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Sept. 16, 2022

Thinking of Ecommerce Differently With Gil Bar - Lev

Thinking of Ecommerce Differently With Gil Bar - Lev

This episode features Gil Bar-Lev, the founder of HomeRoots. HomeRoots is a novel wholesale platform that leverages “community buying power” by uniting sellers of furniture, lighting, and home décor and retailers and licensed trade in one place, making the B2B shopping experience in this vertical as easy as the B2C shopping experience.

Gil defines HomeRoots and its mission and shares why a retailer or a shopper goes to HomeRoots over other platforms.

Listen to Gil as he discusses where the sellers on HomeRoots have the most success. Discover who would be someone that should be selling or buying from HomeRoots and some actual sellers on the platform and Gil’s favorite case study.

Learn how HomeRoots make money and why Gil decided to create a marketplace.

Episode Action Items:

To find more information about HomeRoots, go to www.homeroots.co

ABOUT THE HOST:

Andy Splichal - Make Each Click Count PodcastAndy Splichal is the World's Foremost Expert on Ecommerce Growth Strategies. He is the acclaimed author of the Make Each Click Count Book Series, the Founder & Managing Partner of True Online Presence and the Founder of Make Each Click Count University. Andy was named to The Best of Los Angeles Award's Most Fascinating 100 List in both 2020 and 2021.

New episodes of the Make Each Click Count Podcast, are released each Friday and can be found on Apple Podcast, iHeart Radio, iTunes, Spotify, Stitcher, Amazon Music, Google Podcasts and www.makeeachclickcount.com.

Transcript

Andy Splichal 0:00

Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. And we're happy to welcome this week's guest to discuss today's topic, which is thinking of Ecommerce differently. This week's guest is the founder of HomeRoots. HomeRoots is a novel wholesale platform that leverages community buying power by uniting sellers of furniture, lighting, and home decor and retailers and licensed trade, all in one place. Making the b2b shopping experience in this vertical as easy as the B to C shopping experience. A big welcome to Gil Bar-Lev. Hi, Gil.

 

Gil Bar-Lev 0:33

Hi, Andy. Nice to be here. Thank you for inviting me.

 

Andy Splichal 0:36

We're excited to have you. Now usually I start with a question where I believe the answer will bring an immediate benefit to listeners, but your company homeroots. It's a bit different conceptually. So let's start with what HomeRoots is and does. And then we can get into some information that maybe have helped our listeners and growing their business. So in a snapshot, what is HomeRoots? And what is its mission?

 

Gil Bar-Lev 1:03

So HomeRoots is a b2b selling platforms that enable manufacturers of furniture and home decor all over the world, gaining market share in the US. Right? So our mission is to make to really democratize access to everybody all around the world. democratize access to to the US market.

 

Andy Splichal 1:24

Okay, so you've taken people selling furniture, lighting, home decor, so home stuff, and as well as is trade professionals, right, and you put them in one place.

 

Gil Bar-Lev 1:35

So we let everybody transact on the platform.

 

Andy Splichal 1:38

Okay, so you started your own platform. Now? Why would a retailer or shopper go to HomeRoots over, say, an Amazon or a Houzz or Wayfair?

 

Gil Bar-Lev 1:50

Okay, so those are, those are part of the retailers that are actually our, our customers. Right? So it's less about a retailer will come to us to purchase from us, okay, in a post to sell on the platform. So an online retailer may find themselves selling Amazon as a third party seller or sell them on your own Shopify side of Bigcommerce, or whatever e commerce dissident they're using. But they will turn to us to source their goods.

 

Andy Splichal 2:22

Okay, so somebody could be selling furniture, but they can source goods from you guys. Yeah. And is it dropship

 

Gil Bar-Lev 2:35

we provide dropship services for all of our customers. But as well as somebody who's doing bulk order, obviously, there's a difference in the prices for the two models. But we do offer drop shipping, that's our actual one of our core strengths of the platform.

 

Andy Splichal 2:51

Got it. So you were selling just to retailers who want to stock this stuff.

 

Gil Bar-Lev 2:58

Ah, no, we do any any retailer, and not just Rico any business we can buy from us, they don't have to be recovered can also be a designer can be a home stager property management report any business, generally speaking, that can provide evidence to the legitimacy of their business. Obviously, that by providing a tax ID, or stateless number, is something you're gonna gain access to or flattened. The beauty of our plasmid is that we don't have no minimum, right? So you can actually order a single unit, you don't have to order in bulk in order to purchase from us or purchase from the products that we offer on a platform. But obviously, if you are a retailer and you'd like to order in bulk, obviously there's a difference in price in that case,

 

Andy Splichal 3:45

and where are you? And where are you getting your products from?

 

Gil Bar-Lev 3:51

All over the world? Literally a little bit ago.

 

Andy Splichal 3:53

Okay, cool. So you're you're sourcing from all over the world. Now. I know, probably, you know, five to seven years ago, it was it was a huge thing. When you drop shippers were everywhere, where you just find a drop shipping company, you'd get the products from them, they'd send it out and you'd do the advertising. And a lot of people build very successful, especially Amazon businesses on doing that. Some on their own website, but mostly on Amazon. Have you found that that is still a viable path for somebody who wants to get into business? Or is yours more kind of dealing with companies to supplement their own product line?

 

Gil Bar-Lev 4:38

Totally depends on what your objectives are. Like, how big are you striving to be? And the way I look at that if you're, if you're looking to be a VPC brand and try to build up your your own brand as much as you can buy on Amazon, you can get a very good business by doing that. kind of in some ways are doing very, very nice business on the, on the platform, and they're happy about it. Right. So the accounts that the main factors were the importers that really want to go big and beyond that, they got to see beyond the horizon of Amazon. And the reason why I'm saying it is because Amazon by themselves, even if you include other marketplaces, such as how this is Wayfair, such as even Walmart could be opening it up, and eBay, all these guys combined, or not even accounting for 10% of the market share. If you think about it, everybody putting their efforts on the 10% market share, and everybody's trying to compete with everybody. Now, you can do, as I said, you can have a great business, I'm getting there, I'm not saying not. If you want to go beyond the 10%, you want to explore the horizon. And you want to be even bigger than what you can imagine, the homeless is your way to go. Because we're going beyond and we're going to places that you as the importer or manufacturer, you cannot go, you simply won't be able to transact with those retailers, he will never look fine. Even some of those businesses, you'll never get to them. But those guys combined represent a lot more than 10%. So going back to your going back into your question, it depends. How big do you want to be?

 

Andy Splichal 6:21

Yeah, you know, I loved that answer on the house and the Amazon, the Wayfair are only 10% of the business and you can use your products or sourcing products from whoever you are to focus on the 90%. Now, where are that 90? Where are you know, where is that 90% that.

 

Gil Bar-Lev 6:39

Okay, so still feel a lot of it is still in brick and mortar. And as well as other e commerce companies like what we call like a mix of E retailer with with a multi line retailer, like, I'll give you one example could be Home Depot, if you're below the media, the Macy's, the ask, there's so many other retailers out there, they're also operating ecommerce sites. So our platform, this will give you the access to get to get your products sold by those retailers to their end consumers starting off with their e commerce site, but then within time, in their actual physical stores. And that's majority of war to businesses. Now you have other untapped businesses, which is another very good percentage of the business of the market chair, which is the whole home stagers, interior designers, property management, all those guys combined, it's actually interesting, but they account for 5% of the market. There's just so many of them, right. So if you try on your own, you're never gonna find them. They don't buy their stuff on on Amazon, they buy through elsewhere, some of them buying it through the through homeroots, you actually gonna get access to them.

 

Andy Splichal 8:00

Now, what type of sellers on your platform are having the most success.

 

Gil Bar-Lev 8:09

So it starts with like a little really being attentive to detail, to feeling as much so everything starts with the product setup, the more details that you can provide on the product setup, the more likelihood that that product actually going to sell in the market, because the customers, the end, consumers will feel a lot more comfortable and more confident in shopping for that specific product. Now, this is a general rule, it's not just in homeless, but it is very much applicable for us just because we're spreading that information across the market costs whoever can sell it to the consumer. And so if we see the ones that are investing, the ones that are have actually invested in providing as much detail on product has found better success than others. Other ones that have found success are ones that are actually understanding that they actually understand that they're operating in a wholesale platform, they do not operate or operate in the direct to consumer platform. And therefore the pricing has to be more steep and aggressive to allow the retailer's actually to meet their margins while they're selling the products to the consumer. So it's a combination of price and product information. And if you've got them both together, you're gonna do just great.

 

Andy Splichal 9:30

You know, you had hit on a great part of conversion, which is product description, of course. Another really big one is social proof. Do you give reviews with products based on the products or is it up to the individual company getting sourcing your products to get those reviews?

 

Gil Bar-Lev 9:52

Yeah, so right now, so we put it up into this new way. So we We tend to evaluate the suppliers and the factors in our platform based on their own performance. For example, how quickly can they ship items? What's your inventory level? What can we put we put a lot of attention to those details, right when we emphasize them. So we give the supplier a certain score, which is totally transparent to them. Again, it's not about the world of like Amazon, where we're going to suspend or this is really not about that. It's just to give them visibility to see for them to understand how they operate, and what expectations from them in this segment, right in this relationship, and obviously the ones that perform, that's actually not a good point to what you asked me before, but what what are the ones that success successfully sell successfully, are the ones who actually performed quite well, meaning they have a good inventory level, they ship on time, don't have cancellations don't have issues with the pricing. Those are the guys that Excel very well. So as far as it goes on the seller level, we give them we give them visibility to those metrics to those KPIs. And as long as they need as long as they need those KPIs. They will do just good. On the product level, we give it we give the opportunity to the manufacturer itself to work on those reviews, and the quality of the product. This is something that at this moment in time we are less involved in, but okay,

 

Andy Splichal:

so so it's up, it's up to the wholesaler to get the reviews. Yeah. Okay. Hey, so your background was with toys r us where you lead technical integration with Amazon. And I was reading that, and that must have just brought some some really valuable lessons. What was that experience like? And what did you learn from it that you are using today?

 

Gil Bar-Lev:

Wow. That was a heck of an experience.

 

Andy Splichal:

I can imagine, first.

 

Gil Bar-Lev:

And it was fun. It was fun. Because we can imagine all the system as an environment, right? It's very smart people, super smart people very innovative, very entrepreneurial. In you have to live and breathe within that environment. Right. But which was very exciting for me at that time. But it also was the first time for me that I got experience with E commerce. Right. So what I've learned through that step is how really works on a big scale on an enterprise scale, and how to build systems from scratch that can meet an enterprise level size. So I've learned everything about integration a lot about the skills that are needed about the mentality about the type of people you need to cut systems in. And everything that goes around that. And this is something that I carry with me till today, because I really learned a lot of things I could have done. In any business, in any business, you get the ups and downs, right? And sometimes when you go backward, and somebody from the outside, they may say, Okay, those guys, you know, they made it, it was perfect. You know, it seems like everything was like a honeymoon. But at that time in disintegration, it was not. Okay. So you learned you learned that in the grand scheme of perspective that, you know, you have a cup and find that every business cycle has its ups and downs, and even the biggest guys out there, and that time, those guys were already big on both sides, even though they had their challenges and formations and teams and systems issues. But you know, collectively, that is not something that should break you and just makes you stronger and sorry. And using that cliche. You know, it basically gives you prepares you emotionally and mentally to build something from scratch again, when this time you need to lead it.

 

Andy Splichal:

So, so yeah, so Toys R Us they integrated with Amazon and then you know, then Amazon eventually puts them out of business. What can a listener learn about that when trying to compete on their own website with Amazon or even you know, caution of putting your stuff on Amazon?

 

Gil Bar-Lev:

Yeah, so I think you know, looking backwards and I remember the people that I worked with over there they were, you know, they went ahead with this engagement and partnership, but they did not go all and they don't really believe that they can or they should be taking the complete ownership. Mm. I have this ecommerce business, I think just to emphasize it more, they did not own the customer. That's where they lost. To me, John on the customer

 

Andy Splichal:

Yeah, you know, and that's one of the problems with selling your products on Amazon. You know, just like Toys R Us, you don't own the customer. So people love to shop on Amazon. It's so convenient, though. So how do you compete with that? What do you think?

 

Gil Bar-Lev:

The first of all, you got to differentiate yourself, you've got to be able to offer something to the customers that Amazon does not. Now, that's not an easy thing to do. But it's hard to go based just on the product level, because you know, by now, there's only so many products that have more than 250 million products listed on the platform. It is difficult to come with a variety of products that you won't find someone else that will mimic it and knock it off and put it on Amazon. Right. So you've got to come up with something else, you've got to come up with the service, something that Amazon does not offer. Right it can be and it can be very individual, to that seller can be sometimes independent, off, maybe it definitely cannot be on the price. I don't I want to be on the bidding on the price, no longer necessarily bidding on just the differentiation on the product gotta be on the service level, whether that's the customer service and look at that payment service, whether that type of delivery, that you can offer for certain events, in the experience, the shopping experience that you can create, that's going to be unique that one cannot find on Amazon, right? You really got to create an environment where shoppers will love. visit your site again. And going to have something sometimes even though it's digital still have some type of excitement, about opera about buying in your site versus on Amazon. Otherwise, there's just there's just another site out of millions out there that have attempted to compete against Amazon and just

 

Andy Splichal:

don't Don't be another choice for us. So if you had a if you had a crystal ball, where do you see E commerce heading in the next 12 to 18 months?

 

Gil Bar-Lev:

I think the next 12 months more or less will be I think I'm sad to say but certainly retailers that are are operating in the E commerce space. Unfortunately, I do suspect that some of them will disappear from the landscape.

 

Andy Splichal:

Oh, why do you believe

 

Gil Bar-Lev:

depends on the business side price depends on the retailers. Some of them are still have not adjusted to the way that marketplaces are working today and their scale and their speed and their working speed. But a single ecommerce or even single retailer cannot compete again, buy in with what you have right now with a decrease in demand, inflation rate interest rates, companies that are and I'm not going into specific balance sheets of every company. But if you put all those things together, you see that some of them are in big trouble.

 

Andy Splichal:

Interesting. Yeah, no, that's Oh, yeah, no, that's just it's interesting take ecommerce is been in such growth since COVID. But you know, I can see your point for sure.

 

Gil Bar-Lev:

a question I like to call Mrs. Jones.

 

Andy Splichal:

A quick question I like to ask every guest is, personally are there any business books out there that you can attribute to your journey as an entrepreneur?

 

Gil Bar-Lev:

Certain books,

 

Andy Splichal:

business books, specific books, yep.

 

Gil Bar-Lev:

Business. So when I, when I started, I read the book, Lean Startup. That's the name of the author. But that was the first one that I read in the, in the space. Personally, other than that, I tend to read more articles and publications, continued lists of books. For your audience, audience's like me, but I usually do a couple things at once. And it's hard for me to just stop and disconnect for a long period of time. And just, you know, talk on and book. So I like more of the short term reading or the short term listening. Is that like the podcasts, got it was that an audio or anything like that, but this is more nice.

 

Andy Splichal:

So what, what publications do you read?

 

Gil Bar-Lev:

So I read a lot of the faces digital 360 I read anything about the internet retailer? I follow those probably The patients on a daily basis. Other than that, I mean different user groups that they tend to publish more things by themselves was that usually the news of media and through different social media groups, that's where consume a lot of mine, day to day updates.

 

Andy Splichal:

Let's go back and talk about HomeRoots a bit more, who is someone that should be selling or, or buying from HomeRoots?

 

Gil Bar-Lev:

Okay, so selling on almost should be if you're a manufacturer of furniture and home decor, you should come to homeless, period. Very simple. If you are a company who is looking to resell furniture, you're not looking to manufacture yourself, but you're looking to sell other people's furniture, then you should come to homeless purchase from home. And that's in the fiction.

 

Andy Splichal:

And let's talk about some actual sellers on the platform. Do you have a favorite case study you could share?

 

Gil Bar-Lev:

Yes. I can share with you a certain company that we actually use in some of our case studies. Okay, so that's a company that started actually earlier this year. And usually the case study talks about, you know, how companies started when they first registered and got approved to be a seller on the platform. And usually what they do is they tend to start with up to 10 SKU, and right. And homeless is not still not yet. A well known household name like the cameras on as we'll discuss, right. So some cars, some retailers, some suppliers are not yet familiar with homeless and they're testing things out the ones who are tracking. So our use case talks about an effector, who uploaded 10 skews to the product, templates and products to the platform. And then within two to three months, it started getting some traction as far as sales goes, I think the vendor, by the third month, they were able to do about $5,000 a month with us. Again, and those were just for those 10 views. And then in a period of about six months later, they added 3535 Extra skews the appointment right now they're in their interface to wrap up this year at about 120k On the first year. And that's just for about getting big 45 skills, approximately. So this is a good use case and what we're seeing, right, and that's a company that is every size, I think before homeless they were doing, they can take their annual revenue or gross margin revenue was about five to 6 million. So you're looking at a decent sized company, not large, not too small. Not kidding around. But that's a classic use case for being homeless.

 

Andy Splichal:

And how does homeroots make money?

 

Gil Bar-Lev:

Okay, good question. All right. Let me steal the let me share the secret sauce. So. So we don't take any commission from the sellers on the platform. And we don't take the institution in that pace. But what we're the way that we're doing it is that we're actually getting this on the buyers, right. And based on how much the markets were how much the buyers and bears are paying for it, which is something that will give them enough margin that they need to sell the products in the market based on that we're taking our markup and making our profit off from that. So it's not a fixed. It's not a fixed markup. It's not a fee imposed goes up and down based on the market needs right now. For example, you know, this is a classic look, what has been happening here in the past two years, with two and a half years is a classic example of how prices are going up or went up. Now they're starting to go back down. And our system knows to adjust to as per need. It's not a fixed thing. It can sometimes be 1% and couldn't be more. Sometimes we don't even make anything. It's just to allow both businesses to transact and get get the item out there to the market and give it a try.

 

Andy Splichal:

Why did you decide to create a marketplace instead of I don't know trying to sell from your contacts and just creating your own e commerce Store.

 

Gil Bar-Lev:

So I came to a conclusion that it's time to so I've been I've been operating in a calmer state for the past 20 years. And I've seen throughout the years I'm involved. And now wherever you go, now you have a solution. If you want to go there as a consumer, what about some ecommerce system? like Shopify? Bigcommerce, WooCommerce? So many of them? Are you want to sell an octopus. And I did not want homeless to be another platform like that. Right? I noticed that if I want to go wholesale, and I want to sell b2b, there aren't any many platforms out there, if at all. Right. And I remember that after operating in the b2c space, for so long, I wanted to operate in the b2b. So I was actually looking for a platform to go into b2b and I couldn't find one. And that's what triggered homebrew.

 

Andy Splichal:

Well, this has been great how, how can an interested listener learn more if they would be interested in listing their products or seeing what you have to offer to supplement their products?

 

Gil Bar-Lev:

Here? So first of all, we welcome everybody. And so the way to get started is just to go and visit our website, which is www.homeroots.com. And from there, their journey can start, right whether that they want to buy or they want to sell, if they're looking for me personally, but if they want to reach out to me as in any type of the questions that could find me, usually I'm on LinkedIn. That's the platform that I'm mostly active on. And linkedin.com/gilbarlev will find me.

 

Andy Splichal:

It's been great. Is there anything else? Is there anything else you'd like to add before we wrap it up today?

 

Gil Bar-Lev:

This has been a great conversation. And we are really welcome everybody to take a look at the platform, take a look at homeworks and the opportunity that we can offer our audience, and most importantly, diversity, right? Even if these guys are selling on other marketplaces, or whatever it is. We are the sell channel at the end of the day that pretty much provides access to places that most if not all, the audience will not gain access to so see that as an opportunity to get additional sales. Yeah, let's make money.

 

Andy Splichal:

That's great. Well, thank you again for joining us today, Gil. For listeners. Remember, if you if you liked this episode, please go to Apple podcasts and leave us an honest review, review. And if you're looking for more information regarding Gil or homeroots You'll find the links in the show notes below. In addition, if you're looking for more information on growing your business, check out our all new podcast Resource Center available at www.makeeachclickcount.com We've compiled all of our different past guests by show topic include each of their contact information, in case you would like more information any of the services I've discussed during previous episodes. Well that's it for today. Remember to stay safe, keep healthy and happy marketing and I will talk to you in the next episode.