Private labelling and selling in the EU feat Thomas Macorig

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Welcome to the 7th episode of  My Grand Venture Heroes. 

For this occasion we had the amazing opportunity to meet Thomas Macorig, one of the highest authorities when it comes to Private Labelling for the Italian eCommerce community.

Here the full video interview:

First of all Thomas, thank you for being here.
There are surely people who are watching us and that don’t know who you are, so tell us something about you and your story.

OK, sure. My name is Thomas and I am 19 years old, I mainly work with e-commerce, dropshipping and a private labelling and I’ve been living in Dubai for the last months. 

I started e-commerce when I was 15 or 16 years old with my first online sales, I was really young and it all started for fun, it obviously wasn’t a business. Afterwards, things started to become more serious and I obtained my first results and when I became 18, so we’re talking about almost a year and a half ago, I dropped out from school to dedicate myself entirely to my business. I don’t regret this choice because my results grew through time, I fully dedicated my time to e-commerce and this allowed me to move to Dubai and live a certain lifestyle. 

Obviously I also have other businesses, but my main focus has always been Dropshipping and private labelling. 

I started with Dropshipping because, as we all know, is the most simple way to do e-commerce, it doesn’t require a stock to start with etc, then I started moving towards a private label environment (we will talk about this later if you don’t know what it is) for a whole range of reasons that we will see in detail and that bring a lot of advantages in terms of results, especially for a long-term business.

WOW, congratulations! So, to reconnect to your presentation, I know that you like Dropshipping, but I also know that your real passion and your most popular skills are with private labelling. Why don’t you tell us what it is, and why did you choose Private Label and not to Dropshipping or FBA for example.

The reason is simple. When you do private label you are essentially working with a product that you customize with your logo and on its packaging. So you create a real brand, you’re not just simply shipping or reselling white label products without a proper brand.

This is something that makes a crucial difference in terms of results that we can gain.

The first and main reason is because we manage a real business, and not just a simple store. It’s a very important switch because you go from selling online to managing a real company, a brand that you can scale to the stars. Obviously dropshipping and the FBA are business models just like other models and they’re OK, but the fact is that they have a lot of limitations: for example with FBA and many others, you depend from a platform, you depend on Amazon and that’s a big problem because they can delete your reviews, they can ban your account, you don’t have a full control on what you’re doing and this is something that somebody might like, but I don’t.

Being in control of your business is crucial, therefore if there is something wrong it’s my fault, and if there is something that works and the business is growing it’s obviously on me as well. 

From a practical point of view, talking about how much more simple it is to sell and profit with a private label, there are no doubts because we have a brand. 

Let’s make an example. 

Nobody goes to Gucci to buy a T-shirt because it’s good quality. It’s because of the brand that is selling the T-shirt, and that T-shirt costs €400, so there is a lot of margin here. We can gain a lot on a single item and profit more.

After that, how do you develop the rest? Usually we buy a stock of products to start with, so switching from a dropshipping model, where you ship out a single product for each sale, to a private label model, where you buy products of a lower price, because you are buying stocks, and resell them at a higher price, because you have a brand. So from a margin’s point of view there is no doubt that it’s better. 

Moreover it becomes seriously valuable because we have a company, we scale it up to a certain point, and then we can sell it, because there is a brand behind it. For example, Kylie Jenner sold her brand at 51%, for $600 million, and it’s a private label brand.

So, overall, as a business model, especially as an online business model, it’s without any doubt the best one, because we have a lot of freedom and we have control on what we are doing. We can make the company grow and we don’t depend on anybody, but most of all there is a real value behind it so the company is something, it’s an asset so we can say that we can sell in the future.

R: Exactly, so the first thing that we notice here is that perspective is very important, you operate with much more consciousness and you maximize your investment, from the stock to influencer marketing.

So, especially when it comes to being in control of your own business, which are the the most challenging parts that you have to face when you have to order a stock and manage the importation? 

The fact that you have to manage everything that’s behind it it’s the most challenging part, and the main thing is to manage the stock of products, the importation, the shipping etc… because obviously these aren’t things that you do once and it’s over, you have to re-ordered the stock, you have to understand when to re-ordered a stock, and especially you have to give your clients a certain kind of service because it’s not a Dropshipping store, that might last for a month or so and then you close it and open another one. 

We must create an ecosystem that works in the best way possible and have customer care, which I’m not saying that is the most important part but it’s indeed a crucial part. 

For this reason, especially with the possibilities that we have in Italy and in Europe, once again with uDroppy life is much easier, because for example we can do Cash on Delivery, which is something that in Italy works very well, and people can pay when they receive the products. 

R: Thanks for the feedback! And yes, the amount of requests is exactly what lays behind our choice to start offering this service, and also to help who is investing in private labelling by handling all the operations for them, with the goal to empower your knowledge in making business.

T: Exactly, because then it becomes an automatic process, and the most complicated parts, like communication with manufacturers and certifications, are entirely handled by a company that knows how to do it.

R: Marketing on you, the rest of us!

But I wanna ask you something else. Dropshipping is usually the kind of activity that you do before ordering Bulk and doing Private Labelling. Do you use or this method? Or, do you also use other kinds of market validation methods that maybe can adapt better to your projects?

So let’s say for example that you’re using Dropshipping in in the beginning to test products, and scale them in private labelling. That’s a valid option.

Obviously there are a number of variables, because certain products that are tested in dropshipping might not work in dropshipping, but would work in private label with a solid brand behind.

So the first thing to do is to understand which products can be suitable for both business models because they are there two different business models, it’s not the same thing.

On the other hand, we see that if a product is performing well in dropshipping, then with private labelling is 100% better.

So yes, it’s a valid method and it’s something that I used to do a long time ago, now I am in a situation where I
understand more or less what the market wants, and I order a stock without thinking too much about it. Because after several, maybe hundreds of stores launched mainly in dropshipping, you gain experience and you understand which are the products that can become a current trend.

But if you are starting and you have to test this is a method, also considering dropshipping has its own issues, like long shipping times and all these kinds of things that with uDroppy can be handled much better.

So if your intention is, and this is something I also teach in my courses, to start with dropshipping and transit to private labelling, you can work directly with them (uDroppy).

R: Oh yes. Thanks for the feedback.

You said something very interesting, that Dropshipping is for sure a great testing method, but sometimes it’s not the best way to test certain kinds of products. So I have a question that we get a lot, it’s about the other methods to test, specifically the pre-order one, which is very comfortable but also very delicate. 

What do you think about this? Do you use it? And do you have any advice to share with us?

I am not a big pre-order fan, but it’s something you can decide to do. Pre-order is about launching a store and telling your customers that they will receive their orders after one or two months, or whatever the time is.

Obviously it’s something that can work, it’s something that you can use to test a product, but it has several problems and pain points, because you can’t have a three months pre-order phase, three months in which you understand if it works, or if it doesn’t.

You need to have everything well defined in a short amount of tim: the pre-order phase must last maximum two weeks, and than other two or three weeks are needed to order the stock.

So it’s something that can obviously be done, but you have to know how to do it, because is very valid but very tricky.

R: So you must have a great communication, act as you were walking on eggshells, and be very precise when calculating times.

T: Exactly, also because you’re creating a brand and a brand needs reputation, you can’t start a project by having products arrive in 6/10 months, I’ve seen this happen also with well known companies, worldwide famous, it’s something important.

R: Start with the right foot also because traffic is pretty expensive! So you gotta spend that money cleverly and I would like to talk about this with you because we know by now that in 2020 traffic costs a lot. 

There was an article on Forbes that was published months ago, last year, that stated that acquiring a customer is x5 more expensive than keeping an existing one. It’s clear that when you have a well managed brand these costs go down.

T: Yes, exactly.

How does your average client behave, in terms of lifetime value? And which are the advantages?

Everything starts with how serious a brand is, therefore customer experience. So considering that we are working with a brand, not in dropshipping, we have enormous chances of acquiring a client once and further on sell him the same product or other products connected to the first one without having to pay more for acquisition..

We can use email and a whole range of tools that can allow us to increment revenue, and go from a client that initially gave us 100€ to a client that in a year will give us 1000€. Multiply this per 10000 clients and you understand how much it can make a difference, especially if traffic and post conversions don’t cost anything. 

That’s another chance that private labelling gives us, so the creation of a brand opens us doors that traditional dropshipping gives us, but with limitations.

So yes, the lifetime value drastically increases, it must be handled properly obviously, and you must use certain marketing techniques that must be performed in order to keep the client.. like a calling team, email marketing, retargeting, advanced things that must be done if you want to boost your revenue, especially if you’re doing high ticket and you’re selling €200/300/1000 products. Obviously reselling this product for 5 times to the same client and multiply this, as we said, for thousands of clients is possible. It’s something that a lot of companies do and it makes a great difference. 

This is possible because of private labelling and because of a certain type of customer experience.

Let me ask you one more thing. Mainly, which are your GEOs? Where do you sell to?

I have always had Italy as the main target, for private labelling.

I also did dropshipping, and in dropshipping obviously the dynamic change, because it is a one-shot sales, it’s all a bit ‘particular .. but for private labelling mainly Italy, because we are running a company and we have a number of things that we need to do, and in order to sell a product to someone we have to know the psychology behind those people, and probably most of you are Italian, and you know the psychology of Italy and of the average Italian. Therefore it is easier to go and sell a product to an Italian.

Obviously there is also the part related to influencer marketing, so we have all the influencers who work in a certain way, we understand who are the influencers who can communicate better and those who have closest followers. 

Instead if for example we start in Spain or in France, of course we can do it, we can create a team in France and Spain, but to do it at the beginning it doesn’t make a lot of sense,

So what I have always done was starting from Italy and then, perhaps after, expanding at a European level, but when you already have a company, a well-positioned Italian brand, with above all a defined business strategy.

So you’ll understand which are the marketing actions that bring sales and that work, to then have a solid company and penetrate other markets already with a defined strategy.

R: Sure, of course.

T: Of course, we have above all Cash on Delivery in Italy which increases conversions a lot. The thing is, most of the online stores that are sponsored are dropshipping, and they do not offer COD, so if we do we have the opportunity to really grow, and quickly, on an Italian level, with our brand and having a strong company to be expanded abroad in a much easier way.

R: Yes, just look at the giants, they offer COD in Italy.. NIKE sells in COD, Adidas sells in COD, Sephora and MAC sell in COD, I was looking at a short list of these companies and I saw that there are really a lot, so there must be a reason. 

T: Exactly, let’s say we are selling, and there are tot companies, tot stores, that sell a Dropshipping product, and we arrive with the same product but we offer Cash on Delivery, we have a brand behind it, we have a serious company, we have the influencers that sponsor the product.. and all the others no longer exist. We could even sell at triple the price but people will still buy from us, because they trust us more and they can pay on delivery. And this leads us in a very short time, from launching the brand, to dominate the market of one or more products.

R: I told you he was extremely skilled!

I have to ask you one more thing. You are very young, but you are mentor for many people. Who are your mentors?

My mentors? I can’t say.

R: Can’t you tell me anything? Not even the motivational ones? This is very interesting.

T: Let’s say I’ve never had a mentor. Most of the people I studied from are the ones you all know in the Dropshipping world, who are widely recognized.

But the people who gave me the most are people that nobody knows. They are people that manage brands, manage big companies..those are the people that gave me the most valuable information.

R: OK, so if we try to abstract the concept, because that’s what interests me the most, then your mentors are people that work in the environment, that allowed you to go deep in the job.<

T: Yes, exactly. 

R: This is a common story to several people who participated to My Grand Venture Heroes, so it’s important to share this information in my opinion, to inspire other young people.

T: Yes, it’s very important. It’s okay to buy courses, but you also have to start thinking outside the box, if you see a person who is running a multimillion dollar company, go there and ask, how much do you want for an hour of consultancy? I paid consultancy hours 10.000€, 5.000€, to talk to certain people. Those are the people that make you jump high.

Obviously the training is fundamental, especially when you are starting out the courses help, they save you from making mistakes, because you learn from other people’s mistakes.. but when you get to a certain level, I really advise you to start paying for consultancy, to really understand things that are not explained in a course. You will feel lucky to be able to give that money for it. And this makes the difference.

R: Guys I hope you took all the necessary notes. 

Our interview ends here, although I’m very sorry because it was very entertaining, thank you so much. You were our youngest hero, and the first Italian in MGVH, so thank you once again!


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