While in Bali attending the DCx event, I had some valuable time to catch up with Ronnie Teja, someone I only met a few months previously while attending another event in Bangkok.
Ronnie Teja is a character and full of life, in this podcast we hear about his story, going from 9 – 5, losing his job and then taking a chance on himself to build his own company. While running a software reselling company, he has also launched his own branded watch line.
The Rude Growth Podcast is available on Spotify, Stitcher & TuneIn. Very shortly you can also listen to it Spotify. You can even listen to the podcast directly from this page as well as read some of the best bits taken from our podcast with Ronnie Teja and Branzio Watches!
Listen to Episode 002 of The Rude Growth Podcast featuring Branzio Watches
”It's quite interesting because you're pushed into a corner. You're not going to make your rent. You want your freedom but can't have that sovereign freedom that you're looking for. So what's the next best thing you can do? It is to take a chance on yourself.Ronnie Teja - Branzio WatchesThe Rude Growth Podcast - Ep002
Wes (Cude Design): We first hung out in Bangkok (October 2018), yet for the first few weeks we never asked what the other one did for work. I still don’t 100% know, so let’s start there.
Ronnie (Branzio Watches): So, in a nutshell, my main businesses are e-commerce businesses. I have a software business which spans about twenty-nine countries and a watch business which basically serves about 30 countries roughly.
Losing a job and taking a chance on yourself
Ronnie (Branzio Watches):: Before setting up my own business I was working for another software business which was not similar anyway to this one but it essentially dealt with digital downloads. So it’s quite interesting to find out how the digital download market worked. And before that, it was working in Australia for an ad agency.
I remember walking in one day in Vancouver and I worked at this company for about a couple of years and I remember waking up on December the 1st and getting an email, not even a phone call, from the guys that were saying ‘hey, we’re having some cuts in the company you don’t need to go to the office anymore, just send us your passwords’ and that’s it. At 8:30 in the morning! What just happened?! That’s a good day to you sir. And that’s it. Bye bye.
And then I was like, holy hell what do I do?! Because it was December and of course nobody works in December, especially in Vancouver.
I had fifteen dollars in the bank. I didn’t know I was going to make rent next month. Okay. I didn’t know I was gonna make that. So the best stories are the stories where you’re pushed into a corner.
To make rent, I got a contract job with a couple of people for the months of January-February and I started working on my business in my spare time, I mean you have to eat and you have to make rent.
It’s quite interesting because you’re pushed into a corner. You’re not going to make your rent. You want your freedom but he can’t have that sovereign freedom that you’re looking for. So what’s the next best thing you can do? It is to take a chance on yourself.
Nobody actually says you know to take a chance on yourself. That’s something that I think is quite important. I think if you have a common thread between anybody who started their own company, I stop making other people money and I took a chance on myself.
The hurdles facing E-Commerce in 2019
Ronnie (Branzio Watches): I love being in e-commerce. But the thing is in e-commerce the margins are quite thin. You’ve got to think about it this way. Right. You have your own e-commerce business, then you have whatever you’re selling, whatever your niche is, you’re going to have competition from Amazon. Right. So Amazon is by far. It’s like let’s say let’s cut to the default of all e-commerce stores. So whatever you sell Amazon probably has it or whatever you sell, the Chinese supplier selling it on Amazon. So the only way you’re going to be successful as an e-commerce store is exactly what needs to happen in retail, you know 10 years ago, which was you had your own brand and people respect the brand and people love your brand and they want to just buy a brand which you know we don’t sell on Amazon.
So they have a following and aspiration for your brand. A very good example is MVMT watches or something like that and people go OK ‘hey, these are only available on the website, nowhere else. So I’ll just go and buy from that.
What’s interesting when you look at e-commerce is our margins, our margins are between five or 10 percent. So now when you think about it from a services perspective like holy shit! But what we aim for is volume. If I just wanted to be in one country and be OK but now the only way I could increase my order volume would be to expand as quickly as possible.
Setting up Branzio Watches & Driving Traffic
Ronnie (Branzio Watches): I set up Branzio watches about a year ago, design in Canada, manufactured and assembled in China then shipped back home to Vancouver.
I threw my designer in the deep end because he was a designer but he was very uncomfortable designing watches or anything product related. So I really really had to push him to go and design these watches. Then I got into watch fairs and I had to go look for different sort of watch manufacturers and suppliers, then go meet them at different watch trade fairs. So, from the time that I had the idea for a watch to actually getting the watches in hand, that whole process took me a year!
For the first month on Facebook Ads, we spent $20,000, and the results were appalling. The excuses I heard were ‘oh the Facebook Pixel takes time to optimize’. Facebook Pixel takes about twenty-seven days but that doesn’t mean you just throw money into a pit! The cost of the watch manufacturing on my first run was less than what they spent on Facebook Ads.
We sold about 100 products in the first month, we were ROI negative. Let me put it this way, the company just was a money pit for the first month. I built my first business on trial and error but trial and error which cost me a hundred dollars a day, not $20,000 in a month.
For the second month, we scaled our budget back to between one and five thousand dollars and then we started seeing some uptake on the sales and then the third month we were seeing some more uptake again in the sales. So now we’re finally coming to a break even which is a great thing, right.
Fashion isn’t easy man! So you know, it looked amazing and it looked easy on paper. I’ll tell you this, It’s not easy at all, man! It is not friggin easy at all. The other thing that I hadn’t prepared myself mentally for, product returns, we have to pay for that too.
The problem is like with guys like Amazon. Amazon customer service is considered to be the best. The problem is, it’s probably easy to be the best customer service when the product that they’re selling is not yours.
They say ‘Oh wait a second if you need a refund, that’s not a problem it’s somebody else’s we will refund, don’t worry about it!’. So customers will be used to the Amazon mentality of getting refunds immediately whenever asked.
Stiff competition from Amazon
Ronnie (Branzino Watches): Amazon is playing out to be what a retailer is, they are getting their margins. Amazon has all the data from the third body merchants. A good example of it is, I had this forum discussion in the e-commerce field the other day and they were trying to buy supplements on Amazon. In this particular instance, the recommended item which Amazon gives you was Amazon’s in-house brand.
And it’s not just happening in that category it’s happened to every category because Amazon has so much data, on what selling and what’s not selling. Another good example is coffee beans in Canada, somebody who’s making twenty dollars a kilogram. Amazon thought about it and decided to start selling it for five bucks!