Living The Red Life - Building a $30 Million $ “Boring” Business w/ Jason Macek

Episode Date: April 10, 2023

Are you in e-commerce and looking to learn from someone who's a little bit further down the road? Jason Macek started a fulfillment company, with his wife, from a garage, in 2005 – charging $1 per box to ship your product.Jason is now so far down the road his garage has moved to a warehouse, and his company, Dollar Fulfillment, is shipping up to 25000 packages a day.Rudy is getting the best out of Jason as he shares on the business challenges he's faced over the years, the value of having a good team, and the importance of strong company culture. Don't let someone else's trademark infringement get the best of you! Learn how to reinvest in your company and grow your own e-commerce business one dollar and one package at a time. Outsource whatever consumes too much of your valuable time and start Living The Red Life today!"Find something that you're interested in or passionate about, because it makes it a lot easier coming to work every day when you're dealing with something that you like." ~ Jason MacekThe first 1000 to click here and send the promo code from the podcast can claim one of my courses for FREE!  - https://m.me/rudymawerlife In This Episode:What is the difference between dropshipping and fulfillment?Why outsourcing your shipping is a no-brainerAppreciating Jason's mindset after receiving an Attorney General's letterPreparing for the inevitable shock that is really just a business challengeWhy Jason believes in people over profits And more!Connect with Jason Macek:Website - https://dollarfulfillment.com/Connect with Rudy Mawer:LinkedIn - www.linkedin.com/in/rudymawer/Instagram - www.instagram.com/rudymawerlifeFacebook - www.facebook.com/rudymawerlifeTwitter - www.twitter.com/rudymawer

5-10 years ago you could just sell whatever, right? Cool product, cool name, cool offer, just sell it. Now people want to buy more and more from brands and the average consumer has cottoned on to dropshipping, right? They know what it is, they've learned about AliExpress themselves, so you've got to start building a brand around it. My name's Rudy Moore, host of Living the Red Life podcast and I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. Guys, what's up? Welcome back to another episode of the red life. Today, we're going to dive into how the pains of growing a business, the problems of growing a business and

Jason's story growing a big brand. And you may have heard of it, Dollar Fulfillment. Welcome. Thanks for coming. Yeah, thanks for having me. So we were talking offline earlier, right? Like we've both been in business a long time. You've grew a big company. You'll grow into hopefully have a nine figure exit soon. And I've seen, obviously, seen you for a long time and sent a lot of clients whenever they ask about fulfillment and they have an e-commerce product.

I'm like, you know, go here. Right. And and one thing I've always loved about you and is is and I don't know how intentional this was, was the name, because a lot of what we teach is make it third grade level super easy. So how did you come up with a name and maybe tell people about the business a little and you to start the show? Yeah, absolutely. So we started about 15 years ago, just out of our garage. My wife was doing this. She's packing boxes for a friend of ours that owns a parrot training business. And so we were doing that for years for them and we were charging them a dollar per box to ship it out. And so when we decided to eventually kind of try and create a brand, we'd been charging them a

dollar and it was right around the time Dollar Shave Club was coming about. And I really loved their marketing and their branding. And so totally copied them okay so so and for how would you describe fulfillment for people that don't understand fully what what that means yeah so fulfillment is a little bit different than drop shipping to where you're going to buy your products in china you know in in bulk have them shipped to our warehouse we're going to store them and then when your orders come in our system connects to your e-commerce platform. We get those orders. We print the shipping label. We put the stuff in a box. We label it. We ship it out the door. And then we bill you our fulfillment fee plus postage. So say I produce these basketballs, right? And I get 200 of them from China or US,

wherever I manufacture them. They send it straight to you and you deal with all the BS after that, right? Absolutely. Pack it. And then when the order zaps across, you just print the label, send it. So the business owner like me, the marketer can just focus on the sales and marketing side, not the fulfillment. Absolutely. You never have to touch that product. You never have to see that product. You don't have to worry about if it's gone out. We take that headache on. And I've done that for years, you know, use fulfillment parties and companies like books and stuff we sell. And even back when I sold supplements many years ago, and I was telling you offline, it amazes me how many people still fulfill their own products. Yep. Cause they don't, I guess they don't realize that this exists, this whole,

I think a lot of people want, they hold on tight, you know, it's a control thing. They want to make sure it's going out exactly how they want to go on out. Yeah. I mean, it's a control thing. They want to make sure it's going out exactly how they want it going out. Yeah, I mean, it's just not an ROI, right? It's like when you look at... I mean, I get it if like they went with a bad company that wasn't sending it and causing... That's different, right? But if you find a good, reputable company like yourself where it's being, you know, processed properly,

like, so if you're an e-commerce store owner, like always, you know, we talk about maximizing time, right? And you shouldn't be packing your own boxes. And what about cost? It's pretty much the same. I guess you get shipping discounts. Yeah.

Yeah. So we ship anywhere from 10 to 20,000 packages a day. Right. So we get some pretty discounted rates. And then, you know, to be honest, if somebody wants to do it themselves, they may save a little bit of money. Like what, 50 cents an order? A dollar an order? Maybe 50 cents an order at most.

And, you know, it depends on how efficient they are and things like that. But you're going to save a bunch on postage. And then, like you said, what's the ROI on your time? Well, even if you have someone at $20 an hour packing it, they'd have to do 40 orders an hour just to save that 20, pay their payroll and break heat. Absolutely. So yeah. Yeah.

And I mean, we were talking offline too. One thing we've done a lot of with e-commerce is like the package inserts, promos. So how do you, do you do much of that? Are you looking into doing more of that? Yeah, we're actually looking into it right now. There's a lot of opportunity for our clients to offset some of their fulfillment fees by being willing to put in non-competing product insert. Yeah, cross promos.

Yeah, cross promos. Yeah, I like it. And I think one important thing is if you're listening to this and you've wanted to start selling products, like one thing I found over the years is it's way easier than you think, right? Like you can literally go onto websites,

order a hundred of something. It's not gonna cost you that much like you can literally go onto websites order a hundred of something it's not going to cost you that much money they get sent straight to you you take care of the rest and it's like i mean when you're like trying to start a business you think well i've got to order tens of thousands of them i need a million dollars i gotta sell ship them all myself it's like no the beauty of the internet is you can like go right one extreme is like literally drop shipping where it's nothing to do with you and it's like you're selling products pre-made the next step is like white label and print on demand where you're there's some customization and but you're taking existing products and tailoring it and then the next stage now is i think minimum order quantities have come so far down in the last five years, right?

Whereas, yeah, 10 years ago, you probably had to do 1,000. Now there's a lot of places you can do 100 or 50 and send them and test it. So you could start an e-commerce business for $500 and test it, right? Absolutely. And a lot of our clients have started like that. They'll drop ship. They'll find that winning product and they'll order in bulk and send it to us so they're not taking the gamble of buying stuff that may or may not sell. Well, that's what we say. And then you can add

your logo, start building a brand. And if you're a e-commerce listener, building the brand is so important. I was teaching at my mastermind the other week, five, 10 years ago, you could just sell whatever, right? Cool product, cool name, cool offer, just sell it. Now people want to buy more and more from brands and the average consumer has cottoned on to drop shipping, right? They know what it is. They've learned about AliExpress themselves. So you've got to start building a brand around it. Yeah, absolutely. You know, when those boxes show up with all the yellow tape and the Chinese writing, it's like, yeah, this came directly from China. Yeah. Yeah. Okay. And let's talk a little about, you know, obviously you run a fulfillment

company, but it's end of the day, a business is a business, right? And we talked offline a lot about when you get past the 10 million mark and you have a lot of employees, some of the harder parts of business that when you started packaging, what was it? TV cassettes, right? You have VHS tapes, right? You started packaging those. You never thought you'd be dealing with lawsuits and all the BS of running a big business. And same for me, right? I was selling fitness programs on the internet. And so what have you learned going through all that and maybe some of the examples you want to share? Yeah. I mean, we've had everything from trademark infringements from

our clients that then they come after us because they can't get to the clients because they're international to the Idaho attorney general coming after us because our clients weren't responding to complaints. And so at the end of the day, it's just, you have to take a step back, realize you're going to get through it. It's probably going to cost you a little bit of money, but don't let it steal your focus from continuing to build your business because that's the ultimate goal. There's going to be bumps in the road. Yeah. And I always teach, I always kind of say cheesily and jokingly money solves all right. But like it kind of doesn't solve a lot of things because if you have a million dollars in the

account because you run a successful business and you know, this is going to be a 20 grand settlement or you've got to pay 10 grand for an attorney to figure it out and say, hey, we're nothing to do with this. We're just sending the package. This isn't our company. Yeah. And you've got to pay 10 grand for an attorney to go backwards and forwards and argue that. It's like, it's not the end of the world. But if you have no money in your business and bank account and you get that, and then you have to hire an attorney for 10 grand and go in debt, kind of is the end of the world. Yeah. And I sleep in at night. Yeah. So like, guys, don't underappreciate the cash flow and i sleep in at night yeah so like guys don't under appreciate the cash flow and building building wealth and money because it's that buffer for these problems whoa whoa whoa

wait a second before we go into the rest of this episode i'm going to interrupt abruptly and just ask you one big favor i hope you're getting a ton of value a ton of knowledge i hope you're getting some breakthroughs from myself and the guests and i I want one thing in return. What I would love is for you to subscribe and leave a review. The reviews and the subscription grows the podcast. It allows me to bring you even better guests. It allows me to invest even more time and money into this podcast to bring you the latest and greatest, the best entrepreneurs from around the world that are crushing life, crushing their business and giving you all the tools, the mindset hacks, the knowledge and the environment you need to be successful.

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big. Yeah. No, I mean, the Idaho attorney general letter was the first like big thing that came in and it was terrifying because it's like, I'm going up against, you know, the attorney general. There's not like this company with a limited budget that's going to come after me. It's, you know, it's my tax dollars paying for them to come after me. And it's makes no sense. Nothing to do with you. Yeah. And I had no control over it. So what happened? You got the letter in the mail one day at the house or the office? Yep. Got the letter. No, I was actually served by, you know, you've been served or whatever. And yeah. Knocking on the door.

At the house or at the office? Okay. Yeah. What did you think when that happened? You know, your heart drops, right? You know, it's just like, what am I going to do? And so, you know, obviously you find an attorney. And so we found a super reputable attorney and, uh, his partner, you go on Google or you asked around or no, I asked around town and, um, there's one where we live and his, uh, his partner is a state representative. And so I figured maybe there'd be a little bit of pull

there since he's down there dealing with, you know, the government officials and whatnot. Yeah. Okay. So, and then how did you, how many days did it take? Like, did you lose sleep over it? How many days did it take to work through that? Yeah, I don't know. So it probably took a good three to four months

for it to kind of go through the process and for our attorneys to go back and forth with her before she finally was like, okay, I understand what's going on. As long as you make sure your customers are responding to these complaints, then we're not going to hold your feet to the fire. But if they keep coming in, we're going to come back after you. And thankfully we haven't had any other issues yet, but I mean, it could happen anytime. Yeah. Right. That's always your somewhat of a risk, right? Absolutely. And people in business, like guys, what you'll learn in business is people look to place blame. So if they can't, if you're partnered

with someone in China, right, or whatever, they're going to go there first, they can't find it, they're going to come to you. And sometimes if you're the, we even watch it because if we're doing business partnerships and something fails and this person's a no you know no name right and i'm a big brand it's like and they do something wrong when i'm not looking right it's your failure and they're gonna come for me right especially if it's full equity so it's always something to be aware of and like i like diving into the mindset side because you know we've had our fair share of letters and threats and stuff and you know we've run a great business honest business we've never our fair share of letters and threats and stuff. And, you know, we've run a great business, honest business. We've never done anything wrong, never got into any big problems.

But like you, we've had to ring the attorney, work through it. And like, there's a few days of like sleepless nights, like thinking about it a lot. Absolutely. And then, but once you've gone through the reps enough times, like your mindset gets better, right? So what would you say to someone listening that is starting a business

that's gonna have the employee steal, they're gonna get an attorney letter, they're gonna forget to file our tax form and get a threatening letter. What would you say to those people? Yeah, I'd say think about it now because right now you're just so focused on the day-to-day stuff and trying to grow a brand

and you don't, you know, you're gonna have that success if you put in the effort, but you don't think about these things on the day-to-day stuff and trying to grow a brand and you don't, you know, you're going to have that success if, if you put in the effort, but, um, you don't think about these things on the front end. And so if you're resign yourself to, Hey, that's going to happen eventually. And I'm going to work through it and I'm going to learn something from it. And I'm going to be better on the other side. Then, then it's not such a shock when it comes. And yeah. Yeah. It's, uh, I speak to Grant Caldone about this and he's helped me because he's always like that's a good problem to have hey you're big enough now that you're getting a big warning letter here and then obviously it's not nice and you don't want to proactively go and get issues

right but it's they're gonna if you know they're gonna happen it's like how do you build the mindset and the framework in your head and brain to handle and work through them because they can you know building a business it's like for a lot of you you're starting out you're trying to make your first million you're trying to make your first 10 100k but your problems right now to us probably would be irrelevant we wouldn't even hear about it our staff would but we've been through those starter problems so the building the mindset now will help you when the the freelancer steals a five hundred dollar contract right like we deal with fifty thousand dollars in theft from whoever right or did you so build it now because it's always going to happen and and you will look back in five years and laugh about what you got upset

like absolutely yeah but but then we're dealing with problems now that are like oh my god and mark zuckerberg and elon musk would say i get a letter every day like that okay you know right yeah so you've always got to know there's a new level of problems and if you stop getting those problems i always teach you stop growing probably right yeah that's awesome yeah you've plateaued so well what about advice about building a business? Because obviously you've built a successful business. You're going for that hundred mil plus valuation. I'm excited to see you do it. And you've hit numbers in revenue that most people will never hit, right? So how'd you get there? What are some business lessons you've learned? Yeah. I mean, honestly, it's like, I'm a big believer in, you know, there's kind of old

fashion, you know, I'm going to deliver on what I say. Um, and then just being super conservative, you know, you know, we've made a lot of money over the years and we didn't take it all out and go buy, you know, fancy cars or we reinvested into the business and we continue making that capital work for us. Um, another big thing is, is finding the right people to build a team, not having that kind of that Superman syndrome where I have to do everything myself and be in the bottleneck of growth. And so we've got a really great team at Dollar Fulfillment and I'm able to step back. I'm not super involved in the day-to-day and just helping with like the big picture and the growth initiatives. And so just making sure

you've got that team, you work hard, conservative with cashflow, don't be dumb with that. And then just, yeah, everything kind of falls into place. Yeah. I love that. So, so let's talk about the stepping back, right? How'd you build a 20, 30, $40 million company and not be involved? Cause I'm sure people would love to understand that. Yeah, absolutely. And you know, and it takes time, right? You can't do that in the beginning, but it's just, as we grew, we intentionally were mentoring people that we could see stepping up into the next level. And we have a really great person named Susan who kind of runs the whole show for me. She's my right hand person. She's a workaholic. She's there all the time. She'll answer Skypes at three in the morning. And she's learned how to do things the way I would do them to the point where I have faith that everything's going to happen the right way. And this last year, we just hired a CEO for the company to kind of continue growing that, looking at some new mergers and acquisitions. And so just putting people in place that you know will do things the way you want them done, and then slowly stepping back and giving them the freedom to do things better than

you might do them. So two questions, how'd you find a Susan and then how'd you make sure she stays with you yeah so honestly it's a it it was luck she came to me from a craigslist ad wow yeah so and and she was just a part-time person why did my head of tech came from upwork and it's like okay i don't believe it yeah no it's a needle in a haystack game i don't know how many people do you hire from craigslist uh lots okay i mean over the probably hundreds. And you found a few really good ones that have stayed a long time.

Yeah, absolutely. And so, yeah, so Susan's great. You know, she does things, like I said, how I would want to do it. And that took years of her, you know,

watching and us having conversations and, you know, no, we're going to go ahead and wear this one because we made the mistake and so we're going to refund them for their cost.

And so, just so she's in that same mindset of that customer always comes first. And how'd you keep a Susan? So Susan, so we've become almost like family. And so we, we love working together. And then, you know, she's, she'll definitely get a little bit of a, you know, bonus on the exit because she's. So like exec team, you're looking at profit share, maybe even equity eventually or shares in the company. Absolutely. Yeah. Anything at the executive level.

Yeah. And what else have you found for the team side, building that team to motivate and keep them? Yeah. So culture is huge to us. My wife and I, we always said people over profit, whether it's our clients, whether it's our teammates. And so it's, we do things, we go above and beyond. I mean, it's not as fancy as this,

but I mean, even in our warehouse, you know, we've got, you know, game rooms and arcades and we do big Christmas stuff. And, and so making it a place they want to come every day, or it's maybe they don't dread coming to, um, is huge. Yeah. I always say, I tell everyone when I interview them, I don't need you. You don't need me. I want you to, I wanted to build a place you could enjoy coming. And obviously that's not every day, even husband and wife is, you don't enjoy every day, but over time, right? Like on average. And it's like, Hey, if that stops happening and continues happening, then it has to be addressed or end. Right. And there's just like any relationship in life. And, you know, you can't, I mean, as a CEO, you know,

we built to 100 staff, you can't please everyone, there's going to be parts in the path, right? Like when people go in their own way. But you've got to look at what can you control? What can you do? And how do you build that, that great culture that makes people want to be here and a good energy and and all the things that go into it yeah you know i think if you can get away from in that employee employer relationship where that is it's transactional yeah and going kind of above and beyond that to where you know it's they want to be there for you not just they want to be there for x amount of dollars per hour yeah um yeah and we tell them that we're like hey don't work here because of the the money only right like we'll you. You'll find a better job elsewhere for just

transactional. Yeah. Come here because of the vision. People buy into vision and mission too. Absolutely. Like buy into the vision, the mission, the culture, the opportunity, the growth. Then that's what money can't buy. Absolutely. Yeah. And that's your, my job is to, to provide that vision for them, something that they can latch onto and say, Hey, I want to take this ride with you. Yep. Yep. Good. So what final words, uh, business owners, e-commerce startups, people trying to grow

a company, you know, to a million, maybe 10 million, or, you know, in general, you know, the theme of living the red life is building a life of on your terms, a life of your dreams using the Internet. What would you say if you had a relative, a niece, a nephew say, how do I build a dream life? Yeah, I mean, I'd say find something that you're interested in or passionate about because it makes it a lot easier coming to work every day when you're dealing with something that you like. And then and just try to solve a problem in that industry. You know, if there's a product that can be created that solves a product or a problem or a service that you can provide someone that makes their life easier. Um, you know, and then just find, find mentors as well, because there's a lot of people out

there who are willing to help just because they want to see you succeed. Um, and, and don't, don't worry about asking, you know, if they say no, great, move on to the next person. Yeah. Yeah. If they say no, great, move on to the next person. Yeah, I mean that fear. I've talked on another podcast, like the fear of rejection stops many people, right? It's like asking a girl out, you know? Yeah, you got to do it.

We're going to say no and eventually one will say yeah. You'd want to say yes. You'd want, yeah. Good, all right. Well, I appreciate you coming on and we obviously have a very exciting trip now going to Necker Island this week. I'm so excited to spend the week with you there and talk shop.

And obviously a lot of experiences that I think we'll create there. So I appreciate it. And guys, until next time, look, keep living the red life. Keep working hard. Know that those problems are going to come. And today's episode was really to show you, hey, you're in e-commerce if you're trying to build e-commerce amazing industry and companies like this make it super easy to start and maybe quit your nine to five or scale your current company and then business lessons right like we've both been doing it way over 10

years and you learn a lot during that time. And the problems are going to be there. How you handle the problems will dictate success. Absolutely. All right. Well, until next time, guys, keep living the red life. Appreciate it, buddy. And I'll see you guys very soon.