so much data that you can build now your business upon. And I really find that going from $0 to a million dollar year or to a $2 million a year is a lot harder than going from a $5 million to a $10 million business. Izzy Rosenzweig (23:52): The foundation. You got to get the foundations right. Travis Wright (23:55): Absolutely. Did you want to talk about my tech stack? Izzy Rosenzweig (23:58): Yeah, I'd love to hear it. Do you take a different approach to tech stack? Travis Wright (24:00): I mean, we are going in lean, Izzy. And I really think that you can these days just because Shopify Chat, which is a free function, you can get that straight in there. You can do Shopify email flows, also very low cost. You can then use companies like Kudosity Burst FMS when it comes to sending out SMSs at a low rate. I really feel like these days you don't need to spend a lot on a tech stack. Outside of that as well, I have a Shopify theme store theme. I did buy that, 400 USD, but I also, I'm always a very, very big advocate. Even when I was formerly at a $20 million business, I bought a theme from the Shopify store and made adjustments to it, spent $1,000 making adjustments to it. If that's not your bottleneck, once you get past, call it, okay, look, if you do get past 30 million or 30 million to 50 million, you realistically would want to look at a headless site and look at speed where you're really hyper focused on those one percenters and your conversion rate. (25:01): But at the point, especially where I'm at today, keep your costs low, invest what you can back into product and into marketing. Izzy Rosenzweig (25:08): And I have to give Shopify credit there. I think while there are other parts of the business might be annoying, but the ability to launch a great, beautiful product and have the foundation of every single part from email messaging to SMS, either it's an app or it's natively built in, it is incredible. Back in my early days of my brand when I launched in 2012, we were built on Magento and I had a whole team, I don't know if you have a Magento experience, but I had a whole team of engineers- Travis Wright (25:36): I avoided Izzy Rosenzweig (25:37): It. Yeah, it is a disaster. And then we had, I think we were paying maybe cost us probably about a million dollars a year at some point just to keep up the infrastructure. And then we moved to Shopify and it's like a joke, it's like a theme and it's beautiful and get it yourself for most of it. So Shopify sounds like is your foundation. It's probably your core RP. It's all your core stuff. Are you testing the AI aspects to Shopify? I know Shopify rolled out and now there's all these apps coming out, they're being generated by vibe coding or whatever it is. Travis Wright (26:07): Yeah. So far I've really just been using Sidekick in some elements to create different elements in the theme, but outside of that, I'm not using it, I'd say so much in Shopify as I am right now in the creative space. So I've started working on building out different creative assets through AI platforms. And that is really the area that I'm testing in right now from an AI perspective that I believe can help my startup business, especially as a startup. And you don't want to continuously spend thousands on shoots every month for content. So two platforms that I've used to create new creative assets to test in the ad account. There's Pumelli by Google Labs and then there's also one of our partners at e-commerce equation is Comera, and they're really incredible in terms of how far they've come with being able to create assets for your ad account or for your website. (27:00): Pomelli will come out straight up with different ad assets and they'll go and inspect your website and they'll actually learn about your business and your brand the way you talk, and then they will create a aesthetically pleasing ad utilizing your product imagery that they just pulled from your website. I have tested different platforms as well like Cudable, but what I've found with Pumelli is that the rate to creation and the amount that I have to input as a user is a lot lower. And I've also been testing out Canva ad creation too, where I think Canva's up to from an AI perspective with making creative, they're going to get there. I'd say it's not a hundred percent there just yet, but what I love about Canva's creative space right now is that you can select different types of ads that you want to make and it will at least give you an idea and an understanding of, okay, here's how you might want a reviews ad to look. (28:00): And then from there, you can make it look a little bit more on brand. So with Canva, I did have to adjust a couple of the elements, but what I liked about it again was it gave me that base foundation of a design from an AI perspective and I put in the product that I wanted to review, it pulled out imagery again, pulled out a review from the website, and then off you go. So I think that Canva is going to get there very, very soon as well. And I'm just super excited about that and super excited about these different platforms because the rate and the velocity at which brands can try out new creative in their ad account is also one of the fundamental aspects to growth. Izzy Rosenzweig (28:39): Yeah. Time to market. We're huge believers in that and everything from supply chain to your creative to everything you're doing. I'm curious, it's funny from our end in Canada, I'm curious if you see the same thing in Australia, we find that entrepreneurs in Canada very often think outside of Canada because Canada's quite small, right? And what's actually uniquely interesting when I work with Canadian founders is that their head of going global happens earlier on in their journey. And something we push all the time that you shouldn't go omnichannel. It's a huge world beyond omnichannel. There's customers around the world. It's a very big world and there's low hanging fruit for your product if you just expand beyond your market. Do you see that in Australia as well, or how do Australian entrepreneurs look at outside Australia? Travis Wright (29:23): Absolutely. I mean, there's some entrepreneurs that I speak to that are at their $20,000 a month journey and they're saying, "Should I go global? Am I ready to go global?" And I say, "Okay, let's get to that at least that $30,000 or $50,000 mark first. Let's get there first." And then you can test new markets and then it's not about just having to stick with one market, it's around what market is driving the most profitability for you? What does your equation for each market come down to? And I think with that in mind, and especially in the Australian market, a lot of founders, for so many of them, it never fit Seals too early. If they already have ... I'd say for me, I know I just mentioned getting to $30,000 because for us, that's really when we feel like you've got a stronger foundation and that's what we've seen so many times through the data is getting to that point in your business where you can do that sustainably. (30:15): And then from there you've proven rock solid market fit in the specific market you've scaled in. And then from there, continuously growing your business, but outside of that, you could start to dabble and look into other markets. And so yes, Australian entrepreneurs are very conscious that there's a whole big world out there and they definitely want to tackle it. And that's why genuinely in about two weeks time we're doing an international expansion strategy refresh. We run this training every year in March because our founders, of course, are going to be looking to the other hemisphere for that summer season. And we know, of course, so many businesses today have their peak season throughout the summer period. And especially for Australian entrepreneurs, the US market is such a tantalizing space. And that was always that next green pasture that they were going to. Naturally though, over the last year, there has been- Some disruption. (31:10): Much more turbulence. Yes. I don't know if anyone noticed, but there's been a lot of disruption. Yeah, it's been a big year. It's been a year of the tariffs. And so because of that, Australian entrepreneurs have had to think very nimbly if they already were in that market. And some of them had to hold off on their appetite for growing into that specific market when all of that was going down. So for them, people were exploring other markets in that certain scenario. But yes, I'd say very big appetite because Australia for them is just the beginning. And as you mentioned, it's much smaller market. Whereas of course, if you can crack the US, then you are off to the races and you are going places that you've never been. Izzy Rosenzweig (31:53): Yeah. And at Portless, we see it both ways. So we have brands in the US, let's say, in the summer apparel business, and they'll launch in Australia and all of a sudden their seasonality, obviously not as big as a market, but they get a 30% bump in our winter versus Australian summer. And what we've seen with Australian brands, at least in the Portless model, you have one inventory hub, you're selling around the world, we're rolling out return solutions. It could be reverse logistics. It could be for the right entrepreneur at the right time, not a 10% increase, but 40, 50, 60% if you're willing to look outside your market. But yeah, I think that is a huge card, a tool in the toolbox when the time is right. Travis Wright (32:33): Definitely. Did you found Portless due to what happened over the last year? I'm really curious around the timing of when Portless came to light, because naturally I see that as a strong solution for what's just happened. But I am curious, got to turn the tables just for a second to hear about when you actually founded Portless. Izzy Rosenzweig (32:51): Yeah. So actually Portless was founded in 2022, so before the chaos. It was running on a model that built for an e-commerce brand I ran for about eight years. So I ran for the first two years of my brand, I ran a traditional model through boats. I was waiting two months, never had cash. Money was always stuck in inventory. I was always just waiting. And we're making enough money to go the next year, but then all the money go out the door. And I'm just waiting barely any cash. And then when we shifted to the Portless model for my brand, we were growing 100% year over year and there was always cash because the turnover so quick, it was small batch manufacturing, lots of bets, doubled down on the right bets, and then scaling. So we've been building this for a while, and then Portless started ... It actually started, I don't know if you ... iOS 14? Travis Wright (33:38): Yes. Izzy Rosenzweig (33:39): IOS 14, Apple's privacy update. So as Travis Wright (33:41): A brand- Yes, yes, yes. Of course. Izzy Rosenzweig (33:43): It was very hard for attribution during that period. And we were doing almost 50 million a year at that point as a brand. But once Apple released their privacy update in 2022, late 21, early 22, marketing was out the window for a year to 18 months. During that period, like, okay, we're really good at supply chain. Let's help other brands be really good supply chain. And that started in May of 2022. Travis Wright (34:10): That's amazing. Izzy Rosenzweig (34:11): Yeah. So it started out with the first kind of curveball, but with the trade war, it allowed people to defer taxes because you're not importing all at once, you could hold it back in country of origin. We have facilities in Vietnam to help people that want to shift there. So yeah, been a journey. Definitely been a journey. Travis Wright (34:26): Yeah. What an incredible journey and how epic as well that you were perfectly poised for when all this happened to help e-commerce brands and founders and you've already built it out. So then this wave came over the last year and what a great solution Portless is for the ... Especially, it already was a great solution and what a great solution it is in today, especially given tariffs and the new landscape. And it's really interesting too around you mentioning iOS 14 and how for you that really shifted you to doubling down on logistics. And it's funny because then when the iOS happened and the iOS change happened for Apple as well, for our founder, for Jay, that's where the equation came into play and that was the answer. He'd been doubled down into marketing and he said, "Okay, this is how we're going to have clarity and this is how we're going to keep scaling." But it's really interesting around what happened for everybody at that point in time and where their brain shifted to think about, okay, what now is the right solution going to be and where can I then help brands in this new world? Izzy Rosenzweig (35:27): Exactly. And I think there was a double hitter then. I think A, the attribution went out the window with a privacy update for a little bit of time and free capital stopped flowing. So there was unlimited free capital in the US and many other markets because of COVID, and before that was venture capital. So at the end of it, what we saw is demand's not going anywhere. People love buying from brands that build stories and have a unique brand, a unique product to sell. But how you service them is fundamentally different from version one. And that's what we believe in. You run great. Demand is there when there's demand that we supply, but how do you run a healthy business, smart equations, hopefully smart supply chain, and really run a healthy business. And we've seen businesses scale. We have multiple business doing north of 50 to 100 million bucks and healthy profitable businesses. (36:15): And that's what I love. DDC 2.0, profitable, healthy. Travis Wright (36:19): Absolutely. What a concept is, but I'm so glad we're here. I'm so glad we've arrived to this concept and this is where founders are working towards today. Izzy Rosenzweig (36:29): Last question. Any predictions for the e-commerce space over the next five years? Either it's AI or e-commerce equation takes over everyone and convinces them of something, anything you could think of over the next five years that will evolve in the e-commerce space. Travis Wright (36:42): Okay. What a great question. And I've got to get my crystal ball out for this. I mean, right now, what a time in AI. It felt like all of 2025, we were talking about AI, but brands and founders and most of the world still weren't exactly sure how to harness it. They started having conversations with ChatGPT or Claude to understand how they could potentially help them, but it wasn't a new system that was now operating your overall business. And now already this year, so we actually just hosted an event where one of the sessions was AI Leaks from the Lab where we showcased what some of the founders are already doing to help propel their business forward when it comes to AI. And so I think that's what we're going to see happening. I think we're going to start seeing founders and e-commerce equation actually, that's one of our missions is to help founders do this, to utilize AI within their business, but not in a way that's just saying use more AI, but we're actually going to be showing them how to do it on a weekly basis within our program. (37:46): And this comes back to, we've already had off the back of this, brands are building their own systems and they're replacing technology that was there previously. So inventory demand planning systems are already- Cutting cost and building their own brand up. Previous platforms. Izzy Rosenzweig (37:59): Love Travis Wright (37:59): That. Exactly. So it is going to be a very, very disruptive year for the tech space. I will say now, I think everyone knows it's coming and I think because founders are going to be able to just build out for something where they can host something for $20 a month, a lot of the tools that they're actually needing to use today for their business. So I think we're going to see a big disruption in the technology space. I think we're going to see founders building their own platforms and I think we're going to see founders, so reducing costs, improving efficiency, and also improving efficiency in every dollar they're spending, not just from time, but I think from a cost perspective, I think we're going to see founders become more and more specific in terms of how and when they're spending every single dollar. So I think that comes to what staff they have, what systems they use, and how they're actually applying their marketing spend. (38:50): And I think through the new age that we're going through as well, I think my prediction is founders will continue to be able to drive more and more marketing efficiency because of the analytics tools that they're going to be able to utilize where they're going to be able to continuously double and triple down on ad platforms that are driving efficiency. And I think that the granularity of that is going to become so extreme that I believe if you're not driving that efficiency as an ad platform, then the ad platforms are also going to be very disrupted. So that's what I'm thinking right now, but I'm really excited for founders because I think that this is their time. I mean, we're all about founder empowerment, but I think that's where we're at at the precipice of more than ever is founders being able to be in the driver's seat of their business and make very smart and intentional decisions. (39:38): And I think Izzy Rosenzweig (39:38): This is actually, to your point, it's pretty recent. Claude Core, Claude Coding, Codex, it's very recently got this good. There's been prompt and research, but use of work is really only feels like three to six months old. Travis Wright (39:51): Yes, absolutely. And I would say just now in 2026 is really when we are seeing it starting to boom from a use case perspective where founders are also going out and now vibe coding platforms to help them improve their efficiency. We've got another founder in our ecosystem who's, I already mentioned one that built a demand planning software for himself, another one that has built an order placing system for his wholesale agents. They could never find one that they loved. Now they're utilizing this one and they're all saving $10,000, $20,000. And so that's really also what we're on the journey of. So we have a call every week that's called AI Leaks from the Lab. It's actually launching tomorrow so that every week we can help founders harness the power of AI and implement it into their businesses. And I'm super pumped. I'm super pumped for where the next three to five years take us. (40:41): And just to know that we're only at the beginning, I'm really stoked to see where we end up in a couple years from now. Can't Izzy Rosenzweig (40:48): Agree more. Travis, this has been an incredibly valuable conversation. Brands that are watching it, where could they follow you personally and where could they learn more about e-commerce equation? Travis Wright (40:56): Thank you so much. Well, you can find me Travis Wright on LinkedIn. I'm Travis e-commerce equation on Instagram. We are e-commerce equation on Instagram and our founder is Jay Wright on Instagram as well. He's always dropping really awesome gold nuggets there and also jamming on industry news. So make sure to follow us in all those places. And yeah, would love to jam with you further and help you in your growth journey. Izzy Rosenzweig (41:21): Amazing. Travis, thank you so much for being on the podcast. Really appreciate it. Travis Wright (41:24): Thanks so much for having me. Great to meet you. Izzy Rosenzweig (41:28): Thank you for listening to The Modern Supply Chain. If you have questions about anything we talked about, you can find me on LinkedIn. And if you're interested in learning more about Portless, check out our website, portless.com. As always, hit that follow button so you don't miss an episode. See you next time.