Episode 31: Big Dreams & Bigger Action with CEO Roman Sharf

Welcome to this episode of the Million Dollar Mastermind. I'm Larry Weidell and let's get started. We're back with Roman Scharf. And Roman, as we said, as somebody who started as an immigrant from Russia, started in a 400 square foot apartment in Brooklyn, went up through the ranks, worked every job, went in the army, went in college, got into the business world, working to Fortune 500 companies, VP at age 26 and then he left to start his own luxury watch and high end accessory company called luxury bazaar.com and you can find him by his name on YouTube. And we're going to, we asked him to come back and share some of the lessons that you know inside his own brain. What he how he sorted through climbing the ladder from going through college, getting in the business world, getting in the corporate thing and you know, mastering that world. But then say, you know, I want to fly myself, I want my own deal. And there's lessons you learn, you know, there's a great greater the risk, greater the reward. And we all know that cliche. But it's another thing when you're facing these big giants of obstacles in the face. And so all the way up to building basically $120 million company, help me welcome Roman Scharf back. Roman, thanks so much for coming back.

Hey Larry, I had a great time last time. Thanks for having me. Again, we can continue right where we left off. I had plenty more to say last time.

Yes, I'd like to continue that on and this time I want you to jump in with any of those thoughts. But I really want to get inside how you look at the world and how you look at opportunity, how you look at your day, your schedule, your time management, you know, how you look at making things happen, solving problems. You know, life is tough. Life is not going to lay down and just let you walk to the top. And every time you solve a problem or deal with a difficult situation, you can you separate yourself from all the people who would let that stop them and they never rise higher. But every problem you solve, every difficulty you go through allows you to, to move up to bigger and bigger levels of success. And you just have done that forever, man. So how do you make that happen?

Well, it's actually fairly easy. In the last show we discussed how I happen to have, I use a military term, sop, which is standard operating procedure. And I have that set up across my entire company for every department from shipping, receiving, qa, marketing, photography, content, along among other departments such as accounting and bookkeeping. So while the Company was growing. I was conscious of the fact I told you in the last show, I was always confident that I'm going to make it and I'm going to make it big. Even when I was a one man band out of my basement. So I set up the company in such a way that even when I was by myself, the company was departmentized, right? I was the head of every single department. As the company grew, I would hire on individuals that could take over an X amount of work from me. So when I found myself working 25 hours a day, I knew I needed help. I hired a couple of people. When I knew I needed more help, even with a couple of people working there, I hired more people. And as people filled in these positions, I quickly learned to do two things. Number one, not to micromanage everything. Otherwise I will not have enough time a day. That's extremely important. And a lot of managers and owners of businesses out there have a hard time letting go. Especially when you start a business from scratch by yourself, when you are every department. It took me a little bit to learn that, sometimes the hard way. But I quickly learned that I need to learn how to let go. And number one, not micromanage, but at the same time set up a system in place. Such as that when an employee or that I happen to hire for a particular position, doesn't matter what it is, can execute that position based on the procedures I set forth with an allowable margin of equity. And that allowable margin of error obviously will vary from department to department, right? In accounting, I don't allow for any error margins in logistics, shipping, receiving, there's going to be a margin error because everybody is human. But for the most part, what this allowed me to do is literally break up my time here at the office to percentages. So I know that I am going to spend an X amount of percentage of my time doing stuff with accounting and finance. I know I am going to spend a fair bit of time in marketing. My YouTube channel is actually part of that. It takes about five to six hours of my time per week. And that's really how I set up going forward. When I see that I get to a point where my time is now taken up to an access of the hours in the day. This is when I know it's time to let go of something else and bring on an individual to help and rely on their talent and their work ethics to carry this forward. All while allowing a certain margin of error. And with that margin of error, the procedures I've set up in place are such that if an error does happen in accounting, finance or marketing, I will easily catch that error and be able to come in and help fix it. So really, it's based on percentages. It's how much of my time is dedicated to which aspect of my business, while also obviously allowing me free time for creating new business opportunities. I travel a lot. I am out of the house about three months out of the year collectively, and I go as close as New York City, from Philadelphia and as far as Hong Kong. In fact, I'm going to be over the next two weeks, I'm going to be in Dubai and Oman, and after that I'm going to be. Well, I'm not going to be in Asia due to the coronavirus I was supposed to be. Then I'm going to fly out to London for a business meeting. So I'm all over the place. But I'm able to do a lot of things remotely and I have people in place that are able to pick up the slack if I am out of the office just the same.

Well, there's one thing I want to ask you about a business. So they say if you want to move your business, you got to move your body. And there's no substitute for being on site and seeing things with your own eyes. And is that why you're on the move? You're looking, you're evaluating, you're looking for fresh things to come in. What do you do when you travel?

It's actually very simple. For one, I'm lucky that my business is based on the world wide web. For the most part, when I am traveling, I'm traveling to trade shows where we're buying and selling goods just the same. But I managed to set a process in place where if tomorrow I leave for three months straight, not two weeks or one week out of the office, my business will continue running like a smooth machine. There may be some mistakes here and there that are not caught. I may not be there to be able to help somebody with an issue. But for the most part, my business can run itself without me because I now have people in place that I can rely on to do so, who I groomed from the very beginning. My employee retention rate is extremely great in comparison to any other company. Guys and girls that have started with me now almost 17 years ago are still, for the most part, here. And they grew as my business grew, so did they grow professionally, financially, and I ensure that I make sure that the work environment that I have is an extremely good work environment. People that work Here, they all want to work here and they come to work looking forward to come into work. Not place where they punch a clock and get a paycheck. I've had instances where I've had employees such as those that came in to punch a clock and do their bare minimum and get a paycheck. Those employees are no longer here. I told you before in the last show corporate environment with a family like feel. And that's what every single one employee here feels like. Down from the shipping guy to the guy that takes pictures all day long, to my executive staff, such as my CMO or my CLO or my coo. They all feel as if they're part of something big and a part of a big family.

How many employees do you have now?

Right now we're sitting at almost 30 employees at this point.

And are you still operating?

It's hard to measure. We do outsource a lot of work because we are the web. So a lot of the IT work is outsourced. Some of the content and marketing stuff is outsourced. If I counted every consultant out there that I use or freelance that I use out there, it's going to be way over 50. The core employees that are sitting in office in Philadelphia, you have 24 people sitting here. We have two people sitting in an office in Hong Kong as well. And we have a gentleman that sits in an office in Texas.

Yeah. And you talked about when you are doing, you know, it's hard to get those right employees and the right employee who can do the right job. Talk about some of your experiences with finding the right people and building your staff. Because you're never going to do anything great without a team and the right team. And those things don't happen all by themselves. A lot of people stall out. Roman, the reason I want to ask you about that, a lot of people stall out because they'll hire a few people. They get disappointing results, they get mad, they get frustrated.

I'll tell you a mistake that people make. There's a golden rule out there. It's called you get what you pay for. And oftentimes, as a company grows, what most employers and bosses tend to do is they tend to cheap out on people. The good old expression, you get what you pay for works. I didn't start growing my company from, let's say staff. That's a lower paid staff. A lower paid positions, I should say. Right. So some of the lowest paying positions I have are obviously going to be that of a shipping person, a receiving person, you know, or the doc, so to speak, right. But I started my company, the first employee I ever hired was a secretary. Right? Because that's something that everybody needs. An assistant, a secretary, somebody to pick up the phone and pick up some of the swag that takes away time. That secretary today is my sales manager. Her name is Anna. Her salary after 15 years with me is $500 a week, believe it or not. Of course her commission structure is much greater and she makes mid six figures at this point is about her compensation as a sales manager because she sells and she gets commission for that. After that I hired a coo. So imagine this, an owner, a secretary and a chief operating officer. This gentleman didn't come cheap to me. You mentioned on the first episode you mentioned Bloomberg, right? This is a gentleman that used to work Bloomberg and I used to commute to him to New York when I worked in Deutsche Bank. I commuted with him to New York for four years, two hours each way while he worked for Bloomberg and I worked for Deutsche Bank. He was just as successful at Bloomberg and I got him and hired him and paid him buku dollars because knew this could be my right hand man. This is a guy I can rely on. This is a guy who is intelligent enough to do the task that I have to do on a daily basis. And I let him then take over the internal management of the company based on processes that me and him came up with. And he's been with me for about 14 years at this point. So you have to, you always, always, always have to do not cheap out. A guy that walks in and asks for 10 bucks an hour to do whatever is not going to be the guy that comes in here and asks for a highest salary where he will do double the better job. I probably have one of the highest paid shipping staff in the world. I have a shipping person that all he does is ships boxes all day every day that makes an excess of $50,000 a year with a 401k plan with full dental and full medical. Yes, it's good to work for Luxury Bazaar. In case you guys are looking for work, you say, wow, how do you pay a guy that packs boxes that kind of money with those type of benefits? Well, one, this guy will do a job of three other shipping guys. This is a guy that will come in on a Sunday when need be, knowing there's a heavy load on my Monday of packaging over the weekend. This is a guy that's going to be concerned with saving me money on shipping rates, on saving me pennies, on packing material. This is a guy that's going to treat the shipping department as if it's his own as well as the company. And this is the biggest mistake a lot of entrepreneurs make. They expect people to do certain things for a small compensation. Instead, you start by looking for great talent. You compensate them well, and once you recognize that this is the talent that you want, you do everything and anything under the sun to ensure that they stay with you. Hence the employee retention. At my company, everybody that's here has been here for a long time. It's paid extremely well. They will never think about leaving this place and they will always treat it as if it's their own.

Now, Shifty, how about how much is it important that they hear from you? See, you feel like they're a part. You know, you talked about the family thing, but with the employees and the teamwork, what do you see as far as the different departments you've got? How do they interact with each other and how do you keep them where they all feel, with all the multiple departments, they all feel like they know where they're contributing to the mission of the team and they're part of a team, rather a segment. Because I've been in.

I use various tools for this. It's very simple. Today's day and age of technology, for example, we use a tool called asana, right? Which is a project management tool. Right. Attach management tool. So everybody's Asana. And the one thing I always ensure that from every single department, part of their job is reporting. I'm very big on reporting. I'm very big on numbers. And pretty much every department can report to me and does report to me on a weekly, sometimes bi weekly, sometimes even daily basis in regards to what went on in every single department. So I always have a clear picture. So I know how many items made it online today via content. I know what the results of the last marketing campaign was or the last email that went out. I know the results of every single YouTube video that I put out. Because two weeks later I get the analytics from our marketing team with, what do you call it, telling me, hey, this is what I think we should change. I talked to you about the last show in regards to dreaming big and taking small steps to get there. Well, I'll tell you another thing that I always say. Never set forth a task results of which you cannot measure. Otherwise it's pointless. So when I put a task or a project, whether it's short term, long term, one time, or ongoing, if I can't measure the result of that particular project, that particular task, that particular. Then it's as if the tree fell in the forest and nobody heard it. So reporting is a big part of running a successful company. If you don't have the data, if you don't have the information, you're not going to be able to clearly see. I'm not going to sit around, I'm not going to walk around my entire company the entire day, look into every single door and ask everybody what are they doing? It's called micromanagement, which is the worst. But setting up proper reporting within the company is what does it for me. And at the same token, I am still someone that has an open door policy. I know every single one of my employees by name. I know the name of their significant other. I know when their children are sick, I know when their birthdays are. I make sure I pay attention to all those things. Hence again, keeping that family environment all while having that corporate structure.

All right, and you talked about Asana. We use Asana in our office. You're big on reporting numbers, tracking the numbers. We all know what you can't expect, what you can't inspect and the activity that is measured grows. Let's talk about goals and growing the numbers. How you got up to went from a startup, how long did it take you and what was the evolution? Up to a hundred and eighteen million dollars a year business.

I would love to tell you that I'm the greatest businessperson in the world. But I think outside of hard work, obviously it takes a little bit of luck. But at the same token, and that came via the fact that the Internet was sort of the Klondike right at the time that I started, yes, at the time I started, the Internet was already full force. It was available, everybody was online, but nobody was yet selling these high end luxury goods. It was still taboo to sell a $10,000 item online. So I was, I was a part of a handful of guys out there that recognized an opportunity within the Internet space to be able to do that. And when you're one of the first at something, obviously that's when the luck factor comes in. That's what's going to allow you to grow. It was really the wholesale aspect. Five, six years into me being into the business, I decided to get into wholesale. And in my realm, wholesale is not what most people imagine. Where I sell the stuff by the container or necessarily volume, it's mostly considered to be B2B. So when I sell a single watch to yet another dealer that's considered to be Wholesale in my business. And it was with that that propelled my business to the next level for various reasons. Obviously volume of sales, obviously the ability to sell a lot more, and even in bulk, if you will. Right. But at the same token, it's the relationship that it created by going into the wholesale business, starting to attend trade shows, starting to get to know every dealer around the world, that opened up my horizons and the capability to grow my retail business. At the same time, it gave me a bigger cash flow, faster cash flow, and at the same token allowed me to grow the retail aspect of my business alongside with it. Because now there was more coming in, money going in, money going out, and a lot more product moving through. And I had access to a lot more product that I was able to sell retail just the same.

Well, I ask that because people that get into, they always think their business, their niche is unique and after a certain time they get tired of having to prospect and look for new clients and beat the bushes in marketing. But the other side of it is if you're not prospecting, if you're not advertising, you're not marketing. You're, you know, you're, it's, you know, you're going out of business essentially. And so other than do it online, what have you found and what, what percentage of your day? You talk about your day, what percentage and how much energy do you put into prospecting, marketing, getting new clients, new dealers, new wholesalers, what percent of that and how much do you like in a year? How much do you would those be new dealers would you like? Some fade away and others get added on or you have a high retention and you're just adding on a few more every year. How does that go?

Well, when it comes to wholesale, there are fly by operations, dealers that go in and out. So for the most part, you have about 70 to 80% of people in this business. They stick around and you continually do business with them throughout the years. As long as you're around, as far as your first question, as far as marketing, I do spend about 20 to 25% of my time a day, some sort of marketing effort. Every YouTube video I tape is a marketing effort. I always, every single day, I talk to my chief of marketing on a daily basis. I review marketing campaigns, I look at the results of previous campaigns. We always brainstorm to come up with new ideas pretty much daily. This is always a moving target. It doesn't stop. When it comes to marketing today. I can give you guys one advice if you're listening, and that is the three Cs. And the three Cs stand for creative content consistently. Right. And creative today translates. Creative content today translates to media, right? Social media mainly, obviously, for online businesses, as well as various other types of media. There are magazines, there are billboards and things of that nature. Creative today translates to. To strictly video content. Because without video content today, you're dead in the water. Pretty pictures. Don't do it anymore. If you're scrolling through your feed, whether you do on Instagram or Facebook, the only thing that catches your eyes is usually skin. And a video that catches your attention, a creative video. And then consistently is the most important out of the three C's. Consistency. If you don't put out content consistently and you don't stay in your existing customer space or potentially a new customer space, you will be forgotten about. You cannot get away from doing that today. If you're not in people's face all day, every day, 24 hours a day, you will be forgotten or you will not be found. And there's a lot of competition in this space, specifically when you're talking about the world Wide Web, even in a niche business such as mine, of watches, jewelry and accessories. And again, what separates you from the next guy is how creative and consistent your marketing is.

Fantastic. Thanks so much, Roman. Great content, wide variety of subjects. What I'd like to do is to ask you, when you think back on the podcast that you've done, what is one thing that really stands out that you'd like to cover and you think does people the most good to hear from you and to the biggest thing to learn from your success?

Less talking and more doing. I have, especially since I started my YouTube channel a year ago. I probably get 20 to 30 emails a day. Hey, I want to get into the watch business. I want to do what you do. This seems exciting and glamorous and you're making all this money and you're living so well and so on and so forth. And 99 or 95% of those guys will go out there, buy themselves some motivational posters, hang it up on their wall, and dream about owning a Ferrari and never will. I always tell people, if you are dreaming of something, I absolutely encourage everyone to dream and dream big. This is what I do till this day. No matter how successful I am going to get, I'm going to continue dreaming bigger, right? But get off your couch, throw the motivational poster in the trash and do something about it. And I don't care what business you want to get into. There are always ways to get out to hit the pavement regardless of how much money you have, who you know, and to give yourself an opportunity to get into whatever business you want to do as long as you put in the hours. And I don't care if you're stuck in a 9 to 5 job. When I worked at Deutsche bank, guess what my commute was four hours a day. All right. And I had a demand job. I was in charge of their global and local payment systems which processed it to the 2 to 40 billion dollars a month was a job that was so demanding that sometimes I was up all night and then at 5am I would get up the next day, get on the train, go back to New York City and spend another eight hours in the office and take another two hours to come back. And then I would sit in the middle of the night and update listings on my ebay store while running my business part time. So this isn't impossible if you're willing to put in the hours. Like I said, throw away the motivational post and just get out and do it.

Thanks. Thanks so much Roman. This has been priceless. I wish you all the best. I want to encourage everyone to go to his website, luxurybazaar.com go check out his YouTube lot to be learned from from Roman. And a lot of great bargains. What are some of the just to give people a little taste for what they would find on luxurybazaar.com what kind of brands, what kind of accessories, things like that. I don't think we've said more than watches.

When I started my business, it all started with watches for me. But when I named my business, I didn't name it luxury watches. I named it luxury bazaar. Right? Bazaar with another word for marketplace. Right? Just sounded fancy, had a nice ring to it. And my motto, I came up with that motto from the day I started working. It says a place where nothing is ordinary. And in reality what you can find today is you can find watches that start at $100 all the way up to a million dollars. You can find jewelry that starts with a $80 ring all the way up to a half a million dollar necklace. You can find high end accessories from major brand names such as $2,000 Pens or $100 Pens. So there's a little bit for everybody. But at the end of the day you're still going to be purchasing a luxury item. And my whole goal has always been the same is bring luxury to people at a highest possible discount. So some of the stuff you'll find there is pretty much Wholesale pricing. We're not your local mom and pop jewelry shop, remember, we're the guys that sell to your local mom and pop jewelry shop. So when you log onto our website and you see some of the pricing that's on there, whether it's jewelry, watches, pens, sunglasses, or whatever it may be, you'll find it pretty shocking.

And I brought that up for purpose, Roman, and that is the more specific you are, the more dynamic you can be. And so rather than just dreaming in, you know, I like to get my spouse a nice watch for Christmas or birthday or whatever, you know, or, you know, whoever. Go on there, look around, let your mind dance around and find something that maybe you thought was just out of the, out of the ballpark and find out, yes, I could make that happen. Now you got a purpose. Now you got a specific thing to drive yourself. And, you know, all of that stuff causes you to be more engaged and to move up the ladder a lot faster, which is the purpose of this podcast and the purpose of I know Roman enjoys making money, but he enjoys helping people even more because those are the big payoffs in life and he would love to have more of y' all climb the ladder and duplicate the kind of success he's had. So, Roman, thanks so much for being with us. Thank you.

And I'm going to add one more thing, Larry, before I go, I'll add one more thing. Don't let the things that I sell on my website be the motivator of you becoming successful, because all those things are just material things. What's most important to me personally is the fact that by being successful, I'm able to provide wealth for my wife and three children of 18 years. And that's really my biggest motivator. Life. And it should be yours. So the toys that I sell on my website can simply be a reward for your success, but not the motivator.

Thanks for adding that. And also the people you employ, you know, the charities and the family, extended benefit, the ripple benefits of success are unlimited. Thanks so much, Roman. Thanks for listening to this episode of Million Dollar Mastermind with me, Larry Wydell. If I've helped you in any way, leave us a five star rating and review on Apple Podcasts. For more information like this, listen to our other Million Dollar Mastermind episodes and check out my Widel Academy YouTube channel and visit us on widelawnwinning. Com. I'm the Million Dollar Mastermind. And until next time, go.