August 23, 2019
Future of Geneva Supply – Strategies, Services and Logistics

Future of Geneva Supply – Strategies, Services and Logistics


– Jeff Peterson, Co-Founder,
CEO, Geneva Supply. With me is: – John Pistone, VP
E-Commerce, Geneva Supply. – That’s awesome. That probably barely
fits on a business card. – Barely.
It’s a lotta words. – It’s a lot of words.
– Lotta letters. – Lotta letters, lotta
words, lotta letters. – Totally. – So, hey, we’re here
today for 360 Delivered to talk a little bit about what we’re doing at Geneva Supply, as far as the different
divisions and things that we’ve been bringing on board. We brought John on,
specifically to head up, what traditionally you’d
call a Rep Division, but we’re doing it in a
non-traditional fashion. So, we kind of want to
explain some of the things. Obviously, with the changes
in Amazon through the years, and with the scare of the
purge, that’s going on, I wanted to kind of, bring
you on board and have you kind of talk a little bit about what that looks like as far as
Geneva Supply’s capabilities, as far as what we’re able to do for a manufacture that’s exploring, something that they might have to do because of a change in platform on Amazon. Going from the direct scenario to a potential Seller Central scenario. And, where do we fit in,
in how we can help them, with strategy as well as the actual, logistics and management of their brand. – Yeah, and I think that, the
first thing that I think about when I think about the
changes in Amazon is, if you shift your paradigm from Amazon’s trying to screw me to– – Right, that’s true. – Amazon’s building an
infrastructure so they can be big. And so, they’re investing
right now in growing. And so, the changes that they’re making, is so that Amazon, as a retail platform, gets bigger and bigger, and so as a manufacturer
you want to do that as well. And so it may be costly up front, it may be a real pain to do, but it’s worth it because if Amazon’s a trillion dollar company
you got to be there. You got to be there to have
that traffic and be part of it. – They’re proven themselves
time and time again, that they are the platform. And yes, is it difficult for manufacturers to make those types of changes? It is. Is it time for them to start sitting down at the conference table, with their proper teams
in house and start to say, “Hey listen, this
e-commerce thing is real.” – You might want to do it. – And it’s not going away. And the Amazon platform again, has proven itself to be
the platform to focus on. And I feel strongly that, if you can create your
strategy for Amazon, any other .com that
you might want to be on in the future, you’re
going to be more set up, and stabilized to be able to handle it. – I think so, and I think you want to do more than just Amazon. – Oh for sure. – And I think you should set yourself up to use other retail platforms. But I think that, if you’re
thinking about your business in a daily or monthly way, which you have to because
you have to make money. You’re missing out. You’ve gotta think, what am I going to look
like in three years, what am I going to look in five years? How do I build so that I’m ready for that? If you do that I think
you’re going to be okay. And it helps you, not feel so bad about all the sort of pains
you might have to go through to adjust the way you’re
running a business. – Well and I think some of
the things that we’ve done, this is our tenth year in
business at Geneva Supply so, what we’ve done through the years, and we’ve always said
our greatest strength has been our flexibility. And it’s not that we’re the
smartest people in the world by saying we created a
company that’s flexible, we just realized that every
six months we had to change and help manufacturers change
in order to stay in business. So through the years,
we’ve kind of adapted and created a platform
within Geneva Supply, that was, it was comfortable to change. And I think, going out
there when you’re looking at manufacturers that are direct and if this ten million dollars that’s been written about ends
up being that magic cut off, you know that ten million
dollars and below, for manufacturers going to
that seller central platform. That is a major change
for a lot manufacturers that were getting those PO’s on Mondays and they were shipping
it to fulfillment centers and it worked within their traditional distribution style, you know system. And now they’ve got to
start to look at, you know, what am I going to look at as far as how am I going to manage
the retail prices? How am I gonna manage
the content differently, what’s the marketing
campaigns going to look like on the seller central platform? – And the logistic side of it. – The logistic side. And that is one of the biggest challenges. Are they going to choose to
go to the fulfilled by Amazon, the FBA platform versus
the direct-to-consumer, you know, merchant-fulfilled
portion of it. And that’s part of that
strategy too because honestly, you don’t want to put everything, in an Amazon fulfillment center and have it be FBA even
though you really want Prime. It comes down to does it make sense? Because it’s not cheap to put your stuff in an
Amazon fulfillment center. – You’ve got to look at
it, ASIN by ASIN to see what’s more cost effective. And in some cases FBA is more expensive and so you’ve got to make those decisions. But the thing about Geneva
Supply that I think is– – Yeah, why did you say, when we talked, why did you say, “Yeah I’m going to come
and join that team?” – But I think that, it’s
almost like taking a page out of the Amazon book where
at Geneva we think about, the manufacturers as our customer. And we focus on the manufacturing needs. And I think that’s a little bit different than some of the other organizations I’ve seen doing this work. At Geneva we can do pretty much anything that a vendor needs. You need 3PL? Yep, we can do it. Do you need distribution? Yep, we can do it. Do you need digital strategy? Yep, we can do it. Seller central, yep. FBA, 1P, we can do it all. And we build programs around
the manufacturer’s needs. And so having the manufacturer, having that laser focus on
serving the manufacturer’s needs that’s what makes us so effective. – And I think, in the end,
if I’m an Amazon vendor, manager, or whatever level I am at Amazon that might be working with one
of the brands that we handle, I do truly believe one of the benefits to that Amazon employee
is that we take away a lot of the headaches that
they have to deal with. For brands that just don’t
have the infrastructure and the expertise within their platform. And I think that’s a big plus. Not just for the
manufacturer, also for Amazon. Wanting and being willing
to partner with us. I know Amazon always wants
that direct relationship. And we get that. We get that that’s what
their goal is and what it is. But if the manufacturer’s in
a situation where they just, for whatever reason,
whether it’s a strategy, whether it’s their marketplace that they’re trying to
control, whatever it is. You know, for us to be
able to fill that gap when it’s necessary. And we’ve always tried
to keep our nose clean when it comes to what
Amazon’s looking to do and what the manufacturer’s
needs are trying to do, and kinda fill it. I’ve always called it the
triangular partnership. So, it’s one of those things that we’ve kind of grown into. Now, we’ve touched product
for all these 10 years. So we’ve been a logistics-based
kitting, packaging, handling the product from
our warehouse facilities into the Amazon fulfillment
centers going out there. But with the change, and we kinda saw this
potential two years ago, to be honest with you. And we saw it earlier when
they started to actually really see that the strength of the seller’s central
platform taking on. – Well, I think I told
you guys 10 years ago. – (laughs) That’s fair. – That you should get into
this side of the business. – For sure. – Just from my experience
with the organizations that help manufacturers has been, that these guys don’t really understand the analytics that you need
to be affective at Amazon. And I think people kind of wish that away. And you really do need to understand it’s about defect detection
and defective detection before it starts hurting your business. And, you know, a lot of times people wait until sales start dropping
before they even recognize the fact that there’s a defect
out and they have to fix. Whereas, you know we
have an engineering team here at Geneva, we’re building algorithms so that we can detect
these defects early on. And we can keep you from
having those big blips in sales drops. – And so many of the
people that we work with at a manufacturer is their sales manager, that they’re so focused on
the sales portion of it. Where e-commerce, these platforms are so much deeper than that now. It’s not just the sales, it’s literally figuring out why is this performing so well versus this. – Yeah, I mean it’s just
like we had the manufacturer who thought they could
understand detail page HIPS. You know, by looking at the sales ranking. Yeah, they’re smart people and they’re trying to figure it out, but they just don’t have that expertise that you need to make good decisions about what you’re going
to do with your business. – I always tell people, you know, manufacturers, “I can’t do what you do, “because you do what you
do every single day.” And that’s, to a certain
point, our noses are in it, every single day. So we’ve seen so many things. We’ve been in 10 different categories with hundreds of brands
that we’ve dealt with in the last 10 years. So we’ve got an insight to it. But I think the big thing is, what we’ve started to kinda look into is, how do we start to manage and help brands that logistically want to
handle their own product to a consumer or to an
Amazon fulfillment center. So the rep side of it. And I think it’s fair to
say that the manufacturers that truly can handle
their shipping themselves, there’s a plus to that because freight is one
of the biggest expenses of the dot com marketplace. So if a manufacturer can truly
handle shipping it direct to consumer or to an
Amazon fulfillment center, that’s great. But there’s still that possibly
that they need our expertise in that rep and brand management side, digital marketing side of things. And that’s kinda where
you came in to play. – If you think about
experience in general, and if you’re a single manufacturer you experience things, as they happen. You know, let’s say you’ve
doing Amazon for over 10 years, well think about, at Geneva we’ve touched over 100 manufacturers
over the last 10 years. And everything from being 3PL,
from being brand management, from being a distributor, we’ve run into just about every
kind of problem that exists. You can’t get that as a manufacturer, you just can’t if you’re
the only one doing it. – And I’ve always said,
there isn’t a problem that we won’t be able to solve. Now, there is a caveat to that, it might be really expensive
to solve the problem. So it doesn’t make sense to solve it. – Or it’s a new problem
because Amazon made a change. – Made a change. – As they’re trying to
become more profitable. And that’s the other thing
that I wanted to bring up. When you think about paradigm
shift of working with Amazon, don’t look at the billions
of profit they’re making, look at it or think about
it in a per unit basis. If you were running a
store, a small store, and you had an item that was, you were losing money on an item, you wouldn’t put it in the store. I think that’s a better
way of thinking about it. – And Amazon always
wanted to be that A to Z, the everything store that
you’ve seen out there. And I think that’s fair
that they became that, they proved that they could be that. And now with the seller central platform kind of picking up, let’s
call it picking up that slack for brands and selection. To help them be the everything store, they have to start. Any business is going to look and say, “What’s profitable,
what’s not profitable?” So, Amazon is simply saying, “Hey, listen. “For us to keep going the way we’re going, “we need to change our retail portion “and we’re going to be smarter about it. “And we’re gonna start putting the onus “a little bit on the manufacturer
for carrying inventory.” Because Amazon can’t keep building million square foot facilities at the pace that everybody’s trying
to grow their brands and those B, C and D items. And let’s face it, it’s
not Amazon’s responsibility or they don’t have to
carry B, C and D items. They chose to in the beginning, to prove themselves that they
could be the everything store. But I think that in the long run, they’re also proving whether or not that can be a sustainable,
profitable business. And I think in some cases
they’re looking at it and saying, some cases it’s not. – Well, Jeff Bezos just said
in the shareholders letter that sellers are beating retail or kicking retail’s butt, right? That’s a good sign. But that’s a great part of the platform. So it’s not a bad thing,
it’s just a change. And you have to make that decision, how am I gonna make that change, how quickly can I make it,
and does it make sense for me? – And I think where this going, I hate for any kind of
content we put out there, video content, for it to
seem like a sales pitch for Geneva Supply. Because really, honestly I
never try to sell Geneva Supply, I like to talk about what
our capabilities are. And if that ends up
being a fit for somebody, that’s awesome. There’s so many ways that they
can use us, and call on us and lean on us. We set ourselves up as an
a la carte style company. It’s tough to outgrow us, once you’re doing something with us. You could be doing everything with us, and then you start to develop, maybe your own digital
marketing team in house, and then so you don’t use our
digital marketing anymore. And you can come back
to is and then leverage different aspects of what
we do to support you. I think that’s a big part of
what you came on board to do and to support manufacturers and creating that online strategy. And like you said, not just to
Amazon as an online strategy, but where is it gonna be
three to five years from now? Because Walmart.com is not going away. – And it’s big. – It’s big, it’s big business. And let’s face it, they’ve got the brick
and mortar retail stores. So if that ever proves itself
to be the way consumers want to handle getting their product, that’s a real thing. Now that hasn’t, people have tried it, and it’s been like eh, so-so. But in the future you don’t
know what the consumer’s going to be more comfortable with. When Amazon switches this
third party seller platform, there’s gonna be less Prime items that are on the Amazon
platform for certain brands. And consumers are going
to get use to that. – Or, Amazon’s gonna think through how do I maintain Prime
and maybe a different way of doing it with sellers. I would always bank on Amazon
being really thoughtful and intelligent about what
they’re planning for the future. – Yeah, they know what they’re doing. – Yeah, and if it’s not working right now, it’s probably getting built. It’s probably being thought through. And, or, there’s gonna be tests. And that’s another thing that I think that I like to talk to manufacturers
about is, test stuff. Try stuff out. Try a best deal, try a lighting deal. Figure out your seasonality
and just try some things. You have to try and fail so you can learn. And then once you learn, you
start to lean down on that. And then you should be
constantly doing and coming out with new ways or things to do. – And there is a different
way of creating a strategy and that cost of doing business online versus brick and mortar. There is a different cost in it. It’s funny because you
sit there and talk to different manufacturers and they’re like, “Oh, we don’t have a
digital marketing budget.” But yet you’ll walk into
their retail locations, they’re have all this signage. It will have all this stuff all over, they’ll have trade magazines– – They’ll buy end caps at Home Depot. – End caps, all that kind of stuff. But we don’t have a digital marketing. And it’s crazy that it’s 2019 and that’s still a thought, “Oh, we don’t have that type of budget.” I just don’t think in
the next 12 to 18 months, people are going to be
able to get away with not having that budget. I think it’s big because it’s
proving itself again on Amazon what that digital marketing is doing and the strength of it. So, in closing, you know
the Rep Division concept. What do you see with the next, let’s just call it the next 12 months because of this purge, we don’t
know when it’s gonna happen. Our gut, I would say, it’s not gonna probably happen
in 2019, for whatever reason. But it’s going to, some aspect
of it’s going to happen. And it might not roll out
the whole, all of Amazon. It could be categorical
and that kind of stuff. What do you think the key
points that a manufacturer right now, if they’re watching
this and listening to this, and they believe in what
we’re talking about. Tomorrow they call a meeting, they’re sitting at the conference table, who should be in that
meeting within their company and what should be their main
focus for the next 60 days? – I think diversifying a little bit. And so if all you sell to is Amazon, I think it’s worth looking
at what other platforms are out there and how can I do that? I think you need to think about logistics. If you’re a small 1P and you’re afraid you’re gonna be moved to 3P, you need to start thinking now about, “Am I gonna be able to
ship to a customer?” – Anywhere in the country. – We’ve talked about outbound
shipping being the most expensive line on the P
and O after cost of goods. Are you gonna be able to
ship one day or two day anywhere in the country? Those are the things that I’d
really focus on strategically. But I definitely think, hey
what is this gonna look like in three or five years? And then how do we build to that? – That makes sense. And to that point, we
opened up a location, it’s close to a year ago, 11 months ago in
Charleston, South Carolina. Because we know the Port of Charleston is gonna be the largest
point on the East Coast ’cause they’re dredging
it down to 50 feet. So we were thinking logistics, logistics and product coming in
from out of the country. But also hitting that East Coast. We’re opening up the location
in Phoenix, end of June here to handle that West Coast
distribution as well as product coming from that coast. In the next 18 months we’re
staring at opening a location out in Pennsylvania, out in Colorado, up in that Seattle, Washington area. Because we know for us to
continue to grow our business, logistics has to be a big part of it. Because like you said, if they’re gonna sit down at that table and talk about logistics and that ends up being
a problem of theirs, we have to be as solution for that. So that’s our way of kind
of growing into the problem. – It just goes back to this manufacturer-centric
organization that we are. And that really any
problem that you run into we have something that can help you. – And that’s the best part. That’s why I love Geneva Supply and that’s why I’m happy
to have you on board. This was fun.
– Thanks, yeah, I love it too. – This is awesome. So, this is Jeff Peterson, John Pistone, signing out from 360 Delivered. Hey, keep paying
attention to these videos. Sometimes we know what
we’re talking about, right? It’s good stuff, thanks! (upbeat rock music)

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