Episode 226: Smart Sourcing with Isaac Hetzroni, Imprint Genius

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

Isaac Hetroni is the founder and CEO of Imprint Genius. Some of you might know Isaac's story. He founded the company as a freshman while attending the University of Florida back in 2016 and incubated his business there along with other students. In his words back then, quote, we're here to break things and take risks. And they did. 6 years later, he moved to Bali and is now leading a global team. He rebranded his company with a new vision, and they have a new direction all focused around smart sourcing, which is an interesting and bold move as a UVP because his mission sits right in the heart of the supply chain at a very complex time. An innovator by instinct, Isaac and his team focus on technology, sustainability, and demonstrating ROI with product through trackable measures. Hi friends, I'm Bobby LeHew, Chief Content Officer at Commonsku. We caught up with Isaac to talk about the vision behind his rebrand, what smart sourcing means today, how he defines his new company since it sits kind of outside the lines of traditional definitions, and his philosophy of work and life now that you can lead a global team from anywhere. Today's episode is brought to you by Commonsku, the work from anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more, visit commonskew.com. Now here's my chat with our good friend Isaac Etzroni. Isaac, welcome back, my friend. It's always so good to have you join us, and I've always been fascinated by your journey from the very beginning of your story, which I shared in the intro. Now you've gone through this whole new evolution of your brand What made you decide to rebrand? What's behind this new mission of yours?

Bobby, it's so great to see you as well. Always a pleasure being on the podcast. And yeah, we, we rebranded and it was, it was a really big decision. It was a really big project by the team, but super happy with how it overall came out. And we decided to rebrand because I felt like, you know, we evolved as a company and we changed a lot, especially with our service offering. And, you know, what makes us different, what makes us special. So we have a new focus on what we call smart sourcing. And what that is, is, you know, we're really becoming more of a, you know, sourcing agency, obviously, you know, within merchandising, but servicing, you know, new markets that we're really excited about. How does that—

how is it different from what you were doing before, Isaac? So when you say smart sourcing, what What's ironic is that some folks move away from being seen as a pure sourcing agency, whereas you're like, no, we're going to own this. What made you decide that? Was it just the global sourcing issues and challenges? Is the fact that you had clients that were driving the majority of your revenue, that that's why they tap into you? You get difficult sourcing? Like, what led to saying we're going to double down on the idea that we are smart strategic sourcers?

A lot of it came through the COVID right? So COVID hit, as you know, like it was a pretty hard time in the beginning within promotional products. So in order to survive, we were like, okay, well, what market is thriving? So what's interesting actually about COVID is that everyone in the promo industry kind of turned into like overseas sourcing companies. Everyone was sourcing PPE.

Right.

Yeah. And doing all this stuff.

Good point.

What we saw was, it was like, okay, everyone's sourcing PPE. This is going to be way too oversaturated. What other market needs sourcing help? And what we realized was that the e-commerce market and e-commerce brands needed sourcing help because so much of their supply chain was really thrown together. So we started doing sourcing and sourcing essentially the same types of products, right? Whether that be promotional product-esque or apparel, type products, but for brands and helping them in their times of need when they needed to, you know, solidify their supply chain and find new suppliers. And we were able to, you know, grow exponentially servicing this market. And we realized that we were, we were really strong with that market and really strong with overseas. And, you know, I think it's important to always look at what are your core competencies and core strengths. And obviously technology is a huge one for us.. But for me personally, I mean, my dad owns a factory in China, right? I grew up sourcing and dealing with China, dealing with manufacturing and supply chain. So to me, that's my core competency and being able to, you know, dive deep into that and finally have the opportunity to use this skillset as the main focus of the business. Ended up, you know, paying off.

Totally makes sense for you. Clarify for me who your market is. When you say the market, you identified that the market was struggling with sourcing. Give us an idea of who it is that you serve.

We're still split where we serve, you know, corporations, I'd say, you know, above 250 employees doing all their merchandising. We have our merch store platform, which I'll talk about later. And then for the e-commerce side, we're normally dealing with e-commerce brands that are doing between $1 and $15 million in sales. So they have a good amount of sales and revenue and they have a need for supply chain, but they aren't necessarily all there for how, you know, robust their supply chain is. They're always looking for new products. They're in high growth mode. And that's where, you know, having an external agency like us come in and help them, you know, with their production, with their fulfillment, with all of their sourcing needs. Becomes super helpful.

Are you saying that you expand outside of branded merch, or is it still all within the branded merch category?

So we're expanding outside of the branded merch category. What's fun about that is that we're starting to blend the lines of retail-grade products with merchandising and branded merch. And I think that has to do with a new type of customer. That's a new kind of demand. You know, customers nowadays, especially within brand merch, are looking for that ultra high-end product and that real true brand experience and products people are gonna keep. So by creating retail-grade products on the e-commerce side, we're able to, you know, pass over that supply chain over to the brand and merch side and create really, really unique products that aren't available industry-wide.

Speaking of e-commerce and technology, you in a sense were an incubator at— was it the University of Florida? Yeah. Uh, and you built your business from within that and became like— I remember you would develop some new tech tool and you would holler at me and walk me through it, and it would be amazing. And I think, wow, this is cool. And you almost had this incubator with other students that you developed. So you and your team have always sort of been, how can we think and do differently? When you mention e-commerce, like, what is it technology-wise that you're developing now and what have you been— what are you doubling down on with the tech that you've developed?

We started to really look at the industry and like, what— how are things moving and what was the most in-demand piece that was needed? And what we thought was, is that overall merchandise distribution, right, needed a rehaul and we found that if we could build a really, really strong merch platform and merch store platform, it could solve a lot of the problems that we were trying to solve in the beginning. So when we were starting off the company, right, me, like a little 18-year-old kid, knowing nothing about the industry, saying, "Hey, I'm going to change this industry. I'm going to innovate." You know, there were some problems that I wanted to solve. Some of the problems were, you know, most of all the products were boring. Low-quality products, people were throwing away products too much, there wasn't much enough trackability and overall ROI metrics. So we're like, okay, what's the one thing that we can create that might solve all these problems? And what we decided on was having an extremely strong emphasis on on-demand printing, as well as a really amazing user experience. For the customer to be able to, instead of get, get handed merchandise, to be able to pick merchandise and not just pick merchandise from a few options. Currently, we have over 100,000 products that we offer on demand for our swag stores.

Give me an idea of an ideal client for you.

An ideal client is someone who's looking to create high-end products and wants to really leverage, I'd say, hybrid-based supply chains as well.

So are these like, what sort of industries are they? What verticals are they? Are we talking insurance, technology? Where do you find you serve the most clients?

Yeah, I think we're— I'd say that within like our— within the corporate space, I'd say technology. They really value the higher-end products, being able to utilize our merchandise stores at a high level. They care about all the branding aspects, and they're able to understand the value of being able to utilize technology and then be able to distribute.

You recently moved to Bali. Congratulations. That's awesome. Thank you.

Why the move? I realized that I wanted us to be a sourcing agency. So with all the complications that were going on with China, I said, I want to be able to create a supply chain that was robust and that was differentiated. So I said, why not go move the company remote and work remotely from different unique countries around Asia for as long as I can and build out supply chains and visit factories and have fun doing it, right? So That's what I decided to do. So I spent 8 months traveling through Asia. I visited dozens of factories throughout Sri Lanka, Thailand, Cambodia, Turkey, Indonesia, et cetera, to be able to, you know, really have this unique value proposition that, you know, that maybe our competitors didn't have, as well as just kind of thinking ahead of the market as things are slowly, you know, moving away from China. Especially within apparel production. I want to be ahead of the game and understand the overall global supply chain. Now, why am I moving to Bali? Why am I, you know, living in Bali as like primary residence now? First off, it's awesome. It's just a beautiful place. But there's a fantastic expat community, tons and tons of e-commerce founders and brands. So we are actually around lots of new customers. Cool. We're closer, we have a large team in the Philippines, so being, you know, closer to them. And honestly, just being from a location standpoint, being in the same time zone as Asia where, you know, we can be sourcing products. I can go and do a day trip over, well, not right now, but to China, to Vietnam, to wherever we need for like a larger production to manage. And finally, time zone. So this is something that, you know, it's controversial, I guess., and people might think differently. They might think, oh my God, it must be so hard to run a company from Asia and having that different time zone. And my rebuttal to that is saying, no, it's actually a fantastic way to manage a good work-life balance. And what does that mean? What I try to do, right, is almost all the calls are at night. And so I work until maybe 3:00 AM and that's easy. I'm a younger guy. So I do that, but during the day when the sun's out, it's shining and you're having the, you know, you can go and truly enjoy the day and enjoy your life. And that same, those same hours that might be those late night hours where you're watching Netflix at home, like, no, you're out there, you're surfing, you're hanging out with friends, you're, you're doing, you're having that fantastic life balance. And then, you know, once the sun sets, that's when you start the work day, um, at least in the US. And I just found myself to be a whole lot happier. Doing that. And I think that, I think within our industry, we have at least distributors who don't have production in-house, right? Let's talk about that, that kind of classification. You have this flexibility where you own the business that is essentially middleman, right? Where you have complete flexibility and you can really work from anywhere. So why not go and travel and live your best life and do that while you can?

I love it. We have two topics there I want to unpack. One is more about this work-life balance, but let's go back a little bit to supply chain because You sort of came into the industry as like a non-industry person, right? You're this young kid coming out of college and you're like, I'm going to, we're going to upend this industry, right? I remember your energy around that, but you also did it in a very positive way. You had a very positive instead of a negative attitude. It was more, how do we completely transform this business? So you, in a sense, how do you see the supply chain lines as they're drawn now? Because supplier after supplier has told me that the lines have blurred. Right? Distributors, suppliers, the distinction between who they are, how they're sourcing has completely blurred. I'm sure that's just like in terms of the traditional industry structures, you're fairly agnostic about that. It doesn't really matter. It's— do you think in terms of cutting out manufacturers? Do you think in those terms? Are you just trying to source the best product you can?

I'd say, I mean, we still depend so heavily on, you know, the domestic suppliers in the industry. And I think that it's super important that we have this relationship from a supplier-distributor standpoint. That's what the industry was built off of. But what I would say is that the reason why, why we're sourcing abroad is to source different products, right? So it's to be able to offer products that aren't available in the industry, or else we would source them within the industry. A perfect example of that is high-end athletic wear. Right? It's very, very hard to produce high-end athletic wear as a corporate merchandise domestically. Right? And there just aren't that many good options. But being able to go overseas and, you know, I met with the factory for Lululemon and Alo and Adidas and Nike, and I was able to go and then now I have these supply chains built out and be able to produce those products at a high level that are full custom and create those experiences. You know, I would love for the industry to be able to adapt and offer these cool unique products. But it takes time. And that's how my business started. It was when we started off, it was all about just sourcing the most unique, coolest products that we could that weren't available through ASI. And, you know, it's kind of funny, everything kind of comes full circle. Yeah, that's cool.

I really respect your differentiation and your, and your healthy respect for the industry, right? It's not like you're, you're trying to cut anyone out. My question was asked poorly. It's more that you're trying to utilize the supply chain as it's built, because we do have an amazing supply chain in the industry. And then, then I can totally see your point on the high-end athletic. It's a great example. You go back to work-life balance for a minute. I loved your analogy and your story about the way, way we rethink the 12 buckets we have in a day or the 12 hours or whatever it is we have in a day, right? You've said those are 12 buckets that I'm going to do something a little different with. Is your team all over? Are they, where are they at? The US, in Asia?

And it doesn't matter. It doesn't matter at this point, but it's all over. We have a couple members in the US, a couple members in India, uh, majority of our team is in the Philippines. I know you had, you had, you had Rory on the other day. Yeah. Um, so, you know, good friends with him and Craig. Uh, I think they're doing great work for that as well, but it doesn't matter at this point, right? Especially everyone's, everyone's working from home. Um, you can find amazing talent anywhere, so Yeah, I love that. And I, I think having the spread out team also reinforces the fact that it's okay to go and travel and do what I kind of—

what I'm doing.

Yeah. Does your— does your— are—

is your team split up by specialty? So in the US they're working with clients, in Asia you have primarily your sourcing team, and, and then in the Philippines, do you have a lot of your support team there? Like, how's that structured out, or is there not that big of a delineation between those?

There is some delineation Right, so, you know, higher, like more complex, you know, marketing, branding, client-facing stuff, a lot of that's in the US, but we've found fantastic talent even for client-facing stuff overseas. Developments primarily in India, we just were able to find a really good essentially dev team out there that work with, and then Philippines for, you know, everything else. And Philippines has just really become a fantastic place for a lot of things that we need. As a promotional products company, you know?

It has, and Rory and Craig and them are doing some great work, great partners there. You've worked really hard at developing an eco-conscious company. What impact is sustainable sourcing having on your business today compared to when you first started?

Personally, I had to really rethink what sustainability meant within the promotional products industry. When I started off, I thought, okay, sustainability means sustainable manufacturing or sustainable materials. But what I've realized was that that's not necessarily the case. Okay. And again, this is not maybe a hot take.

Okay.

You can make a tote bag out of recycled hemp and you can make a tote bag out of the most unsustainable materials. But if the recycled hemp tote bag is thrown away, that's ultimately what's terrible about the industry and bad for the environment. Yeah. So we have to rethink what sustainability means. Sustainability and the problem within apparel or promotional products is the fact that so much of it is thrown away and it's not kept. And that mostly has to do with the fact that we're not giving people the choice of what they actually want. You go to a trade show, you get to pick from a table, you go to an event, you get sent an automatic item, whatever it is, you know, and you know how hard it is to, you know, even pick gifts out for, you know, your significant other. Like, how are brands supposed to go and pick out products for hundreds of different people or thousands of different people? Our viewpoint on it is utilizing print-on-demand and, you know, good e-commerce platforms and to give customers the true choice of swag, to let them pick, you know, from hundreds or thousands of products that are company branded, find the exact product that they're going to love and utilize, you know, that's high-end, et cetera, you know, send that directly to them. And more than likely they're going to go and keep that perfect product for them, whether that be a power bank or a nice backpack or a specific type of branded piece, you know, that's how we, how we stay eco-conscious within the industry. It's a similar stance that I think Patagonia takes, right? It's about, you know, hey, how are we going to be reusing? This product and how we're going to make it last.

How would you answer the pushback from a distributor that says something like, Isaac, I hear you, I respect what you're doing, I can see that, especially building the technology in to help handle that, but that doesn't scale for me. I still want to sell 20,000 hats to XYZ Corp.

I think that, you know, when I started off, I felt the same way. You know, it was always about kind of chasing those larger orders and sometimes you have to have your goals kind of be pushed to the side, or your morals in the way. And, but I found that especially after, you know, moving to Asia and I started, you know, finally having like, we had the stability within the company that we wanted. We had like those consistent revenues. We had, you know, I had this fantastic lifestyle in Bali for way cheaper. I stopped, you know, being in that rat race of, okay, we need to like always try to like, take on whatever orders we can to like make more money or meet all these goals. It kind of became like, okay, you know, we're comfortable now, but now we can pick projects that we care about. We can work with people that we like and we can focus on things that are, you know, are moving us in the right direction. So I think that maybe, you know, maybe it's hippie dippy Asia talking in me, but that's just how I feel. And it took me a while to figure that out.

I love it. You're talking about building a conscientious lifestyle and a conscientious business, and those two are not to be distinguished from because it blends very well, and I can see that in your life. How have you seen the customer change since you first started? Yeah, in particular regards to sustainability or maybe technology, however you want to answer that, but how have you seen the customer change?

Have you? I think that the customer is, is now realizing that all the headaches that normally come with swag management don't necessarily have to happen, right? And that, you know, used to have, you know, multiple people within larger companies having to manage SWAG and all that complexities with it. But now utilizing technology and automation, we're able to really streamline so much of what it means to manage SWAG. So I think that the customer is starting to adapt to that. They're starting to see that there's lots of options within the industry. They're starting to realize that, you know, it doesn't have to be such a headache. And they're starting to, you know, embrace newer technology and maybe that's, you know, younger people coming into the industry as well and just being so used to e-commerce and Amazon. So I think that the entire, you know, everyone needs to start thinking about, you know, how are we, you know, providing more than just a, providing more than just a bulk purchasing solution. Yeah. And also it's also very relationship-based. I think that having technology. Well, having technology allows you to create a stronger relationship with the customer, and having technology allows you to have a proper end-to-end solution. So you can— what I realized before, you know, before we built out tech, was you're always kind of like almost fighting for the business, right? And you're competing on maybe on a pricing level, and you're competing against other vendors. But once you have a technology solution and you have an end-to-end solution, you don't have to fight anymore, right? You're just partnered with that company. They know they can go to you for everything and it just makes sense and it makes business a whole lot easier.

I actually got a question about your customer. And here's the thing that I didn't even know I was going to ask you this and you didn't know I was going to ask you this question, because now that you're sourcing in China, and in Asia and just all over. Are you partnering with distributors now?

So we are, we're starting to— okay, all right. We're starting to merge a little bit, working with, you know, other distributors, helping them out with their sourcing, working with even some of our decorators and helping, you know, as, as, as there became blockages of like, okay, we can't get these, you know, pieces to decorate on, we're kind of coming in and helping them out as well, helping with their sourcing. And then we're not trying to cut out the suppliers in any capacity. It just really became like there just still is a need for these kinds of services.

Well, and that brings up the question when we were talking about customers earlier, there was some ambiguity around who your customer is, and that's because you're figuring that out. You suddenly, you're in the middle of this strange business model now, like you always are in the middle of a strange business model. And you're, am I wrong? Like you're trying to figure it out. Maybe it's a little ambiguous because you have different options available to you.

100%. I'd say we're a little confused on who our customer is. Right. You know, you get pulled in different directions. I mean, we obviously have the legacy business and we, I think we built that really great Swag Store solution, but, you know, the revenues can't lie when it talks about working with e-commerce brands. And I think that there's just, there's such a. Such an open market right now, and there's such a need for sourcing and supply chain that we're just kind of like, we're starting to work with like aggregators and working with their brands. So I'm just having fun with it at this point, you know, it's source cool products and see how it works.

I love your positive enthusiasm because a lot of folks when they hear the word supply chain in this business are like, oh my The supply chain's a wreck. How do you feel about the supply chain in general now that you're in the middle of it? Um, you're closer to it than I am, and you're closer to it than the average distributor. And I know that's an overgeneralized question, and you actually have a solution that's in the middle of trying to solve supply chain problems, but would you say our supply chain is heading into healthier days? Um, stronger? Like, how would you see the supply chain now?

Yeah, I mean, so look, COVID absolutely wrecked the global supply chain, right? It really, really tested everything. And the ripple effects of COVID are still being shown within supply chain. And they're not going to be— they're slowly ending, but it's getting there, right? But what happened? I think that we're going to come out of COVID a lot stronger from a supply chain perspective. Brands are starting to realize that they need to— or any company needs to realize that they need to have a more robust supply chain overall. And I think that there needs to be— I think a lot of brands are focusing more on technology, right? So how can we utilize better technology for inventory projections, supply chain management overall, create more efficiencies within the business so that these kind of problems don't happen as much? I don't know if that answered your question.

Yeah, I hear you. And I also hear the, the fact that you're right in the middle of trying to figure this out as a part of your selling solution too. So it's a part of, in a sense, you can't help but be optimistic because that's your business model. I remember— so I had a question about Isaac because I remember, I'm thinking it was 4 or 5 years ago when you and I first met and you came to SKU Camp and your energy and enthusiasm was palpable. It still is. And everyone who met you, was impressed about what you were building and what you were doing, and mostly that your intention, you know, about the business and the industry was so strong. What would you say to Isaac Ketsroni 4, 5, 6, 7 years ago, now that you've had all this experience building the business? Do you have a couple of pieces of advice, of do's and don'ts?

Oh, that's a really good question. Yeah. Um, I would say that especially with, with technology and trying to scale, right? You have to really start picking partners and leveraging different partners to grow the business. And I think that, you know, we got kind of excited with the different, different partners that we could, we could utilize, and we started adding a lot to our business offerings. And those offerings were dependent on other people, right, other companies and. And I think that it's, it's not a smart move to be highly dependent on others as a core value prop, right? You need to manage your, manage your growth, manage your offering, or else it could be a very slippery slope. And we'd made the mistakes, you know, we made some serious mistakes growing. And, and well, what I would tell Isaac now is, you know, if you can, you know, once you understand something like like build in-house, have control, have backups so you can offer, you know, that truly amazing service to your customer and not, you know, hinder your brand or tarnish your brand due to, you know, mistakes of others.

Yeah, it sounds like you were at the mercy of a few very strong partners, whereas what you're talking about is diversification. 'Cause this business is, the beauty of this business is that you can live a very diversified business model where you're not— don't have all your eggs in one basket, and you have, like, as you said, backup solutions for supplier partners. Because a distributor, all their, their whole business revolves around dependency upon manufacturers, um, and of course they have this strong consultative side with clients. But what I think I hear you saying is diversify that base that you're partnering with and just be sure that you have a solid foundation with those partners.

Yeah, exactly. Diversification is a complicated subject, right? You want to diversify, but you don't want to over-diversify, and you want to still have focus. But I'd say those are probably the, you know, some of the biggest mistakes we made as a company, and I'm happy that we're, you know, we're getting them all fixed up.

What did you feel like you did right, and you would say to Isaac back then, double down on this?

I think we try to just have fun with things. Um, right, you know, just not, not take anything too, too seriously. And I mean that in a— and maybe that's not the best way to phrase it, but don't take anything that's, you know, set in stone, you know, as set in stone. Try to rethink what it means to be a promotional products company. Rethink what it means to develop our technology, rethink solutions, and just enjoy the process, right? Because, you know, being an entrepreneur and running a business, you know, the best times and the most enjoyable parts is the process. It's not necessarily even the big sales or the exit at the end. It's those late nights at the office with the team. It's thinking up new ideas. And that's been the most enjoyable part, you know, of having the business, it's a creative outlet. And I'm super happy that I was able to, you know, start the company in college where it was kind of like I could kind of play around. And now I'm, I continue to, you know, run my company as an incubator of sorts and just, you know, trying to have a good time.

I pick up on that Bali energy, savor the moment, understand what you enjoy, right? Running a business can be really, really hard, but also that's where you find the joy is in actually creating something something pretty special. I hear that, man. What are you doing when— what's Isaac doing when he's not running a business? Are you surfing? Are you like—

what's your, what's your, what's your world like? Yeah, surfing, being outdoors. But I'm also getting very fascinated on global supply chain. So I'm starting to actually create content to teach others about how to source overseas, how to source from different countries. Cool. What it's like, you know, how to work remotely and travel around the world and kind of, kind of do what I'm doing. Starting to speak at, you know, different conferences and events and host seminars, a lot of them within Bali, just to kind of, you know, teach people about this complex subject that I find super fascinating. And it's become, you know, really rewarding because I think when you can teach something, it's where— that's when you really start to build up that competency.

Yeah, that's a great point. Last question for you, Isaac.

What are you most excited about for the industry? I'm really excited to see the switch over to giving people what they actually want, right? And giving customers choice within merchandising. I'm loving the increase in quality that we're seeing throughout the industry, how thoughtful, you know, gifts are getting from gifting programs. And I'm really excited, you know, for this, this, this blend that's going on that, you know, we're trying to focus on as well is that blend between like full retail grade, um, products that are going into, into merchandising. Because again, give people something that's high quality that they pick and what they love, and they're going to keep it, you're going to keep it forever. And I guess that's the whole point of, you know, what we do.

Yeah. I love it. Isaac, thank you, my friend. You are like the worldwide man of mystery for many of us. And so, but not so mysterious because you're so approachable and always have always been so positive, enthusiastic about the business. And I love keeping up with what you're doing. So thanks for joining us and sharing your story.

Of course. And if anyone listening wants to come to Bali or live in Asia for a little while and want some help, you know, and wants to make that jump, Happy to reach out to me, happy to help, happy to tell you how I did it. You know, anyone can do it. You have kids, whatever it is, you can still do it, I promise.

Careful, Isaac, you might end up with me in your backyard over there in that Zen culture of Bali. All right, my friend, thanks for joining us, and I will see you again soon.

Thanks so much for tuning into this episode of Skucast. Be sure to keep up with our latest content content by subscribing to SKU Cast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.