E107: Omid Torkian

Richard Hill:
Hi there. I'm Richard Hill, the host of eCom@One. Welcome to episode 107. In this episode, I speak with Omid Torkian, co-founder of ShipBots, e-commerce retailer, and shipping and logistics expert who's been selling through his own store and work with hundreds of merchants' fulfillment for the last circa 20 years. Myself and Omid talked challenges in building a $20 million store, and specifics around increasing conversion rates, the biggest mistakes Omid sees retailers making right now, how can an e-commerce store business improve the delivery experience pre and post delivery, and Omid's thoughts on how he keeps his team happy through the ups and downs of e-commerce.

Richard Hill:
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Richard Hill:
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Richard Hill:
Hi, and welcome to another episode of eCom@One. Today's guest, Omid Torkian, co-founder of ShipBots. How are you doing, Omid?

Omid Torkian:
Good. Good. How about yourself?

Richard Hill:
I'm really good. I'm really good. I'm very jealous. We were doing the weather comparison just before we jumped on, and Omid coming out of Los Angeles, and obviously I am here in the not so sunny UK today. So let's crack on, shall we? So how did you end up in the world of shipping and e-commerce, Omid?

Omid Torkian:
Well, early... I have an interesting story, actually. I graduated college in 2000, and I was in a finance degree out of Cal State, Northridge, and I moved to New York thinking that I was going to work in the corporate world, in the finance world, and I actually worked there from 2002 to 2003, I worked across the street from the World Trade Center, so it was a remarkable time in history. 2003, I realized, the corporate world is not for me. I want to run my own business. Moved back home from New York to Los Angeles where I grew up. And I was just exploring things to do.

Omid Torkian:
And my friend at the time was selling products on eBay, and encouraged me to buy some products and sell on eBay. And I started out buying knickknacks. Back in 2003, anything online on eBay would sell. You could put up a pencil and it would sell. So it was interesting. And I started selling corporate gifts and knickknacks, and eventually that led into selling posters and wall decor online. And we did really well, we scaled, and in 2008, when things went sour in the economy, my business went down and I was struggling a bit until 2011, and that's when my partner and I got together and we started a company called Play Stores, selling apparel online. So we bought discount, closeout apparel from department stores and brands, and we started selling on marketplaces all over the world.

Omid Torkian:
First few years, we grew really fast. We quickly became eBay's largest apparel seller within a matter of three or four years. And through that, we actually leveraged some opportunities to work with brands like Levi's and Wrangler and Rent the Runway, which are some strong brands. And that's what segued us into the world of e-commerce fulfillment, and ShipBots was born during the pandemic.

Richard Hill:
Yeah. So do you still run the stores now, or is it all ShipBots now?

Omid Torkian:
We do. We do. We're still running the stores right now. It's a little bit more challenging now because of supply issues. Also, we do a lot of formal attire and a lot of work wear, and people stopped going to parties as much, so it's affected our business and supply chain has been an issue. So we firmly believe in the future of e-commerce fulfillment and the opportunity to leverage everything we've learned through the last 18 plus years, and help our clients with our knowledge, help them start their businesses and be successful as well.

Richard Hill:
Brilliant. So what would you say have been some of the biggest challenges you've had to overcome in the last few years then, to build the business to the size it is?

Omid Torkian:
The first challenge was recognizing the opportunity. And in 2012, apparel was the number one growing sector online. So basically recognizing the opportunity was our first challenge, and then finding the right formula for a business. I think any entrepreneur needs to figure out, what's the right business and how do I scale? And sometimes, you don't want to grow too fast, take on too much and you also don't want to move too slow and miss the opportunity, because the world of e-commerce moves a lot faster than traditional businesses.

Richard Hill:
Yeah. Doesn't it just? Doesn't it just? So the last, what have we got, 20 months or so during the pandemic, have you had any specific challenges or opportunities, do you think, in the last 20 months or so, that have really... Things that have come along maybe that, with the wrong mindset might have thrown you, but obviously, maybe you've had quite a lot of learnings this last 20 months or so, that have maybe turned things into an opportunity. Is there anything there that you could talk about?

Omid Torkian:
I think there's been a lot of opportunity for a lot of people, and we've leveraged that as well. I mean, you're well aware that the pandemic really changed a lot of different things, forced a lot of people to buy online, and I think a lot of people recognize, this is easy. Buying online is good. And there's a lot of information online for people. So I think what it really has done is given a lot of people the opportunity to start a business.

Omid Torkian:
For myself in e-commerce fulfillment, it's probably one of the hottest sectors right now, and the reason why we got into the business. And a lot of that is because there's a limited... I don't know how it is internationally, but domestically in the U.S., there is a shortage of warehouse space. So people are struggling to find space, and even if you do find space, it's hard to find.

Richard Hill:
Yeah. It's a premium right now.

Omid Torkian:
And you're paying a premium. So it's opened up the door for opportunity for us as a e-commerce fulfillment business, to be able to help and service people. And we can leverage... We still do quite a bit of volume of sales, so we could leverage all our deep discounts that we have. We were leveraging our... We have a pretty good lease in place here with our facility and leverage basically our relationships that we built through the years, to help us scale and bring in more business. So starting a business is never easy, but with the right plan, the right process, the right people, and a lot of determination.

Richard Hill:
Fun and games. So you're working on both sides. Obviously, a lot of our listeners are in e-commerce, but the majority are e-commerce store either owners, marketeers, we've got a lot of agencies jump on as well. But obviously you've got it from both sides. You've got the e-commerce side, you're a store owner and have been for some time, obviously, so you've got the ins and outs of packing your own boxes back in the day, to now shipping products all around the world. But maybe just in terms of your own stores, a couple more questions on that. What would you say are some things that our listers could implement? And when we think about conversion rates on a store, this is some of the things that I think quite often people don't spend time on looking at the conversion, and looking at improving the conversion, and whether that... There's a lot of different elements there, but what are some of the things that you've implemented or some of the things you would recommend to help improve conversion rates on a store?

Omid Torkian:
For us obviously having the right product, so having confidence in the right product, and being able to display the product correctly. Obviously pictures and descriptions are very much important. And at the end of the day, you have to have the confidence in your product, and your product has to tell a story. Your product has to solve a problem. And it has to be unique in nature. You can't just be something that everybody else has. So as long as your product solves a problem and is a good product, then a lot of times it the challenge is just getting it in front of the right people. And then once you get it in front of the right people, it'll sell itself. So word of mouth is huge in the world of e-commerce. And that's displayed through channels of social media, or just friends talking. So I think that the number one thing is, you have to have the right product, you have to believe in it, and your conversions might not be great in the beginning, but you have to find ways.

Richard Hill:
How do we find the great products, then? Is there anything... Obviously having the right product sounds... Okay, you can just get the right product, but anything there we can dive into? So if you're a fashion retailer, how do you find that next new product? Or how do you maybe negotiate a better deal for that product? Or how do you get... What would you say, going in a bit deeper into that, finding the right product? How do we find the right product?

Omid Torkian:
That's the biggest challenge, for many. It starts with an idea, and from there it goes to tweaking and communicating and taking surveys. And the one thing that I found out in business through my years of experience is, relationships are very important. Communication is very important, and having the right team to help you build and develop your product, and you can't be stubborn. If something's not working, you got to move on to the next thing. I've found that sometimes people are so set in their own mindset that this has to work this way, and they don't listen to analytics, they don't listen to the data. Business is a game of numbers. The numbers tell you the story, and you basically need ROI on your investments, you need ROI on your time.

Richard Hill:
I remember when I was importing for probably about nine, ten years, and it was PC component based products. So that would be keyboards, mice, anything that's in a computer, and internally you've got the hard drives, the memory, the CPU, the case, the fan, graphics card, memory sound card, all that jazz. And you find a product and we're talking about importing here, so it's a slight tangent, but to find that winner, it's not straightforward. And we would test different things and trying to find newer things, obviously different types of products have different margin, electronics are notoriously poor margin. Some are branded products particularly, whereas if you can create your own brand and you can import and find an actual source factory, obviously then you've got a whole other level of margin.

Richard Hill:
We would find products, some would win, some would win really big, and we had a container coming in every three or four days for probably about five years, I think. And I remember really well, we hit on digital photo frames. I don't know if you remember those.

Omid Torkian:
I remember.

Richard Hill:
I think most people have got one sat in a drawer somewhere that they never use now.

Omid Torkian:
Yeah. I thought it was a great idea. I don't know why.

Richard Hill:
Yeah. And we jumped on that one. And we're talking, I think I'm thinking about 12 years ago, because it was just before I set up the agency, maybe just about 12 years ago, and we got some samples. "Wow, these are great, these are great." We found the factory, we were negotiating with the factory, I met the factory owners, they flew out to Paris and I went to Paris, and we met and we agreed X, Y, Z. And it was absolute brilliant times, bringing in containers. It was costing us I think about 150 grand UK money, and we were doubling our money to trade, so it was 100% margin and everything. Then when we retailed it, we were making 200%, 300%. It was unbelievably good.

Richard Hill:
But what I'm driving at, it was quite a finite window, stepping back. We probably had a year of crazy money, of really good money, containers coming in, and it wasn't like we were brought a container and it made 10 grand, we were bringing in a container and making 200 grand a container sort of thing. And it was ridiculous. But then it was literally like the hammer came down and everybody had a digital photo frame, or it was a combination of, the margins just went. But I think getting in and out of certain trends, and getting in and out of certain products, that's the tricky bit, I think. What do you say to that? Because it is quite... Obviously you can find something and ride that wave, but then obviously you can get caught with the stock, you can get caught with overpriced stock and...

Omid Torkian:
And a similar thing, the mask craze. We had a client that went out and bought containers of masks. And if you look back early, when the pandemic started, you couldn't find a mask, it was a premium, and then quickly the supply just caught up, and then there was a surplus. So timing is everything. And recognizing the opportunity, recognizing where the market is lacking. My number one advice would be to be as unique as possible and as niche as possible, because I find that that's where our clients are a little bit more successful, in that they found the opportunity. Now, when it comes to my legacy business, the clothing Play Stores, we were able to provide designer apparel at a low price. And everybody likes designer clothing, and to be able to offer it at deep discounts is unique. And so that's really leveraging opportunities. And a lot of times, like you say, business is, you make money on the buy. When you're sourcing at the right price at the right quality, then you have the opportunity, and basically a competitive advantage against your competition.

Richard Hill:
Yeah. I think it's...

Omid Torkian:
And it comes down to marketing. You can have the best product in the world, you can have the best website in the world, and if nobody sees it, you can't sell it.

Richard Hill:
Yeah. Some great points there, Omid. I think you make your money when you buy, I think that's a real good takeaway there, because if you buy it right, we all know, if you buy things right there's margin there, ultimately, if there's things and it's really tight, you've got a bit of shipping, you've got a bit of lead time maybe, and things can change in that four, six weeks, and dollar rate, exchange rate, whatever may be only working on small margin when you buy it, and you've got that margin to with, and you've got some options then to sell, if... Obviously some of our listeners, they'll obviously have e-comm stores, but they'll also have that distribution channel, that reseller channel, where they're chopping the margin and selling on 10% of any container, 20%, 40% of any container straight out to distribution channel. Obviously you need that margin in there to do that, don't you? So what are some of the biggest mistakes then you see retails and e-commerce stores making right now?

Omid Torkian:
Well, obviously not being unique enough. Not understanding what it takes to survive in a business. I think a lot of people think that they can just buy a product, build a website, and that's it, and it's that easy. And it's not. It's not. You need to live and breathe your product, you need to figure out, what is your best channel of getting your product to the right person? And some of that might be eBay, Amazon marketplaces, and some businesses are happy with that.

Omid Torkian:
And that's another mistake people make, they think that they can put a product on Amazon, and Amazon's the biggest retailer in the world, and obviously it will sell. But it's not that easy. You need to build sales rank, and you build sales rank by... Amazon wants you to advertise that product. They want you to pay money to get it boosted in search results. And you may have to sacrifice profits for some time till you build sales rank ASIN on Amazon. And even at that point, you have to make sure you have a quality product, so you don't receive negative reviews and then go down in your sales rank. And then supply chain becomes a problem. So once you become successful, you have to make sure you keep enough in stock, because if you run out of stock, then you lose your sales rank.

Omid Torkian:
So those are... Understanding the proper mix between selling direct to consumer or selling directly on marketplaces, some of our retailers obviously try to sell B2B as well, and the dynamic of how that's changed through the years. So I think the biggest... I mean, the number one biggest mistake that I see is that people don't have a thorough plan in place. They're just taking everything one step at a time, and education through books, podcasts, and just talking to people in the industry, going to trade shows, really living and breathing what needs to be done before you take action.

Richard Hill:
I think this is typically what you see in this industry, and it's good or bad, because ultimately a lot of our listeners and a lot of e-commerce stores, they start in a bedroom somewhere, where somebody's going, "Do you know what? I might put a couple of those things on eBay." And then next thing we know, with so many stories we've had of different guests and a lot of... That's that's my experience, really. My experience was, every penny I have was on what we call a trestle table at a car boot stall 25 years ago, selling out of a van. We built that into about a £55 million turnover over business. But very, very different when you start to where you end up, or where you either sell or exit that business.

Richard Hill:
And I think most people start in the bedroom maybe, not always, but it's definitely a huge theme, and obviously what you're doing at that point won't... Your thinking and the way that you're marketing, obviously I couldn't continue... I couldn't have done £50 million going into a car boot stall. It's never going to happen. So obviously we had a distribution channel, we had resellers, we had e-commerce, we had retail stores, and different pricing, and we were importing then. And obviously at the beginning, I didn't even know how to spell importing, let alone do it.

Richard Hill:
So I think obviously that... Our listeners, you've got that trench of people that are maybe at the half million, maybe at the 5 million, maybe at the 10 million, maybe at £20 million per year, or per month, depending on where they are. But ultimately to get to that next stage, and I really like what you're saying there, I think going to trade shows is a real under-utilized... It's been difficult obviously over the last year or so with COVID, but I think obviously everything seems to be opening up more events. If the people you're mixing with and the people you're chatting to are already there, and you've got those peers that you're just... Trade shows are great. Great, great, great places, I think, to get that inspiration, see what other people are doing in the industry. There's always going to be somebody doing more than you, which is great, and take that as inspiration, I think.

Richard Hill:
So let's talk about delivery side of your business then. So obviously fulfillment, delivery, huge part of every single e-commerce store, without a shadow of a doubt. We can sell things, but we've got to get them out the door, haven't we? So it's such an important part and parcel of everything. So what are some things that you would say that our listeners should be thinking about, to improve that experience pre and post order?

Omid Torkian:
You obviously want to create the best shipping experience as possible, and that means getting the product in the hands of the customer as fast as possible. So in my opinion, leveraging a 3PL or a fulfillment center obviously can help improve the experience by taking what we call the dirty work out of your hands, so you can focus on sales and marketing, the things that you want to do, and customer service and communication. So obviously what we found is, getting the product out as fast as possible, notifying the customer that it's sent out, and providing the best tracking experience as well, and then following up after the fact of delivery to make sure everything is okay. Obviously a personal touch is always appreciated from customers, just to know that you're there. And your response rate from emails to you should be fairly quick. The quicker, the better. Obviously when you get successful, it becomes more of a challenge.

Omid Torkian:
Presentation and packaging as well. A lot of times people think that, when you get a package delivery, it feels like Christmas and you're opening up a present. That unboxing feeling, to create that best possible unboxing feeling. And having the right product. And also when it comes to business, if you're looking to re-target them in the future, communicating with them, to have them come back, or help them spread the word, or follow you on Instagram, or any ways that you can build your brand. Because ultimately that's what you're trying to do, is create a vision of your company. And that all works as far as your whole team, where it's customer service, or working with the right 3PL. It's all part of the package of building a brand.

Richard Hill:
Yeah. No, love it. So we've got that package out, we've delivered it. Do you think brands... And they've had a good experience, let's assume that package has been delivered, and it's packaged well, there's an experience element, there's maybe a personal element when they open it up, obviously depending on product. What else do you think e-commerce stores can do after that point, to build a longer relationship with the client, to maybe increase lifetime value with clients?

Omid Torkian:
Email marketing is huge, and obviously social media, if you can get them to follow you on social media, and present... Influencer marketing is a big deal, and it has been a big deal through the years, because people are influenced by other people's decisions. If you bought something from me and you had a good experience, you're more likely to tell somebody else that, "I got this great shirt from these guys, and you should buy from them." So obviously opening up the channels of communication and email marketing, without being too harassing them. I would say that would be my best.

Omid Torkian:
And ultimately it comes down to having the right product. If you have the right product and you're unique enough, people will find you.

Richard Hill:
Yeah. No, like it. Thank you very much. So I think we also get people that are starting their journey listening to the podcast. I think we get a lot of very established e-commerce stores, but we get a lot of aspiring entrepreneurs coming on that are... They're starting on their journey. And what advice would you give to them? Obviously you've built a few businesses over the years, very successfully. What advice would you give to those guys?

Omid Torkian:
Well, perseverance. You're going to hit roadblocks. You're going to hit challenging times. No matter if it's in the beginning, or if it's in the future, things will get tough. You have to be strong, and you have to will your way to success. And you do that through networking, through learning, through reading, education, analytics. One thing that we've been successful... One of the reasons why we've been successful as a business is that we have very accurate reporting. We look at our sales figures every day. We look at our efficiency of our employees every day, and we offer incentives to our employees to work harder. And it really comes down to building the right team and having the right vision and the right plan. We talked about having the right plan.

Omid Torkian:
But ultimately if you have the right business plan in place, and you have the right mindset, and you're willing to take the blows that business will give you through the years, you'll be fine. You just have to fight through it and keep adapting to change. You talked about, things change really fast. A digital frame is hot right now, but next year there's the next big thing. So can you be ahead of that? A successful business is always a changing business.

Richard Hill:
Embracing the change, and really having that resilience there is a real key thing. You talked about team, and obviously I know you've got various different teams in your different businesses, but what are some of the things you've done and that's worked for you, managing your team and keeping a happy team?

Omid Torkian:
Communication, incentive and motivation. We all want to be successful. Most of us want to move up and do big things. Our goal as the company understands our mission statement, they understand their role within the company. Everybody wants to be... It's not always monetary for everybody. They want to feel like they're part of something big, something that can basically make an impact on the world. So I believe that our goal is to improve communication with our employees. The bottom line is, I want to make sure that every single person that comes to work is happy to come to work. And a lot of that comes from the belief in me as a leader of the company. A lot of people feed off... My managers feed off of my energy and my passion, and I hope that they instill that same passion in their employees. And it's pretty easy when things are growing and things are improving, and sometimes it's hard, it's really challenging when things are in decline, and people get worried.

Omid Torkian:
So I would really suggest having a plan and communicating that plan to your employees, and making sure that they feed off of that energy and really understand what the vision is. What's the light at the end of the tunnel? What are we all working for? Without that motivation and that incentive through communication, it's really hard to build a team without that.

Richard Hill:
I mean, I think that is brilliant. I think that is brilliant. I've been doing this a while, and I would say to anybody that's listening right now, to just pause the episode and rewind it. That last minute. I'm a massive believer of what you've just said there, absolute massive. And I am actually tomorrow delivering a vision presentation to our whole team. Just purely timing. And what you said there, obviously when things are good, they're good, but things aren't good all the time. Every business owner that is on this call, and every marketeer, but business owner definitely, obviously it's not a straight line all the way. "Oh, Jesus, we've just lost a lot." That happens.

Richard Hill:
I had somebody else on that lost a lot, but he's now got 450 staff, but he didn't just go straight to 450 staff, he lost about 50 million in the process. And that's life. But when things are tough, communicating to the team is more important than ever, because people will worry, will panic, and that type of thing. And rightly so, in some instances. But having that continued communication, I think is great. It's great advice. Brilliant.

Richard Hill:
So future, let's have a little look at the future. If we were to get you back on in 18 months' time, which is... It's like cat years, e-commerce years. 18 months in the real world is probably like five, seven years in bricks and mortar, maybe. So e-commerce, 18 months' time. What are some of the things you think we'll be looking at and we'll be talking about? What does the future hold for the next 18 months?

Omid Torkian:
I think we're only scratching the service of e-commerce. I think things are going to get bigger and bigger and bigger, and we're going to buy more products, we're going to live more online, more than we do now. And I honestly... From personal experience, like going to the mall, I don't want to scramble looking for parking, I don't want to go into a store where I can't find a customer service agent, and when you look at it, the brilliance of e-commerce is, there's so much information in front of us. And I believe that we're going to improve that even more. We'll have so much education as far as what we're buying, and we'll have the very best products. I believe that there's going to be even more price wars, price sensitivity.

Omid Torkian:
I'm very curious to see what happens with advertising, because the recent trend that we've seen, it's becoming more and more costly to advertise, because as e-commerce grows, Google advertising is more expensive, it's more expensive to advertise on Facebook. So I think the strong will survive, and you'll have a lot of businesses come and go, because right now you have a lot of aspiring entrepreneurs going online. So I'm very curious. I'm very curious what's going to happen. I can't tell you specifically what's going to happen, but I know we're going to see some big change in the next 18 months and more products and more dependence.

Richard Hill:
Do you not like going to the mall, then? You don't like it, or you do like it?

Omid Torkian:
I refuse to go to the mall. I refuse it.

Richard Hill:
I like it. I don't like the madness of parking and that sort of description, but I like that physical thing. Obviously I love to be able to one-click and buy and then wake up tomorrow and my thing is here as well, but I do like those... It's not like I want to go shopping every day, but when I do sometimes, whether that's once a month or once a... I do like to go to the shopping centers, as we call them here in the UK, outlets, that type of thing, and have an afternoon, bit of an adventure. Adventure sounds a bit extreme, but have a nice lunch when we're there, and try a few things on. I don't think that'll ever disappear. I hope it doesn't, and obviously I'm an e-comm guy through and through. It's my life for 25 years. But I do hope you're still going for more than 18 months.

Omid Torkian:
The word is that the mall... I mean, retail stores will be more showrooms. So all major brands will have online presence and online sales, and the stores will act more as a way to see the product and potentially streamline, especially with the way real estate is going here in the U.S. and locally in Los Angeles, it's very expensive, and the overhead of maintaining employees... So when you have something like e-commerce that's so efficient, and you can sell to the world, not only your local demographic, then obviously you're leveraging a bigger pool of people. And for me personally, I'm saving time. It gives me the opportunity to spend more time with my kids, listen to your podcast, do more fun stuff. For me, battling the lines at the mall is not fun.

Richard Hill:
Yeah. If you're listening to the podcast, then screw the mall. So I like to end every episode with a book recommendation. Omid, what book would you recommend to our listeners?

Omid Torkian:
I got three I wrote down for us. I just finished a book called Own The Day, Own Your Life by Aubrey Marcus, which I highly recommend. Another book is How To Make... I don't know if I could say this word, but S-H-I-T Happen by Sean Whalen.

Richard Hill:
Okay.

Omid Torkian:
Very short and sweet book, two hours. Sean is amazing. Big fan of his. The One Thing by Gary Keller and Jay Papasan. The one theme between all these books is just really being high octane as an entrepreneur, taking advantage of everything that's afforded to us, taking care of your body, taking care of your mental wellbeing, as far as... Everything I do is about having clarity, and I think that's so important as an entrepreneur, to have the right mindset to help you be successful, make the right decisions, and run a successful business.

Richard Hill:
Thank you, Omid. It's been an absolute pleasure. Brilliant.

Omid Torkian:
Likewise. It was very nice, very fun doing this, and thank you so much for having me.

Richard Hill:
No problem. Thank you for being a guest on eCom@One. I'll speak to you soon.

Omid Torkian:
Great. Take care.

Richard Hill:
Thank you for listening to the eCom@One e-commerce podcast. If you enjoyed today's show, please hit subscribe and don't forget to sign up to our e-commerce newsletter, and leave us a review on iTunes. This podcast has been brought to you by our team here at eComOne, the e-commerce marketing agency.