Episode 343: The Next $100M Distributor Will Have 10 Employees (with iPromo's Leo Friedman)

What happens when a 17 year old immigrant from Russia discovers promo, falls in love with e commerce, and then spends the next two decades reimagining how people buy branded merch? What does it take to build a modern e commerce business while fiercely focused on the buyer? And what role will AI play in shaping the future of this industry in e commerce in particular? On today's show, we we're talking about all this modern e commerce, the shift in buyer behavior and SEO, and the impact AI will have on the distributor of tomorrow. Welcome to the Skewcast, the podcast for innovators and maverick thinkers in the branded merch space. My name is Bobby Lihue. I'm glad you're here. Our guest today is Leo Friedman, the founder and CEO of iProMo, a company that's quietly solved one of the industry's biggest challenges. Making custom products scalable, fast and accessible on demand. With 75 team members and deep roots in digital, Leo and his crew are shaping how brands engage with promo today and how they'll buy tomorrow. Today's episode is brought to you by us at CommonScu. Over 900 distributors powering 1.8 billion in network volume, rely on CommonScu's connected workflow. Process more orders, connect your team, and dramatically grow your sales. To learn how, visit commonsku.com now. Here's my chat with Leo. Leo, welcome to Skewcast.

Glad to be here.

I was so glad, man. You don't do these very often, so it's a real honor to have you join us.

It's a pleasure. I always respected your work and the insights you're able to pull out of leaders in our space.

Thank you for that. And speaking of, you made a really provocative statement I want to open with. You made the statement that the next hundred million dollar distributor with 10 employees or less is being launched right now. Why do you say that?

I mean, you got to look at our industry and you got to look at who the buyers are. The buyers want to talk to us less and less. You want to get everything done in minutes. Not a phone call, not a deep conversation. If there is a conversation to be had, they want to do it at their time, at their leisure, on demand. Yeah, look, AI agents today, I can't even tell the difference anymore. And I also can't tell the difference between an AI salesperson or AI customer service person because they're just so good. And the only time I find out they're AI, even with some of these larger companies is when I ask a really weird question. But it rarely happens. So I think unless there's an edge case a year from now, Think about where we were a year ago with AI. Think about where we're going to be in a year. Yep, it's snowballing. There's nothing that AI cannot do in terms of taking a basic order today. Now, what's stopping you from launching a company store, recommending inventory levels, putting logos, creating creative design. If you have a summer giveaway, instead of your logo just being out of product, it's a logo with some sunshine on it, with some clouds, with some grass, with some beach balls. It can do it all on the fly for you. Hey, we saw that you have a summer event coming up. Here's an idea for you. Some power banks with some beach balls on it and your logo done and shipped.

Are there specific. It almost seems like AI is touching every aspect of the business. I totally hear what you're saying. And when you said the. Really, the way you phrased it was wonderful because you're right. It's going to touch every area. It's going to touch creative, it's going to touch ops, it's going to touch sourcing everything.

Yeah, yeah.

How are you currently experimenting with AI?

I don't want to give away too much of what we're doing because I think it's a game changer, but it's everything from. Okay, so you have a dormant lead or a dormant account. Right. You can have an AI agent. Not saying we do, we don't. You can have an AI agent pull that account directly from Salesforce or from Common SKU and let's say that account is Intel. Okay. In every single month you have this AI agent, send a custom email with a custom product mockup of the month. One day it's a one month, it's a cap. Okay. The next month it's beach Fall. And it can also use your Zoom info. It can use the Internet to find relevant contacts and send an extra that idea or a service like a company store or an inventory program or a swag kit directly to a person responsible for that every month until they respond when it becomes an opportunity. Right. And this thing can do it all the time. And it can also research when this, this person posts on LinkedIn, knowing when they're online and ready and are more likely to respond. There's levels to this and AI can do that for you today.

Let's back up a little bit just so folks can get an understanding of who you are. And about IPROMO. How many employees do you have?

We have about 75 employees and growing.

Okay. And how, how does IPROMO differentiate itself in the market? What do your clients say about ipromo?

We're kind of our claim to fame with our clients. We do so many products on demand. We have over 500 products on demand. Everything from a custom pair of socks or an umbrella all the way to single custom Yeti or AirPod. And so our clients love us for that. And then obviously we're big online. Our sales reps and our account executives, we get a ton of inbound volume just from existing both paid media and organic media and social media. And we just have more clients than we know what to do with. Sometimes first world problems, but there's still a scalability question.

Right. So you have essentially solved the MOQ problem problem for virtually every category in the industry.

Pretty much. I don't think there's a category that we haven't solved for not AI. The automation has to be there to do it.

Yeah. I say that with immense respect because that has been the hardest thing to do and one of the hardest things to do in the industry. Right. Is to solve that problem in particular. And you have been so big in e commerce for so long. How long have you been doing this now?

Leo 2009. So this is year 26.

Yeah. How. And you were. You've seen a lot of changes. So you're someone who can really speak to as an expert to the e commerce landscape. How has it changed over the past probably three to four years in particular, most of us can probably see the big seismic changes from 15 years ago.

Right.

Think it's changing right now beneath us and also over the past maybe four or five, six years, I think from

the way people look for products they are because of AI and because of just evolution of who's searching and who's. Who are the buyers. People are no longer searching custom mugs or custom whatever power banks, they're asking questions. What are the best custom power banks to give away at an XYZ event to ABC audience. That's how it's transforming people. They're asking questions. And there was an amazing meme I saw the other day, said, you know, when I die, take my browser, you can look at my browser history, you can look at my bank account, you can look at anything you want. Just don't look at my chat GPT history because people treat it as a friend. People ask questions, they have the conversations. That's where we are as a society and that big time on search.

Yep. Yeah. So we are seeing probably the I don't know how you would speak to this. You're the expert, not me. In this category, we are seeing the absolute obliteration of SEO as we knew it.

I've been doing this since again. 99. It's changing so fast and you have to adapt. It's hot. People are buying people. People no longer will wait for an email for you with a coupon code unless you give it to them on the spot. Then they will actually bounce if you don't give them the coupon code on the spot. Like, what do you mean? I have to sign up to get 10% off? What? I had to do something to get the 10% off. Give me the email quote or I'm out. That's the big shift we're seeing. It's on demand. It's now it's high speed and it moves fast. Yeah.

So the Speed has changed. SEO has completely changed. We're all turning to ChatGPT for a more consultative type of sell. You have been in a very big part of the E commerce story in the industry through the years, a very successful story. And so I can see that AI is such a huge pivot for you and your team. Can you. How do you think AI will change the buyer? You've spoken on this a little bit, but how do you think AI will change the buyer in regards to their relationship with the distributor? Do you think the distributor model is changing?

I don't think it's quite there in terms of the distributor model changing. I think it's just going to be, again, one guy will be able to have a $10 million distributorship, no problem.

I believe that too.

I mean, those guys exist today, by the way. Yeah, but now we're talking even bigger and less work and work life balance. That's. I don't see. I'm looking five years out. I don't see any much changing. Look, I'm a big believer atoms over bits. So I think our industry is always gonna prevail. Yeah, but like a big change in buying, I think. Not much. Not yet.

Yeah, Yeah, I totally agree with you. I think the infrastructure is solid. I think the speed is just going to be unprecedented. And those who are jumping on AI and who are onto AI F are probably going to be way ahead of the pack. Let's talk a little bit about ipromo and Commons Q. So how are your team structured? I mean, you have this big E commerce engine. How does Commons Q help you with your particular team? Because there's not a lot of people that have An E commerce model like yours as a distributor, how do you, how do your team go to market? How do you align your teams? You align them around clients verticals.

It's mostly client size because we're first of all we're fully remote. So it's around size and expertise and skill set. We obviously have our program, pretty large program team and then of course we have the inbound lead qualification team that produces a lot of opportunities for the rest of our team. And so it's interesting, contrary to popular belief, the large E commerce players outside of I'm going to say four imprint and maybe a couple others, their website, even though it looks like a Shopify site or an Amazon site, it still functions as a lead gen engine more than anything. People request samples, people request virtual mockups, people request a download of their quote PDF. Those are all leads at varying, varying stage of qualification. Yeah. And so even though we do get a lot of orders online, majority of our revenue comes offline, right?

Yep.

But the initial touch was online.

Yeah, I, I've been saying this for a long time cause I Talked with someone, a 4imprint style company who, you know that that website is just the equivalent of a salesperson reaching out or an inbound coming in. And behind the scenes there is a very traditional, for lack of a better word, infrastructure to support that client as they grow. And a lot of the growth isn't happening necessarily through the front door, it's happening through door to the side door as you're working with clients and growing them. Is that right?

Absolutely. And I think what commons queue is doing where you guys are in essence allowing us to build little microsites with pop up stores with obviously company slash team stores on the fly is a game changer, right People again, people don't want to talk to us or I always go back and I tell my team this all the time. In a few years ago, United Airlines did a study of first class passengers. Okay. Do they want to be greeted? Do they want to be talked to? Do they want to have a VIP concierge experience at the airport? And they found it to be split exactly down the middle. Half of them wanted to be greeted. Hey, welcome Mr. Johnson. We're so glad you're flying United. Can we take your luggage? Can we help you? Do you want to. So do you want us to show you to the lounge? How can we help you? They had the full one of the full immersive experience and then the other half wanted to walk in, scan their boarding pass, sit at their seat and just Order one drink and talk to no one. And you have to cater to both sides.

Yeah, yeah. Shops have been a big part of your story. You already mentioned this program business is a big part of your story and how shops sort of made it simpler for you and your team. I mean, I remember you and I remember back in the day how painful it was to just launch a simple shop. It was pretty difficult back in the day. You had to customize everything.

Right.

The seamless workflow that commonsku set up, I'm sure that's helped more of your team jump into the shop business than before.

Even middle, relatively complicated store in under an hour, even 30 minutes for a client that might be spending 50 to 60,000 plus, that's a big deal. Yeah. And the other piece is, once you set up the store and they're all excited about the store, are they really looking at your margins that much? Because they're blown away that every item is configured the way they want. It's got a logo on it, it's fast, they're getting it off their plate. And we've been able to increase margins 5, 7% on some of the stores with zero pushback.

Yeah, I love that. That's great advice. What has been the biggest benefit for you and your team running your businesses? Speed, efficiency, workflow, Transparency. When we kind of do all but for you particularly, what is it that you value?

So obviously Commons Q got a lot of strength on the presentation side of things and I believe we're all visual creatures. The more excited you can get someone quickly and we obviously have thousands of clients and thousands of more coming in with comments. You were able to create visuals, whether it's a single product mockup or presentation or even a pop up store for them to preview quickly, which holds a lot more deals for us. Yeah.

Let's talk a little bit about Leo something, something that you mentioned. I know you're reluctant to talk about Leo, but I want to talk about you before we do that. Actually, there was something you shared at CEO. Some of that was a really cool piece of advice as far as onboarding teams and welcoming teams. You had this piece of advice you shared about something you do with new employees. And I forget what you called it, but it's something you visit with them.

Crouton meeting. Yeah.

Can you explain the Crouton meeting real quick, sir?

Basically every employee that comes on, I spend two hours with them. Usually it's two, two plus, even three plus employees at a time. I'll tell them the history of the company from 99 to present day. It's actually kind of fun to do it in two hours from the fourth year to focus on all the major things that happened. But the end of that meeting, once they're engaged and they heard the story of the company, I tell them that 60 days from their start date, I'm going to send a calendar invite to them for a one on one meeting. And I call, which I call the crouton meeting. The reason I call it the crouton meeting is because when you eat a soup and you put a few croutons in it in the first place, couple minutes, the croutons taste like the crouton. After like 20 minutes, it's crouton and a lot of soup. And after an hour or two, it's basically soup with a little hint of crouton. So I'd like to catch inbound employees when there's still croutons absorbed, having absorbed some of the soup. But they're not, they don't taste like the sweep yet. They still have the out. They still have the view of the outside looking in versus the inside looking out. And I asked them just three questions. What should I promo start doing? What should I promo stop doing? Which is dumb, annoying, redundant, and what should I promo continue doing as a double down on that we're really good at? And these conversations have been priceless because the feedback you get is just incredible because you go, well, I'm actually, I'm a crouton in a suit for 25 years. So I appreciate those conversations big time.

It's like you're getting consultant, you know, as well, you know, which is what you're doing. You're hiring people who are supposed to make you smarter. Anyways. That is fantastic advice. Yeah. I'm going to ask you a wild question. I'm going to go back to about Leo. Leo, where did you grow up?

I grew up in Russia. I came to the United States with mom and dad when I was 10. We moved to an area of Chicago where I was the only white kid on the basketball courts. It was all Puerto Rican families, black families, and I didn't know any different. I thought America was the greatest melting pot in the world. And then I went to like the rough and tumble Chicago public schools, metal detectors and gangs and all that good stuff. And then my dad delivered pizza to my mom clean nursing homes, and then fell into the promo world at 17. And it's been all right ever since.

Leo, that's an astounding story. The fact that you, what do you think that gift from your mom and dad, do you think, or you're growing up or your upbringing, how do you think that shapes into who I promised become and who you are today?

My mom and dad always told me, if you have your education and your hard work about you, and of course your health, you can be naked out on the street with nothing to your name and you'll be right where you need to be a year from that date. And so with that, I believe in taking risks and calculator risks, of course, especially now we've been doing it for so long where you take risks and you see what works. And you fail forward, if you fail, and if you succeed, you go hard at it. And so that, that's been the driving force behind my success. I'm nothing without my parents and my money's their money and infinitely grateful that I'm here and the way they brought

me up, what a beautiful story we have. I may be over indexing on my time. Do you have like two more minutes?

Yeah.

Okay. Okay. So what do you. I know you enjoy surfing when you're not working, which is kind of crazy, right? You, you grew up in Russia. You're, you're in Chicago, which is kind of landlocked a little bit, but you enjoy surfing. I've read a book, Barbarian Days by William Finnegan. I'm not a surfer. I'm in nowhere near surfing country, but it was one of the most beautiful books and stories. Why do you enjoy surfing so much?

I think it's the only time where my mind truly turns off you. It's just you, the ocean, nature, peace. And some of my greatest ideas come while surfing or waiting for the next wave. And it's just complete tranquility. You can't have your phone, nobody can call you. It's. It's just like people have been doing a version of surfing for thousands of years and it's just as primal as it gets. And it's. And it's kind of beautiful. And you also spots like from Costa Rica to Hawaii and you name it.

Yeah, that doesn't hurt, right? No, that's a great explanation. So you're known for being a pretty cerebral, heavy thinker. What are you reading lately? What's inspired you? Who are you reading? What are you listening to? Are there some things that you're passionate about right now?

Not to, you know, harp on this thing, but it's AI everything right now. I'm reading. Yeah. AI Driven Leader right now. Amazing book. Highly recommend it. It's only a year old and Even some of the stuff in it as a year old is, oh, yeah, we can do that now. Oh, and the future of you, it's just, but also it's. How do you, how do you escalate? How do you speed up adoption in your company around AI? Because here's the thing, some of these big companies, if they don't adopt AI, there's going to be a lot of room for us middle market distributors to really compete them.

Yeah.

But you also don't want the million dollar guys today that figure out how to automate 99% of their business to catch up to you.

Right.

So you gotta, you gotta defend both sides. And I think, I think, I think AI is what the Internet today is what the Internet was in 2001.

Yeah.

Think about how much progress we made in 25 years. But AI, think about where it's gonna be. It's the biggest shift in the world we've ever seen. And I. Yeah, it just is. Yeah, that's where my head is at today.

Yeah, I can appreciate that. Especially now, you as a leader. You don't want another Leo coming behind you, building a business, speaking.

No, no, they should, they, they. I, I'm all for competition.

I, I know you love that. So, speaking of, you're an inspiring person to encourage young entrepreneurs. I mean, your story is such an inspiring story. How would you encourage young entrepreneurs that are getting in the business now? Because we're seeing this wave of younger entrepreneurs entering the business as distributors. I'm sure a part of your business would be this auto. Your advice would be automation. But what would you say even to a young Leo entering this market in this unique time and place that we're at right now?

Number one, don't listen to dudes like me. Don't spend time going to like the Tony Robbins of the world and inspirational speakers and all this stuff, unless you're in a place in your life where you just can't get off your ass. Right. Do more. There's this term in entrepreneurship, fail forward. See what works. And if something's working, double down on that. Work really, really hard. Like there's no, there's no substitute for that. There's the luckier, the harder you work, the luckier you get day in and day out. And so that's my only advice. And think bigger. Always think bigger. You're at, you know, a $20,000 deal is as hard to get at the $5,000 deal, et cetera and et cetera. Just go. What's the saying? Few for the stars. Or if Casey land on the moon. So, yeah, just go. Go hard. Go at it. And you're gonna fail. And people are gonna see, maybe the trips, maybe they'll see a car, but they won't see the sleepless nights, the early mornings, the weekends. You didn't hang out with friends, and you don't hang out with friends, but you do. And it's fun. And the journey is always fun. Anyways, that's it. That's all I got.

I love that. One last thing. You're very optimistic about the future of the industry, are you? Even more so now than ever.

I am. I actually am. The digital noise is getting out of control. We spend.

Right.

Did I see? 9 hours on average on our phones. Something crazy. So if I hand you something that breaks through the noise of everything digital around you. Oh, yeah. That's posters, tv. You know, that, that's. That's meaningful to me. I'm going to remember that brand, that interaction, that moment. I couldn't be more bullish about Adams over bits today, specifically when it comes to us, what we do.

Yep.

So I'm excited.

I love it.

Yeah.

Love it. Adam's over bits. I'll be stealing that phrase from now on. Leo, thanks for joining, my friend. What an inspirational story. You have an amazing team. Thanks for always being willing to share insights like this, and we'll talk soon.

Appreciate you, Bobby. Take care. Bye.