Latest / The Modern Supply Chain / How to scale a premium brand without losing quality
Transcript
- Yitai Geng (00:00): We don't want to sit on hundreds of inventories sitting in the warehouse, so we custom-develop those per pre-order. You'd be surprised, customers, they are very patient. As long as they know that, okay, this is a great product, I'm going to receive that just for me, they're going to be very happy to wait and we just got to communicate with them very transparently, honestly. It's almost like pre-ordering your car, right? You got to order a Porsche 911, it takes a year. Chris de Jong (00:23): 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. Hi everyone. Welcome to The Modern Supply Chain. I'm your guest host, Chris de Jong, VP of Marketing here at Portless. On this show, we break down how modern supply chain strategies help e-commerce brands shift away from staying above water to predictable scaling. Today's guest, I'm happy to say is Yitai Geng, founder and designer behind YITAI, the brand. Yitai was studying business at USC when he taught himself embroidery and began building a brand from his dorm room. Launched YITAI in 2016 around hand-stitched menswear pieces, with some of his most intricate designs taking months to develop and complete. Over the years, YITAI has evolved from a passion project into a broader menswear brand, but Yitai has been deliberate about not letting growth dictate the product. (01:22): In this episode, we're going to unpack what it takes to build a deliberately slow, quality driven brand in an e-commerce marketplace that rewards speed. We're going to discuss how Yitai finds manufacturers capable of executing highly detailed products, what happens when TikTok demand moves faster than production, and how he protects original designs from fast fashion copies. Welcome to The Modern Supply Chain. Yitai, great to have you here. Yitai Geng (01:49): Thanks for having me. That was an amazing introduction. You did your research. I didn't even know. I went through all that. It's crazy. Chris de Jong (01:55): So let's start at the very beginning then. As I mentioned in the intro, you were a business student at USC, not a fashion or art student, where you picked up embroidery. What made you want to teach yourself something so technical and time-consuming? Yitai Geng (02:10): It actually goes a little bit even more back to a high school era. So around 2016 - ish, I was a senior in high school still, but I was always into clothing because there were so many cool brands like Fear of God, Supreme. And during that time on social media, it was explosive. A lot of those designs were very popular and I was a consumer of whenever I can afford it, I would buy Supreme or brands like Fear of God or Easys. But gradually I started realizing that a lot of these brands are just hype-based and there was actually a lack of quality and I felt like the designs were very repetitive. So gradually I started watching YouTube videos. I started watching YouTube on how do I design a piece of garment and how are they manufactured? I started learning more about fabric, about making patterns and did my first production run in LA, but the ethos has always been trying to use the best materials that I could possibly find and making really, really good quality and beautiful products for my customers. (03:15): And gradually it just developed from there. But I was always a stubborn kid trying to make the best quality product I can for my customers because my parents has always taught me. They said that your customers are everything. Without your customers, you wouldn't be a successful person. So whatever I can, I try to provide the best quality products and the best customer service. That has always been the ethos. Chris de Jong (03:39): I hear you around 2016, Fear of God, Yeezys. And I remember seeing those first Yeezys and seeing the intricate weaving on the shoes and being like, "How could you make something like that? I don't even understand how it's possible." And you were able to learn that from just even watching YouTube videos? Yitai Geng (03:57): Honestly, no, because I was going to different fabric stores as a high school kid who knew nothing about fabric, who knew nothing about weaving, who knew nothing about GSM or stitchings. And I was just going in as a naive kid and I was just asking a lot of questions. All this knowledge is just years of accumulation and experience through failures and mistakes that I've learned. We are so lucky to live in such a world nowadays that we can find anything on YouTube or even ask ChatGPT or Claude, and then they'll tell us all the information. And I'm still learning to this day. I think it's just about finding those information based on what you truly want out of a product. Chris de Jong (04:39): I know your first collection kind of started with hand embroidery and it was very intricate and some of your pieces take months to develop and I can see why. How much of that slow, methodical, iterative process is still core to your business now, even though I know that you've added a lot more products to your brand? Yitai Geng (04:57): When it comes to hand-embroidered products, the reason why I want to start on those hand embraid products is because it's just so beautiful and I just felt that clothes should be a form of art and I wanted to express that form of art through just intricate hand embroidery. When it comes to embroidery, there's machine embroidery and hand embroidery, and there's also hand crochet. All those are very different techniques, but you can really tell by applying different techniques like how design comes to life and how beautiful they are when you see in person. But as you mentioned, those things require an extensive time to produce, to make because they're required by humans. Nowadays, I still try to maintain that craftsmanship within the brand by using the best materials and the best techniques that we can possibly find. Chris de Jong (05:43): Very cool. Well then shifting gears a bit to your footwear brand made with recycled bottles, algae recycled foam, which is amazing. What was it about moving from apparel into footwear and especially going the Kickstarter route? What did you learn through that process that you were able to take back to your core YITAI brand? Yitai Geng (06:03): Mobi, the sustainable sneaker brand, we actually started it as a college marketing class project. It was crazy how much it was developed. Right now we're no longer running a business, but it was a really fun project for me to get to learn about a different category of goods. Basically, there was a lot of trials and errors. We didn't even know we can make a pair of shoes out of recycled plastic bottles. The plastic bottles get shredded into pieces of plastic and then they get spun into different yard. And then we in turn weave that into a piece of a shoe panel, upper panel, and then we treat it with water resistant solutions and it becomes water resistant and it's also breathable. It's insane. That experience just made me learn that everything can be made. Humans are so creative. We can make almost anything that we want and we just have to be innovative and have the budget for it and just be patient and consistent. Chris de Jong (06:56): I can see that reflected in your inventory, in the products that you make. It's like the high quality, the craftsmanship, that shows up a lot in everything that I see your brand put out. Shifting gears a bit, you operate in this space right now, especially at apparel where we're in a quote unquote fast fashion world where the pressure is to move very fast. I think of the model of the world. How does showing customers the materials, the labor, the process and the slow diligent progress of your brand show up as how part of you repeat in the apparel space? Yitai Geng (07:31): One of the downsides of almost the internet is it make creating products too accessible. A lot of companies don't genuinely care about their customers. And the reason why I say that is because if you genuinely care about your customers, why would you put out a crappy product? And I think because the internet, there's so many other brands are popping up that make inferior products. Basically, I think customers appreciate honesty and transparency. A lot of our clothes are custom developed, custom made, going from the fabric to the embroidery. We take our time on those things and we stand behind our products. I think at the end of the day, just about communicating with your customers, for example, hand embroidered sweaters, we do pre-orders on those because first of all, inventory is a huge issue. And also each sweater could cost hundreds of dollars to make because of hand-embroidered efforts. (08:15): We don't want to sit on hundreds of inventory sitting in the warehouse, so we custom develop those per pre-order. And what we do is we communicate with our customers through email and SMS that, okay, here's the status of your order. You'd be surprised. Customers, they are very patient. As long as they know that, okay, this is a great product. I'm going to receive that just for me, they're going to be very happy to wait and we just got to communicate with them very transparently, honestly. And most of the time they are very happy about their entire purchasing experience. It's almost like pre-ordering your car, right? You got to order your Porsche 911. It takes a year. Chris de Jong (08:50): If you're going to have it paid from the factory, you understand that it's going to take a little bit of time, which actually leads me to my next question. I was going to ask you specifically about pre-orders, understanding that pre-orders protects cash flow, de-risks and upfront, but it creates this kind of expectation around customers who are like, it's going to be something in the future. Does that become difficult operationally? What I'm hearing you say is people are patient and no, it doesn't really, but are there other downstream effects on a pre-order model? Yitai Geng (09:19): I think the negative side will be the customers receiving the products a little later. And for me, I'm an impatient guy. For example, I want my customers to receive the products as soon as possible so that they're satisfied. But that's probably the only downside I'd say because we do a very good job at communicating about our pre-order timelines and we update about our status and each steps. So our customers are mostly happy, I would say. Chris de Jong (09:44): You had said previously that TikTok Shop has specifically changed your life in growing your business. When a piece suddenly takes off on a platform like TikTok that's built around immediate speed, immediate demand, how do you determine whether to really double down or go deep on that thing that's spiking on TikTok or slow roll it out? I can imagine that that's really difficult as a brand if you're seeing really big traction on TikTok, but you're like, this might not be it, this might not be the right bet. How do you navigate that? Yitai Geng (10:19): When TikTok Shop was first introduced, I actually had a meeting with an account manager at TikTok because they wanted my brand to be on TikTok Shop. And during that time, we were fulfilling everything out of LA. So we actually had a good amount of inventory that we're able to ship. And one thing about TikTok Shop is that everything has to be discounted and made affordable. And right now it's no longer aligning with the brand of image that we firmly believe in, which is premium quality products and handmade custom developed fabric. But when a piece of content goes viral, it's usually a good sign because it usually means that people are aligning with that product and they want to purchase it. So we would be a bit more aggressive with the marketing that specific product if it goes viral on TikTok or Instagram reels. Chris de Jong (11:10): Has there ever been a time where a piece has really shot up through either Reels or TikTok shop and you just couldn't keep up with that demand? Yitai Geng (11:19): Absolutely. Back in 2023, that's when I first really started hopping on TikTok. And I remember that there were so many concepts that were going viral within that year and I had to put everything on pre-order. And I was just like, holy crap, this is going insane. We're having issues fulfilling because I was still fulfilling out of my own warehouse. We didn't have a 3PL. I was hiring my friends. I was like, yo bro, can you please come in tomorrow, help repack? Because production takes a very long time. Production could take one to two months or even more with hand-embroidered products. And then they take another month to sea freight it over to LA. And that's like three to four months already. During that time I was trying to communicate with my customers, but people do get impatient with it. That's totally understandable because if I had to wait for three to four months for a product, I'll be impatient as well. (12:05): That was the biggest struggle that I had to deal with, biggest challenge during a big growth of my journey. Chris de Jong (12:11): It's rare that I hear brands that say, "Hey, I really blew up on TikTok Shopper Reels," let alone multiple times. It's a good problem to have, but I'm sure it's a unique stressful problem on the business. I know and I've heard from our team here at Portless that your products are made in China and you maintain direct relationships with every factory you work with. How do you find a manufacturer that's capable of executing on a product as detailed and as high quality as yours? I can imagine that must be a long process and I would love to hear more about that. Yitai Geng (12:49): The manufacturer experience I've had ever since the beginning was only interesting because I actually did my first production in downtown LA because I originally thought that downtown LA manufacturing would be better, but that was total opposite. When it comes to Chinese manufacturer, the possibilities are insanely unlimited because majority of the fabric is milled in China, so you're actually close to the source. And in China, there are so many different factories with different standards. It all depends on who you want to work with. And to manage those relationships, I visit all the manufacturer production partners almost quarterly. And sometimes even I'll go two or three months in a row to go to China to visit those factories for production. At the end of the day, I truly believe in that with the Chinese production partners, it's all about communication. It's like communicating these are exactly my standards and these are the timelines and we come to an agreeable set of standards and timelines and we just need those standards. (13:46): There hasn't been a time where the products came out inferior than I wanted them to be. We also have a higher budget for production compared to other brands as this all depends on what you're willing to pay for, who you're working with, and have you vetted those production partners yourself? I think those are the most important things. Chris de Jong (14:03): What are those vetting process look like for you? Is it going and saying, "Hey, show me samples of the products you've made. Who have you worked with?" What is your internal checklist to be like, "This supplier meets and clears my box?" Yitai Geng (14:16): So I don't even have a checklist. It all just depends on the feeling. Whenever I walk into the factory, for example, our recent salvage denim mill that we custom develop a lot of fabric with, you can see from the condition of the factory floors, from the laborers, from the salespeople, what their office looks like, if it's clean, tidy, and are there protective measures. For example, a fabric mill, there's a lot of cotton and everyone's wearing a mask because they don't want to breathe in those cotton fibers. Everything's very clean, everything's well ventilated, and everyone's very professional when they communicate and they say that, oh, these are the exact timeline that we can deliver. They don't over promise. They don't under promise. We all start with a small batch run to test the efficiency and the timeliness, and from there we just scale upwards. Chris de Jong (15:03): It's very similar to how we think about evaluating partners or other warehouses that we might work with at Portless. It's not the person with the fanciest pitch deck. It's the person that when you go and you look around their operations, you look at their warehouse, it's like, how clean is everything? How organized are they? How does the data flow? And it's not like checking a list. It's vibes based, but it's also like they're good operators. And I guess that's what I'm hearing from you, but on production partners. Yitai Geng (15:34): Exactly. But I think I should learn from you guys. I should definitely have a checklist to actually go in and check those things off. But yeah, so far the vibe-based analysis has been working, but we can't conclude a checklist from the things we just talked about. Chris de Jong (15:50): Yeah. Right, right. So the craftsmanships, we've talked about this a few times, you have very high standards of craftsmanships in your pieces, and that's something that is inherently a moat, I believe, for you, Ty, because it's very hard to copy your pieces. Is there a point where having that degree of high-quality craftsmanship doesn't balance out for the business? Is there a point where being too detailed becomes harmful to your business to be able to scale it? Yitai Geng (16:17): Definitely. Sometimes with those beautiful hand-abrated pieces, it's much harder to scale because the wearability is low, but the degree of beauty and craftsmanship is extremely high. So I've learned to start using that same craftsmanship and stubbornness on product refinement, but develop it towards more of a timeless and wearable products. For example, our selvedge jeans, it's the same philosophy with the fiber that we use, the solid that we developed, and also the details all around the jeans. Basically same level of details, but reinterpreted into a product that can scale. Chris de Jong (16:57): Right. Yeah, that makes sense. I was looking at your catalog just a little while ago and I said, "Oh, they look amazing jeans now." That was the first thing I thought of. It's like, "Oh man, the detail in the stitching on these jeans must be so impeccable based on the other products that you have in your inventory." That's really cool to hear. Something you had mentioned a few minutes ago was when you were fulfilling back in 2023, you were fulfilling out of downtown LA, you were getting your friends to come and help you pick, pack, and send out orders. Now that you have transitioned to direct fulfillment through Portless from China, how has that kind of started to change your business in terms of your strategic approach, like your scale or your plans for the future now that you're using a different kind of supply chain model? Yitai Geng (17:40): Yeah. I tell everyone that asked me this question as I asked me about fulfillment, I was like meeting Portless has been the biggest unlock for my business because first of all, you guys are extremely professional. I vetted the fulfillment center in Shenzhen personally before I signed the agreement and I had an amazing tour with Wesley, but the fact that you guys are able to ship, for example, from everything from the inbounding to shipping all the products, I think this takes one to two business days and you guys are working around the clock twenty four seven. Every time I had any issues with shipping, the customer service will always handle it immediately. And my account manager, Steven, he's great as well. He's always trying to provide me with different ideas and solutions. And you guys also have this genius person, Adar. This guy creates different products monthly. (18:27): I don't know how he does it, but he just crazy and it's insane. And the fact that you guys are growing even more is even crazier. But going back to just the fulfillment itself, after production finishes, sea fry will take a month to get to LA or even more. But now after the production finishes, okay, we get it directly transported to the Portless facility and after it arrives one or two days, it's shipping out already. The fulfillment time from picking and packing to arriving is usually on five to seven days, which is no different than a US standard. It's helped us improved a lot of customer service, customer waiting, and also cash flow as well. So it's truly amazing. Chris de Jong (19:07): That's great. I love to hear it. I want to ask you a little bit to the future. You'd mentioned this earlier in the conversation around being able to discover products and find things and learn things through automation and ChatGPT. As I have conversations with brand owners, they're starting to tell me about this next generation of founders of e-commerce brand owners that are "digitally native." How do you think owners and operators of brands are going to change in the next few years because of AI? What are the ways in which a brand is going to be made in the next few years and scaled up that it wasn't in the past 10 years? Yitai Geng (19:46): When it comes to AI, I try to not use it for my creative process because I firmly believe in that the human creative touch is always going to be superior than any AI at this moment. I don't know down the line, right? I want to be stubborn on that. I don't want to use AI for my creative endeavors, especially designing products or marketing. But AI has been super helpful when it comes to checking grabbers or copywriting. It helps us communicate better, but it also needs human direction. But the next biggest unlock is basically for owners and operators of the e-com space. I truly believe in just TikTok shop and onboarding a lot of creators. I feel like those are going to help all the businesses scale tremendously. It's all about contents now. For example, the things we're doing, podcasts, you guys are using these pieces of contents for marketing efforts to post on LinkedIn, Instagram to get more reach, more following. (20:43): It's all about contents at the end of the day. I think e-com, just like a big marketing agency now, you got to create a marketing agency that sells products. I think that's the belief a successful e-com owner should have. Chris de Jong (20:57): I totally agree with you. Yeah. And I see this a lot with brands we speak to every day. It's like, yes, they're an agency that happens to sell some physical products versus a company that sells physical products that happens to be good at marketing. I was chatting with another one of our partners about this platform called Tribe the other day, and they were telling me, "Oh, I'm having so much success with Tribe and it's helping me find so many creators and get content into market really quick, and that's what's fueling our growth." And I said, "Maybe we should be doing that." Yitai Geng (21:27): Actually, that's what we do too. We have a lot of creators that we work with on Tribe, and I think it's about content volume. You guys should definitely look into onboarding creators to help promote because one person's effort is limited. Two people can double, but let's say you have a creator army, then that would be insane. Chris de Jong (21:46): I hear you 100%, and it's something we are definitely leaning into a lot here at Portless because where are e-commerce brand owners? Well, they're on the platforms that their customers use, which are TikTok, Meta. You're not going to catch them for the most part on LinkedIn. You're going to catch them on platforms where they exist and where they do their business. So any other predictions for the next couple years? What do you see changing in e-commerce? What do you think is going to become more or less valuable in the years to come? Yitai Geng (22:18): I think consumers are very educated because of AI and the internet. I think if you genuinely want to build a long-lasting brand, you really have to dig deep into your products, make sure they're made of good quality materials, make sure you actually care about your products because I generally think that customers can tell when a brand cares about the products. My equation is good products plus good contents equals success. It's very simple, and I think that's just going to be what it's like for the next few years, and maybe there'll be new platforms that we have to get used to and start onboarding, but basically it's got to be as fluid and flexible as possible as a brand owner and learn. Chris de Jong (23:00): Yes, the learning is nonstop. Maybe one last question I have for you, Yitai, which is you've mentioned product quality, and I talk to a lot of brand owners and everyone talks about product quality, but sometimes it feels like a little empty. How do you know when you're speaking to another operator that they truly care about their product? What are they going to say that signals to you that, oh, they're obsessed with their product? Yitai Geng (23:25): It's the intention behind every detail. Why did you choose this fabric? Why did you choose that stitching? And why did you choose this factory that you're working with? Why did you even choose the packaging? For example, the new leather jackets we're developing, we're going to have a full garment dust bag that comes with the packaging because we know that these jackets are so expensive to make and the fabrics hurt so good that we have to make sure it's protected in a garment dust bag. It's about the details. It's all about efforts. For example, when you guys find a partnership with other warehouses fulfillment centers, you can just tell from the bite. It's like, do they genuinely care? What are the things that they're doing? It's like what's the intention behind everything? And I think it's all about intentions. You can tell when people have good intentions. Chris de Jong (24:09): It's so true you say that. I went to a warehouse a few months ago and I was blown away that there was a cart in the middle of the pick and pack floor and it had a bunch of cubbies and every single one was color coded to the item that was in it, like scissors, box cutters, markers, and all of the materials were labeled that color as well. You look across the floor and you see a box cutter and you know exactly where it goes because it goes into the labeled box cutter that's the same cover. And it's like, wow, their intention to detail and the intentionality of why they made that color the choice they made to make it easy to know where it goes, that is a crazy attention to detail. Yitai Geng (24:50): Exactly. That just kind of shows that they're trustworthy as well because if they can put so much effort into small details like that, just think about the bigger things. 100% Chris de Jong (24:59): Agree. Okay. Well, Yitai, thank you so much for the conversation. It was a pleasure to learn from you, pleasure to hear more about the craftsmanship behind YITAI. Yitai Geng (25:08): Thank you so much for having me, Chris. It's a pleasure. Chris de Jong (25:11): Appreciate it. Thank you for listening to The Modern Supply Chain. If you have any questions about anything we've talked about, you can find me on LinkedIn. And if you're interested in learning more about Portless, check out our website at portless.com. As always, hit that follow button so you don't miss an episode. See you next time.