A New Era of Consumer Delivery in a Portless Perspective with Izzy Rosenzweig

Welcome to this episode of The Unnoticed Entrepreneur with me here, Jim James. We're going to Toronto today to meet Izzy Rosenzweig, who's built a business that I wish I had known about many years ago because it's in supply chain management and he's taking the pain out of shipping. Izzy, welcome to the show.

Very excited to be here, Jim.

Well, me too, because, you know, many, many years ago I used to import cars to China. And we used to put them in a big container and I used to go to Tianjin and pull these things out or drive these things out onto the docks and then go through customs and so on. And it was kind of the worst part of the business. Lots of capital tied up, lots of time, lots of bureaucracy. Now, Portless is a business that you've been building and now you're shipping millions of parcels every year for companies, direct to consumer, from China. So we're gonna talk about how you're really transforming the experience for both the company owner, but also for the consumer. Izzy, tell us about Portless because it just sounds like a miracle cure for supply chain management for entrepreneurs.

Yeah, absolutely. So first I started doing this as a brand myself. We shipped millions and millions of products as a brand in this model. And fundamentally what the idea is, Instead of a brand, let's say making 5,000 t-shirts, putting on a container, waiting anywhere from 30 to 60, sometimes 90 days to get to a port, then unload it. You bring in bulk, you got to pay import taxes, and then you're doing pick and pack to ship it to your customer in, let's say, 5 to 7 days. You could skip all of that, skip the boat, skip the container cost. If your values of goods under $80, there's no import duties. You could simply— we could ship on your behalf. We're basically a 3PL in China. We could pick, pack, send it to your customer in under 6 days. So instead of you waiting all that time, money tied up in inventory on the boat, we could give— ship it to your customer within 6 days in the United States with a fully local experience. Customer gets a USPS tracking number within 1 day of the order, and it gets delivered by a USPS driver. There's no Mandarin anywhere. It's fully fully American experience. Looks like it's coming from LA or New York or Chicago. And as a brand, no containers. You don't have inventory stock. You could always reload. We're next to your factories. And there's also, if the value of goods is under $80 to the United States, it's duty-free. So just a ton of benefits that we figured for ourselves. And now we help, you know, dozens and dozens of DTC brands leverage this model.

Yeah, Izzy, that sounds absolutely amazing. The obvious question has to be, why has no one done this before?

Yeah, it's a great question. So 2 parts to it. A, this model's been around for about 10 years, but it's only gotten really good the last 2 and a half years. The first 7 to 7 and a half years, it wasn't a great experience. It was long delivery times. There was Mandarin in your tracking number. Customers always get aggravated. Things weren't being updated. So what happened, we shipped millions of packages in that model. It wasn't good. The last two and a half years, it's gotten really good where not only is delivery times to United States under six days, but also the experience is 100% local. So you have brands doing this for themselves. There's companies like Shein, companies like Temu, which people don't like the quality of their stuff, and I agree a lot of the quality isn't good. But the magic is in supply chain. You as a brand, you own the quality. You own the what your packaging looks like. But the magic is in how's your cash flow, how long is your lead times, could you save money across the board? And that's what we help brands do.

That's fantastic, Izzy. And for anyone interested in looking at how this works, I think you've got a website as well that you're going to be showing people. I've just done a quick share, but Izzy is going to drive. And for those of you that are going to see this on YouTube, you can see an illustration. So, Portless, tell us though, how does the relationship between the, let's say it's an e-commerce provider, someone like my wife who's got a shop on Etsy, for example, it could be a bigger dropshipper or someone based in the US or the UK or anywhere across Europe. How are they preparing their client? Because normally you'd get the goods and you could see them and you can do quality control, but also you'd have some brand experience items, maybe a gift card or a special, you know, label.

Is he—

how are you taking care of, if you like, that whole feel-good around the brand part that people normally need?

And we take that part super seriously because we were a brand for, you know, 10 years. We understand it's all in the presentation, it's all the experience. So the first thing we tell people is Even though, yes, our headquarters and a fulfillment center is based in China, you have a full American experience or English experience. You're on Slack with our teams. Our teams speak English in China. Your account manager, it's, it's like we're next door to your brand. And, you know, in this virtual world, everyone's on Zoom. We're talking all the time. We're on Slack. And I'll give you an example. We had a customer that we onboarded. We used to just do their international business. And they said, we said, by the way, Your, your packaging has a logo on it. Why don't we go a little further? Why don't we make your brand look beautiful? So I actually give credit to their designers. We gave them some recommendations, but their designer came to us with a beautiful packaging design, lots of colors. If you would've made that design in the States, it would've been like very expensive, probably close to like 80 cents per envelope. We were able to manufacture it for about 15 cents per envelope, eco-recyclable envelope, gorgeous eco-friendly envelope. And what happened was his— we did the production for them. We managed it. We brought it in. All their products start going in that packaging. Their customers started to post the packaging more than the product. Like, hey, I finally got my product because the packaging was so beautiful. We have other customers that are in corporate gifting. Everything gets wrapped with red paper. So we understand brand presentation because we were a brand for 10 years and we take that part seriously. We work with the customer. We brainstorm like, how can we make your presentation better? What can we do? So that's about, we lean into that and to cover just what we mentioned before. So that's how we take care of the brand presentation. But if you look at the screen, and for anyone that's listening, I'll talk it through. But if you look at this supply chain historical model, in which I've lived this model too, your money is stuck in containers. Yeah. You have 6 months of inventory. Very often, it could be 90-day delivery if the ports are full versus in our model that we proved with ourselves for 10 years, 2 days post-production, you're turning that inventory to cash. So not only is your customer getting a great experience, but the brand side has inventory lead times instead of months to cash, it's days to cash. Instead of 4 months of inventory, you could reduce that probably to 4 weeks of inventory. We could constantly inbound for you. Instead of for people that wanted to go and sell in many markets, either it's very expensive shipping to ship from US to Australia or UK. In this model, it's very affordable. We can ship to UK for like $4.40, Australia about $6, $7. So all of a sudden you have an all-local experience. Australia Post, Royal Mail, DHL for Germany, Canada Post, USPS. So we give the ability to go international Very simple. You don't need to deal with the headaches of a 3PL. You have an American experience. You're moving your inventory to us within days post-production. If you're sending to the States, you have import tax savings, uh, if your value of goods is under $80, which is almost pretty much everyone we service. Um, so customer gets the same experience, better. We invest in packaging with you while you as a brand just get savings literally in every direction you look, right? From Cash flow, you know, savings, great shipping rates, great pick and pack rates, international access. It really is to us. We see e-commerce going this in the next 10 years if you like it or not.

Izzy, that's fantastic. Just for those of us that are not in the supply chain management business, what does 3PL stand for?

Third-party logistics. So where you could run your brand, we say you do what you do best. Which is branding, thinking of new types of products ideas, doing the marketing. With leveraging us and even QC, there's great companies like Factor Quality, you could really run your whole business out of China without the headache, without the fear of doing tons of money of inventory. So yeah, it's game changer.

Well, fantastic. And presumably what happens is if you've got a supplier, that you've found in China, maybe you found it on Taobao, for example, or on Alibaba, or you've used, you know, one of them like Made in China, the website, for example, um, you get the inventory shipped to your warehouses. Is that right, Izzy?

Exactly.

And then, and then, and does that connect to people's ordering systems? So if, if someone's got an Etsy store, for example, they've got product that's been sold, You've got some kind of EDI, electronic data interchange, have you, to help?

Exactly. So with like stuff like Etsy, Amazon, eBay, Walmart, direct integration. If you're on Shopify, we have a Shopify app, literally a 15-minute Zoom call, you're fully set up. And really what it is, it just sets us up as a location. You don't have to send all your inventory to us. You don't have to send all your orders to us, but we are a location, easy to access. You know, we have a call with someone, On Zoom, 2 days later, because their factories finished production, we had their product in, we inbound it, we scanned it. He's going, he's putting it to market, I think later today. So it's just such an agile way of looking at supply chain, something that people are just like, like, how does this make sense? Right? Like, how does this work? And that's it. This is the, to us, this is the future. It's a smaller world than we think. We can service customers everywhere and great delivery times.

Great. And so the genius in, if if I can simplify it for those of us that are not in supply chain management, is rather than doing bulk reduction, if you like, close to the customer, you're doing the sort of individualization of distribution and packaging in China and shipping it. So rather than shipping a bulk and then doing bulk breaking, is that right?

Exactly. If you look at the screen, I'll talk it through. Yeah, the traditional model, you're putting on a container, bringing it to the port, on a boat to another port, to a train, to a truck, to a 3PL to then inbound. In our scenario, it's factory to us getting inbounded on a plane, injected to LAX or the London, Australia, right to the customer. It's just a whole different supply chain.

Yeah. And when you look at the diagram, and those of you that are able to go to YouTube, you can see it. But those of you that can't really, you've got with Portless, you've really got the origination, you know, in China and you've got one airplane And then you've got the landing and then the last mile. Whereas, you know, as I found with shipping cars into China, you know, it was a huge amount of inventory, a huge amount of cash underwater, and so on and so forth. So fantastic. And presumably, Izzy, your team in China are taking the stress out of dealing with the local Chinese supplier because that can be one of the challenges is chasing up your goods and finding out with your logistics. provider in China, whether they've got the materials and whether it's boxed and shipping. Exactly.

So we have a full local team. Some customers need help with their factory relationships. Some customers are looking for new factories. We've been doing this for 10 years. We just have a ton of experience. We help people. Logistics is our core business, but if you need help outside of that, our team helps as well.

Izzy Rosenzweig, that's brilliant. I'm loving Portless already, and I can already see some businesses that I can imagine benefiting from it. As a business, you've mentioned, you know, that you've migrated from being a consumer business where you're importing your own products and selling into being B2B. Can you just tell us, you know, how you've been getting Portless noticed and what you've learned on the journey, if I can use that as a pun?

It's definitely a journey. So when I ran the consumer side of the business, I never put my face to the brand. It was always paid marketing. We had creators creating content for us, and then we would market those people to our customers. But now that my customer is different, right? My customer is no longer, let's call it retail consumers. It's actually business owners. So we have to change our strategy. Again, everyone's human, but where do they hang out? So I'm doing podcasts like yours, which I'm so excited to be on. I join communities which I contribute. How could I help? It doesn't even have to be about us in general. How can I help with marketing ideas? How can we help with packaging ideas, with cash flow ideas? So being a, providing content to the community, helping the community in general, and then putting content on LinkedIn and Twitter. So I'm always posting multiple times a week, interesting stuff about supply chain, either the history of supply chain, how people could look at supply chain differently. So between content, joining podcasts, Being a contributor to the community, that's been very helpful for us to get noticed.

Oh, how interesting. And in terms of the challenges that you found with Portless and maybe some of the broader challenges, for example, with perception of China, do you have to take a position as an entrepreneur to reassure your customers, or are you finding that building the Portless brand, you know, China on its own outside of the political, um, uh, sort of arena is possible?

We see it as 100% possible. Also, we say is we're not like, you know, end of the day, something could happen in China. We actually have operations in Vietnam as well, right? So that's— we have a lot of companies that are shifting their manufacturing from China to Vietnam, and that makes sense. But from our perspective, we see exporters to China as the most important Part of the Chinese economy. They're having a harder time in the real estate world right now. Export is really what's fueling that economy. And end of the day, the most sophisticated factories, the most sophisticated supply chain is out of China. So we're there. That's our main hub. That's where we're servicing our customers. But we actually have already Vietnam up and running. We're not taking in a ton of customers right now. Probably about 3 to 4 months, we'll start allowing customers that if you have some of your supply chain there, we can help you there as well. We're factory to consumer. We're not specifically only China to consumer.

Interesting, Izzy. And your background is also from a family of entrepreneurs, isn't it? So I'd love just to hear from you how the family has changed with the times because you've seen a sea change in the way that shipping— I keep using all these bad puns now, sea change— in the way shipping is done. Just tell us then a little bit on the family history side, and that's relevant just because of the way that your family has had to adapt to changes in trends in manufacturing and—

100%.

—consumers.

And for us, it's easy to forget how things were done, but there are times in business and economics and technology advancements that really do change industries. And I, as my family lived through it, so just like you said, context. My grandfather survived the Holocaust, came to Canada. He was on his own. He started working in a factory, eventually learned the business, started his own factory. Now, back in the early 1950s, there were hundreds of factories in Canada, even way more in the States. It was— factory was done local and everyone did well. Then what happened was the 1980s, containers became industrialized. So it's no longer just boats with boxes. It's everything in the container that changed the way people looked at manufacturing. And all of a sudden, so essentially there were 3 things happened to factories or manufacturers. They either refused to pivot and they went out of business and they had to do other things. They went niche because mass market was served by a better model, or they actually saw the curve. They jumped to be one of the first people and they partnered with factories, manufacturers, built their own many factories and did extremely well. So my, I went through that through the 1980s. Like I saw my grandfather started, my father took over and then they went very niche and they stayed and they were, around for 60+ years, but many people didn't. For me, I see this supply chain as 1980s all over again. Now, if you're in physical retail, you've gotta do boats. Boats is very effective. Lots of cash. It sucks. But if you wanna put it on a shelf to service the millions and millions of customers, that's what you gotta do. But if you're in e-commerce, you're in digital retail, it makes no sense. Why bring it in to then ship again? We could deliver it to your customer in the exact same timeline that you're doing it today. But you have all the benefits. You have way better cash flow. You're saving money potentially in import duties. You can serve international markets with just a click of a button on Shopify Markets. You don't need to pay container costs. Our shipping rates start at $4.49 for a quarter pound, $5.86 for half a pound. UK, Europe cheaper. Deliver within 6 days. So to me, it's, it's so crystal clear. Again, I happen to be doing this for 10 years. Last 3 years has given me the the trajectory of this business, this is going to change e-commerce. And now it doesn't mean you can't have some, uh, product locally to fulfill wholesale, you're doing FBA, but if you're doing the DDC part of your business, this is 1980s. It might take 5 to 10 years, but I hope and I encourage people— doesn't need to be us, but you should look at this model and leverage this model to run better cash flow and healthier businesses.

Right. And for those that aren't familiar, D2C, direct-to-consumer, right, Izzy?

Got it.

It sounds like you've really nailed it, but we've all got a little something that we've tried that hasn't worked from a marketing perspective, Izzy. As you know, I'm focusing on that on this show. Can you give us an example maybe of something that you've learned that you suggest, you know, that you wouldn't do again from a brand building perspective for Paulist?

Yeah, we had a really interesting learning, I would say specifically tying to our consumer brand. We were always told Google, Google, Google, this is where you've gotta live. Become an expert in Google. And we did. We spent money on Google every month over month, just pour more money into it. And then what we realized after a couple months was it really depends on your business, right? Because the people who are giving us this advice, their products or their services was intent-based products, intent-based services. So someone says, I need a new aluminum foil pan. Yes, very smart to market there. I need garbage bags. Very smart to market there. Our products were discovery products. They were unique products, interesting products. So no one searches unique because they've never seen it before. We had way more success on Facebook, Meta, Instagram, TikTok, Pinterest because those were discovery platforms. So for us, we poured a lot of money into Google. It wasn't— didn't have good ROI. And the lesson learned was every business is unique. Every business is different. Sure, take in advice, but then filter it and say, okay, does this make sense for you? And for us, Just matching, you know, discovery shopping versus intempe shopping was a big realization of where we should focus our efforts.

Yeah, I love that distinction. That's really, really helpful. Thank you, Izzy. In terms of, you know, you've built Portless now, you've got millions of goods being shipped every, every year and going all over the world. So you plan to be very successful. Is there something that you would say as a number one learning, um, that you would share with my fellow unnoticed entrepreneurs? You've kindly shared that, you know, Google wasn't the right place to be, but yeah, what about an overarching strategy that you found has worked for you as an entrepreneur and, and for Portless in the, in the recent years?

Great question. So it ties in actually to the Google story, which is not being afraid to fail. And you've got to be trying everything. So you've got to throw your darts. I don't regret pursuing Google. Learn quick and adapt and always learn from mistakes. Mistakes is part of that journey. But you've got to throw the darts because if you don't throw the darts, you don't know what's your main channel. We could have easily, you know, not for the B2B business, not pursue podcasts. We didn't think that would be successful for us to get noticed, but it actually has been really successful for us. So if you don't throw the darts, be okay to fail, be okay not to be successful. Nothing— not everyone needs to be grand slam, but when something works and you double down on it, that is usually very successful for your business. And I agree, like focus what works for you, but don't be afraid to fail and try other strategies.

Izzy Rosenzweig over in Toronto running Portless. If you wanna find out more about you and even look at your shipping, for example, plus you as an entrepreneur who you've plainly got so much insight, how can they find you?

Yeah, so first of all, our website portless.com. We have, we explain the business, there's a contact form, there's case studies, you know, We encourage people to check out our website, learn about us. Me personally, you can reach out on LinkedIn or Twitter. I'm very active in both those communities. I love posting content. I love engaging with other people's content. I answer every DM. So feel free to follow me there. If you want to talk to us, message me, look at our website. We're very reachable.

Izzy, thank you for accepting my invitation to come on the show and shedding a light on a whole new category of business operation and supply chain management. It's not something we've touched on before, but I can see how it just, transforms a business and a brand experience for a client. So that's why I wanted to get you on the show. Thank you so much for joining me today.

Thank you for having me, Jim. Thank you for helping me get noticed. So I definitely love your name of your podcast and thank you for having me. I really appreciate it.

Well, Izzy, you know, you're the kind of entrepreneur that is unnoticed but deserves to get noticed because you're doing amazing work that's transforming industries and not necessarily getting the recognition you deserve. That's why I'm really doing this. So—

Thank you. I appreciate it.

So we've been listening to Izzy Rosenzweig, and I'm really praying I've said his name correctly. Did I do okay?

Perfect.

Okay, perfect then. Wonderful. As you know, British, we're not famous for our pronunciation of anything really. If you've enjoyed this, then do please share it with a fellow unnoticed entrepreneur. And if you've got anyone doing shipping of goods from overseas, and I'm going to be telling my wife about this straight after this recording, then do let them know about this show and about Portless. And in the meantime, if you can review this show, that would really help us to get noticed. And until we meet again, I just encourage you to keep on communicating. Thank you for listening.

Thank you.