Latest / The Modern Supply Chain / The supply chain strategies behind Mack Weldon’s growth
Transcript
- Brian Berger (00:00): Part of what you need to be comfortable with literally as step one if you're going to do this is lots of uncertainty, risk, feeling like the wrong decision or the wrong move could have real consequences. And you just can't really have that if you're treating it as a side hustle. Izzy Rosenzweig (00:21): 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 Brian Berger, the founder and CEO of Mack Weldon. Brian spent over a decade in the consumer interest space at companies like WebMD and Comcast before a frustrating trip to Bloomingdale's underwear aisle changed everything. He launched Mack Weldon in 2012 with a product-first approach, engineering custom fabrics, building a global supply chain from scratch. The brand has since scaled the full lifestyle company with its own retail stores, wholesale partnerships with Nordstrom, Bloomingdale's, and manufacturing across five countries. In this episode, we'll be unpacking what it actually takes to build a supply chain that could weather tariffs, scale across channels, and still protect emergents. We'll discuss why Brian locked his prices during 2025 tariff storm, how he manages to quality control across a global factory network, and what the lead from pure DDC to omnichannel really looks like operationally. (01:22): Brian, thank you so much for being on the podcast. Brian Berger (01:25): Thanks so much for having me. It's great Izzy Rosenzweig (01:28): To be here. Brian, I would love to start, if you don't mind, the story at Bloomingdale's, because every founder has their epiphany and it sounds like it was at the underwear aisle at Bloomingdale's. So if you don't mind, what was that story? Brian Berger (01:37): The aha moment. I used to shop every year. Bloomingdale's would have this big men's underwear sale. It was their own time you could really get the good stuff on sale. And every year I'd go in and there'd be more and more brands there, more and more product, bigger floor space. As I stared out across the vast array of boxes of underwear, I was sort of interrupted by the salesperson who said, "Are you confused yet?" And I'm like, "I'm just trying to find what I had last time," which was whatever I told him. He's like, "Oh yeah, it changes every year, just a little bit." And I had been thinking about this for a while. I was sort of obsessed with this kind of customer experience problem where you would show up. Guys generally hate going to places like department stores anyway, and now you have this terrible, confusing experience for something that is kind of an important part of your wardrobe. (02:32): I mean, it may not be the thing that you wear outside, but if you talk to guys about their underwear, their T-shirts, their socks, undershirts, they have a lot to say. Sort of like the light bulb went off. I'd been thinking about the product side of it, but then there was this kind of customer experience piece that really connected to what I was doing professionally, which is really internet-based content product and services. And so said, "Well, if you can match these two things up, you have the opportunity to build a very potentially disruptive brand." And Izzy Rosenzweig (03:05): I think that's pretty unique with your founding story is that your background actually isn't in underwear or fashion. It's actually operations and consumer businesses online, but your partner seems to have this background in fashion. So how was that? Was that like you needed both ends to make this work? Was he more supply chain? You more go to market? What was that flow like? Brian Berger (03:28): Not minimizing any of what Michael brought to the business when he came on after I had been at it for a while just as more of an advisor. I think this kind of gets to the root of what makes entrepreneurs and entrepreneurship kind of interesting, exciting, and disruptive. And that is, I think some of the best people to create innovation in a space are people who have no experience in that space. And so I had zero experience on how to get stuff made, but I kind of knew how to ask questions, knew how to navigate to sources of information to get to the answer. And half of the story, the kind of internet-based e-commerce, customer experience, digital marketing, data analytics, that was my world. It was just instead of selling physical products, most of the businesses I operated were content-driven businesses, but I really understood that part of it. (04:31): It was the physical goods, like how do you make something? And I had done a small thing in business school. My wife and her best friend founded this very niche accessories company and I was helping out. And so I understood that making stuff is not necessarily a function of expertise, it's a function of tenacity. Izzy Rosenzweig (04:53): I love that. And something I've heard often, being oblivious as a founder, being naive is your superpower. If you knew a lot, you may have never started it, right? Brian Berger (05:00): Yeah, pretty much. Izzy Rosenzweig (05:02): If I understand correctly, when you started the business, it wasn't. Some people do a side hustle like, "Hey, let me try it let's see what happens." It seems like you went in like, "No, let's build something." So was that a risky bet? Was that a big decision? Would you do that again? Brian Berger (05:15): It was a big decision. I was unique in a sense of I'm not like the, I dropped out of college and started this thing out of my basement and ate ramen. I was pretty well into my career at the point of which I did this, but it was kind of always part of the plan. I'm the kind of person that likes to. The confidence comes through the experience and the education. And so it was really all about building blocks. The first phase of my career was full immersion into early internet and early internet businesses and just being sort of jack of all trades and really just knowing how to live in that environment. Then I went to graduate school to firm up some of the hard skills, did some things there that were kind of unique and really locking those in. And then post NDA, more senior level of consumer internet operations. (06:10): And then my role immediately prior to this was one where I was looking at investing in or acquiring consumer internet and digital businesses that could be advantaged by this large corporation that I was working for that had tons of resources, economic and otherwise. And so it was always meant to be the last stop on the journey for me. And I just got to a place where I was able to say, I'm going to pull the ripcord now. I had a conversation actually with my stepbrother who was a multi-time entrepreneur. And we had lunch and I was talking about doing this and how I was getting really close. And he said, "You have to leave. You have to not have a paycheck and health insurance and all the things that are comfortable about this world that you're in. You have to feel that you have to make that step." And so I don't think it was quite that dramatic. (07:06): Again, I was far enough in my career, so I was able to get to a place on the economics that I felt like I was okay and I had some runway. And so it wasn't like I was really going off the cliff, but I think philosophically you need in your mind to be all in on something. Izzy Rosenzweig (07:23): And I think if you don't go all in, it's so much easier just to stop it. If it was part-time, all right, hit a first blocker. Well, I've still got my core business. Brian Berger (07:32): That's completely right. I mean, I advise a lot of entrepreneurs at Columbia Business School, which I'm very involved with. And a lot of times I'll talk to people and they'll be like, "Yeah, I'm weighing this and that, or I'm full-time here and dabbling there and trying to figure out." And it's a hard call. But I think part of what you need to be comfortable with literally as step one, if you're going to do this is lots of uncertainty, risk, feeling like the wrong decision or the wrong move could have real consequences. And you just can't really have that if you're treating it as a side hustle. And Izzy Rosenzweig (08:09): I think they say a lot of Google engineers, they can start AI companies, but it's very hard to do that when you have a very cushy job, right? It is, Brian Berger (08:16): For sure. And Izzy Rosenzweig (08:17): Even if you leave, easy to come back. For Brian Berger (08:20): Sure. And everybody needs to be on board with it too. I mean, by the time I did this, I was married and I had three kids, two and a half kids. My third son was born literally the day we launched. We had spent a year doing all the behind the scenes stuff, but when we actually launched the business, almost coincided with my thirds. It's Izzy Rosenzweig (08:40): Funny, I had the flip start. I actually also started my brand and I was a brand before Portless. I started in 2012 and I had my first kid in 2013. Brian Berger (08:49): Oh, that's very cool. Oh, Izzy Rosenzweig (08:51): Awesome. Brian Berger (08:52): I didn't know that. I Izzy Rosenzweig (08:53): Know that experience. And actually when you started, again, similar to the time that I started, DDC evolved like crazy. Early days, first of all Wild West of Meta, marketing was great, then marketing got a little tighter. Venture capital throwing money into the Caspers and the Warby Parkers of the world. Top line, top line, top line. I'm curious, did you see that same journey of either venture, top line, don't worry about burn? Did you take a different approach? Did you go through the same top line burn, but now actually economics matter more than anything? How did you see that journey? Brian Berger (09:24): It wasn't quite on the level of Warby or Casper or the peer that we looked at was Bonobos. It wasn't quite like that. We had always sought to build a similar kind of business, one that was advantaged by an expertise in what is now the D2C playbook, growth marketing supported by customer retention and the ability to make that math work. So we had always set out to do that. We were going to do it on a little bit of a less accelerated and less kind of irrational scale. But in any case, to answer your question, I think, yeah, in the early days, nobody cared about profitability at all because the business was growing. We were able to prove out the high level unit economics, and there was always more money around the corner for when you got to that, whatever that next milestone was. So I think you asked me would I do it again? Izzy Rosenzweig (10:25): Well, would you do it again or have you seen this shift and have you need to go along with that shift? Hey, it's no longer just top line, it's actually fundamentals. Brian Berger (10:34): A hundred percent. There's no capital. I mean, there are a couple of exceptions in cases where capital is going to fund growth and non-economic consumer apparel businesses. I'll just speak about consumer apparel specifically, but I would say it's probably more even across all many consumer categories. Very few examples of that. Most of what you see now is cash coming in to very sound, profitable, growing brands where people just want some liquidity and it's more secondary, it's less primary capital. So you have to be self-sustaining because there isn't another upround and significant pool of investors clamoring to invest in businesses like ours now. And a lot of that's driven by just the realities. I mean, there's been a lot of failure, not a lot of value creation, certainly on the venture PE side of things, especially in consumer apparel. And the GDC space specifically is fully priced. (11:40): There's no arbitrage or advantage there. I mean, there's advantage, but it's nothing like it was. It's not a predictable, repeatable advantage. It's like the movie business. You do everything you can. You put all the actors in place, you have the best set, you have a decent budget, you have a great script, but you don't know if people are going to show up and buy the tickets. Same thing with Meta. You want to bet on whether or not you can create the next head movie? Good luck. You also have to be in it. On Izzy Rosenzweig (12:07): The flip side, the demand's still there. People are just buying more on DC. Demand Brian Berger (12:12): Is 100%, but there's way more brands for consumers to consider. Izzy Rosenzweig (12:17): Yeah. Yeah. I mean, you do have interesting wins like Quince. I don't know if you saw Quince raise at a 10 billion. Brian Berger (12:22): Yeah, I think Quince is like, well, put that in the outlier category where I think they have a supply chain. I don't know the company super well, but allegedly they have a supply chain advantage that enables them to do what it is that they do. I don't quite understand. That's what Izzy Rosenzweig (12:40): Portless does. We help brands run that supply chain. Yeah. Brian Berger (12:47): Well, great. So then they're helping you prove it out. But I don't quite understand how it all works, to be honest, especially given the range of what they're able to make. But I applaud them. I hope they're massively successful and create a tailwind for other brands. And Izzy Rosenzweig (13:05): Talking about supply chains. So if I understand correctly, you guys have a diversified supply chain. Multiple countries around the world, I think you mentioned five different countries. How do you balance diversification versus once you're so diversified, there's also more to control? How did you think about that? Did you do it early on? Was it a certain scale? How do you think about diversification on supply chain? Brian Berger (13:29): The way we though about our supply chain is really threefold. The first is where can we make the best product? The second is where can we make the best product for the best price? And the third is just sort of an eye towards concentration risk. Once we got to a certain place, we just wanted to make sure that we had some ability to toggle if need be. And this was not even in the current geopolitical environment we're in. It could just be something happens in your factory or in the local area where you're producing. Did you Izzy Rosenzweig (14:06): Do it before the COVID kind of chaos supply chain or is it since COVID? No, Brian Berger (14:10): No, it's pre - COVID. Pre - Izzy Rosenzweig (14:13): COVID. Wow. Okay. And how about managing that? So you have five countries. One, yes. I don't know. When you say quality, I'm assuming you mean raw materials, specific raw materials are stronger. Is there a specific expertise? I don't know. Is Bangladesh better than in the jean category than China? Brian Berger (14:29): It's probably more at the factory level just in terms of the quality of production. And obviously, yeah, the mills we work with, there's a supply chain happening that I'm personally not overly exposed to, but yeah, we have fabric suppliers and trim suppliers that work with our cut and sew factories that aggregate everything, package it up, and ultimately sell it to us. And we always really just try and lead with what are the ingredients to make the best product and where's the best place to make it? And can that fit into our cost and warranty structure? Izzy Rosenzweig (15:06): And I guess on that note, you mentioned you started with underwear, right? It was hyper-focused. Now you guys are much more than that. Was that the balance of expanding SKU count I think equally ties to risk of inventory, risk of capital. How do you manage that? We Brian Berger (15:22): Started a little bit more than just underwear. We had, I don't know, underwear, socks, t-shirts, undershirts, and a handful of variants within those as silhouette variants, but it was still very limited. And the idea was, yeah, let's only play in categories with very minimal inventory risk. One, so fully produced product would never have to be off priced and liquidated because that's a bad thing and it cheapens your brand and the way consumers think about it. And then also you could create some cost advantages because you're able to mass produce grays, which is fabric that isn't all the way dyed or cut. And so you can position that based on what products are working. Still, a high percentage of our volume comes from things that fall into that definition, but we have meaningfully diversified the product assortment. And to your point about capital allocation, yeah, you're making bets. (16:21): The first bet was a bet. We bought, I forget how much it was, but it was not an insignificant amount of inventory for a brand that never existed and had zero track record. We didn't kickstart or anything. We loaded up the warehouse, we teed up a bunch of marketing and PR, and we launched the business. And that fortunately went well, but then what? Then the second round needs to be more. And how much more? And in what sizes and colors and things like that? And eventually we got smarter and better about that. But still to this day, we're launching a new product category, outerwear, jacket for the fall. How much should we buy? There's still a bit of art and science that goes into those decisions. And there are decisions for buying $25,000 of a fall style that I've never sold before, that's 25,000 I can't spend somewhere else. Izzy Rosenzweig (17:16): So on the essential side, in the early days, the bet, it could last you. It could take you where you need to go because they don't go out of style. But when you go to newer bets, is it a small batch manufacturing to get where you need to go? Or this outerwear, let's see jackets. Do you still go all out or it's like, no, let's be okay to be sold out and then that will inform a next year decision? Brian Berger (17:40): I think it's the more the latter. Yeah. We have a crescendo dravara assortment that is meant to be always in stock, always something to buy. If you really want that, you bring up the full monty, but always in stock. And then anything that we consider to be a seasonal item, we typically buy on a 10 to 14-week want to be sold through it completely kind of thing. And Izzy Rosenzweig (18:05): You mentioned something really interesting that I've heard other founders talk about, but I don't know if that's simple to execute. You mentioned that when you buy a material, you buy it in a way that could be allocated in a few ways. Can you talk a little more about that? Because I don't think brands are very familiar with that because you could also cut lead time. If you could upfront buy material that could be used in many different ways, the ability to time to production massively increases. So can you talk a little about that that I think most brands aren't familiar with? Brian Berger (18:34): Yeah, and that is and was certainly back in the early days very important to us because that could shave 30 days off of the lead time for the product, which is significant. And yeah, and just the way that it works, I'll give you an example. One of our hero fabric platforms is called ACE. It's a jogger, sweatpant, and three different silhouettes a top, a pull zip, a hoodie, crew neck, and something else. That material is responsible for all those products, and it is an always in stock regardless of season assortment for us. So we are able to produce that fabric in advance, which is all part of what we do is all of our materials are proprietary in some way. It doesn't mean that another brand can't have the same formulation, but we're not really buying anything off the shelf from the existing fabric. It's part of what we talk about. (19:38): It's what we use to engage our customers. It's part of what makes the product special. Everything we make has some degree of lead tide to the tune of 30 plus days. So if we can make that in advance, a roll of that or certain yardage of that, we do take on some financial risk to do that. That's not free, but we know that we're going to call that inventory of fabric to get dyed and cut within a certain period of time. And that enables us to shorten the lead time, have a little bit more flexibility in terms of quantities, don't have to make the call. Again, all the things that you and your business are enabling, which is really about putting that decision much closer to when the product is actually going to be sold. So Izzy Rosenzweig (20:26): You know you're not going to liquidate, you know you're going to eventually use it, increases your time to market, which again, affects cashflow and affects the way you run the business. Yeah, and Brian Berger (20:34): It's critically important. All right, Izzy Rosenzweig (20:35): Last question, then we'll move into predictions. I think you guys have built really what every brand's dream is of going beyond D2C. D2C is great. It is a method to sell your goods, but it's only one method. You went omnichannel, stores, wholesale. And I guess how was that transition? Any guidance you would give? Don't do it too early. Do it as soon as you can. How should brands think about omnichannel? And is there a right time for it? Brian Berger (20:58): I would say do it as soon as you can unequivocally. The one thing I say to anybody coming to me with a business like this is omnichannel strategy out of the gate. It doesn't mean you're going to be able to open up a retail store. It doesn't mean you're going to go be able to go get a deal with Nordstrom, but make sure that your unit economics and your business model can support that. Because wholesale, if you look at businesses in our space, some of our peer group, I would argue that the ones that have been most successful are the ones that have gone wholesale straight from the jump. And that was usually a function of their not being able to raise capital to fund a D2C effort. If you hear the Ori guy talk about his business, he got thrown out of all these pitches or got rejected on these pitches and he was a smart money guy and just knew that if he could create a wholesale revenue stream, that could be a profitable revenue stream he could use to fund his D2C business. (22:01): And so if I had a do-over, I would've done it much earlier and I would encourage anybody starting a business like this to do that sooner. And there's so many benefits. There's obviously revenue diversification, there's marketing, there's cashflow to again, fund more cost-intensive, lower profitability channels like D2C or retail. Retail doesn't make money on day one. It takes a year plus. So that's my view on omnichannel and how I think it was best done. In terms of for us, I would say it's an area where I might not give us a super high score. It's not because we haven't tried, but D2C is still our dominant revenue stream. We have a wholesale business that we've been at for going on three years. We sell in all the major retailers, but not at a level where it's yet meaningfully impacting our business. It's just like there's the people who get that business, if you talk to somebody, talk to a brand that is largely wholesale driven or 50% of their revenue comes from wholesale, they speak a completely different language. (23:14): Their operations are different. The way they behave is different. Their headcount profile, it's just a different thing. And so getting that earlier I think would've helped us. I know. And Izzy Rosenzweig (23:24): I think to that point, when I speak to brands that start getting to wholesale, there's lots of these unknowns. One second, what bucket of inventory? Is it separate P&L? Is it a separate inventory count? Because now I'm out of stock on my D2C. So getting early as possible is learning the hard lessons possible and potentially building a different trajectory of the business. Earlier the better. There Brian Berger (23:44): Was a unique moment in time also. Wholesale has a lot of hair and there's a lot of things about it that suck. So many things. They're generally not helpful with brands. They operate in a way that is very, very hard and not in a partnership way. I mean, they have SLAs on how you ship stuff to them. It's like a business model. The stamp isn't in the right place and you get charged for that. So there's a lot to that business that is not brand friendly. But when we started and for many years after, there was a moment where wholesale retailers desperately wanted access to brands like ours, these kind of new emerging brands that no other wholesalers had. It's only available D2C. So there was a moment in time where again, it was good, both from the standpoint of terms and how they treated you, and also just a competitive landscape. (24:43): Now it's not novel anymore. So Mack Weldon shows up to Nordstrom's market appointment and there's 50 other things that look and feel like Mack Weldon. 10 years ago, it wasn't that way. So Izzy Rosenzweig (24:55): It's a little more competitive, but it's still an omnichannel strategy you have to look and have to take. For Brian Berger (24:59): Sure. For sure. You have to do it. Izzy Rosenzweig (25:02): All right. Predictions were more like advice for people building. Let's say you're starting again, you built it from scratch and you were stark in day one of operations. Anything you different? Anything you would tell brands to start day one and how they think about operations, how they think about executing their brand as they're building it? Brian Berger (25:20): Yeah, I mean lean as possible. Lean, lean, lean. And avoid the complexities of raising money as long as you can. It's very hard to operate an inventory-based business without some form of capital. It could be an ABL, it could be a private equity check, could be friends and family. You need to buy inventory, you need to market. Unless you're independently wealthy, it's just hard to do that on your own. But get it as far as you can and take as little as you need and try and do it in a way that encourages you to always be thinking about profitability because businesses like this should be unieconomic profitable. The thing that happened to all of us was the payback period starting almost like 90 days, 60 days. And the next thing you know, it's like a year and a half. Izzy Rosenzweig (26:09): Meta CPMs go up. The LTP better be amazing. Brian Berger (26:13): Everyone's like, "Yeah, all right, whatever. It'll happen." Izzy Rosenzweig (26:17): Yeah. But it feels like it's a new world of DDC. And you are starting to see some brands being big brands, people like three, four people, and they're just running it differently. And that's the advice there. Be as light as you can, as lean as you can. Cash is king. I Brian Berger (26:34): Don't care what anybody says, whether you're a Kardashian business, whether you're a scrappy Q4 person thing or us, it's very hard to build a consumer business if you don't have resources to invest. You need to be able to invest. You can invest smartly. You need to be thoughtful about it. You shoot every dollar. You not going to be able to. You know what I mean? And we didn't make lots of wild mistakes, but there was a time when it was not the level of discipline that there is now. Izzy Rosenzweig (27:00): Yeah, 100%. Well, Brian, thank you for on the podcast. Absolutely incredible, Brian. Mack Weldon, everyone is very familiar with. Incredible story behind the brand. People know where to find the website, but where could people learn more about you and the journey? Brian Berger (27:15): I'm always up for a conversation. Hit me up with an email, LinkedIn message. Happy to always chat, especially if you're a founder. If I can add some value to what you're doing, happy to help. Brian, Izzy Rosenzweig (27:25): Thank you so much for on the podcast. Thanks for being here. Have a great day. 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.