In this podcast episode, we discuss how to survive a recession and a build more resilient business over time. Our featured guest on the show is Mario Peshev, Business Advisor, Angel Investor, and CEO of Rush, DevriX, and GrowthShuttle at mariopeshev.com.
On the Show Today, You’ll Learn:
- What are some industries that are thriving despite the economic challenges.
- How can businesses prepare for a recession and make the most of it.
- How can businesses expand their product offerings to attract more customers.
- What strategies can help businesses retain their customer base during tough times.
- Are there specific advertising platforms or channels to consider during a recession.
- How can entrepreneurs adapt their business models to changing economic conditions.
- What benefits can pay-later features and solutions bring to an e-commerce store.
Links & Resources
About Our Podcast Guest: Mario Peshev
Mario Peshev is a Serial CEO of Rush, DevriX, GrowthShuttle, and other products. Business advisor, angel investor ambassador of SeedBlink in Bulgaria, and ambassador of Flippa in Bulgaria. I've been in the web development and business space for over 17 years, having built my first website in 1999, switching to WordPress around 2008, and advising many $1M-$50M SMEs. On day-to-day I wear different hats, from working closely with tech teams, marketing strategies, and business solutions for Shopify and WooCommerce vendors.
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Claus Lauter: Hello, and welcome to another episode of the e commerce coffee break podcast. Today, we want to talk into a topic that every mountain version should have on the list. It's the economy overall. So we want to talk about the topic on how to survive a recession and thrive and make the best out of it. With me on the show today to talk about this is Mario Pescev.
He is a business advisor, fractional CXO, CEO of Rush, Defrix, Gross Shuttle, and other products. He's also an angel investor of seed. Blink in Bulgaria and ambassador of Flippa in Bulgaria. He has been in web development and business space for over 17 years. And on a day to day basis, he's wearing different hats from working with tech teams to creating business solutions for Shopify and WooCommerce vendors.
So he has a very vast background in running a business and that's one we're going to talk about. Hi, Mario. How are you today?
Mario Peshev: Doing great files and thanks for the intro. I think I should probably hire you for my next PR person. So if you're open for that,
Claus Lauter: Mario, we are all business owners and we are all sort of victims of what is happening in the world right now.
And it seems that we are a bit in for a rocky road ahead. From your perspective. What do you think is happening right now? With the economy, with recession, with inflation, just give me a bit of an idea.
Mario Peshev: as you mentioned, I'm involved with a number of different businesses, right?
On the one hand, it's Rush, which is a Shopify app, and we have over 2, 700 stores. On the other end, there's , Deverix and remains some of the largest publishers on the planet, including affiliate and e commerce also as a business advisor, I work with hundreds of businesses. So I have a pretty diverse.
Perspective and an outlook of the general microeconomy. And it's something that I'd like to do for fun, even though it's not the funniest thing for most people out there. But on the bright side, honestly, the thing is looking into the latest micro results, looking into how the fat has slowed down the interest rate increases lately, even though they still did a, 25%, just a week ago. we are actually in a pretty good state right now. And I just want to reassure everyone else listening to the podcast that despite everything that has happened over the past year, despite the several waves of layoffs among the largest companies out there, the major drop of S& P 500, we are in a really good state right now, for example, just taking a look at the Q2 data that was just released late in July and early in August Meta just reported 11% revenue growth.
And as we know, Meta is primarily making money off of ads and ads are coming from brands trying to advertise their businesses. Which in result means that , maintaining the same cost per click for the most part on MetaSend businesses, brands, stores, publishers, consume DTCs, manufacturers, everyone else, 3PLs are still investing in investing 11% Heavier as compared to last year in Q2 this year.
That's one thing. Alphabet, which is Google, and this includes Google and YouTube, they exceeded expectations, both on top and bottom lines. And the Google Cloud revenue is also by 28%, which again, in turn means that More businesses are signing up and hosting on Google cloud. And also everyone using any form of Google cloud resource, including a big query, which is a main machine for delivering data and storing and aggregating data.
That's also growing in Q2. Shopify, of course, everyone's interested in that reported 31% growth in total revenue and cashflow. And it's also cashflow positive for a third quarter in a row, right? Amazon, once again, they just had Prime Day, mid of July, and the Prime Day numbers were record high this year.
I think they generated about 375 million orders over the course of 48 hours, up from 300 million last year, right? So it's over 20%, 24% or so increase compared to what they did last year. So all things considered, when you look at the general macro, people were... Still spending, businesses are still spending on ads, consumer intents and behaviors are still up in the air.
And we are in for a , pretty good rest of , 2023. I just want to remind is that normally Q4 is the strongest period of the year for everyone in e commerce, meaning that, considering we are just about to enter Q4 we should be pretty safe up until the end of the year and unless there are any surprises Q1 should be Again slower than Q4, of course, but hopefully not as bad But at the very least, the rest of this year should be smooth sailing, onward Nope
Claus Lauter: I'm in Argentina right now and they have sort of hyperinflation here.
It's interesting because the economy here is actually booming. So the money gets devalued in a very, very fast rate. And everyone is shopping. Restaurants are full. Everyone is carrying around shopping bags because people think is I rather buy today because tomorrow it will be more expensive. So I'm not sure if that's going to happen next year.
We might see something like there. Now there's obviously certain industries that do better than others. Right now. that applies for e commerce as well, from your perspective, working with so many businesses, do you see specific verticals or industries that have a good time and some that are good, have a struggle right now?
Mario Peshev: Absolutely. So the jewelry market, bracelets beauty, cosmetics, all of that is still booming, which is. I would say it's slightly interesting because normally it's more on the luxurious or it's higher on the master's hierarchy of needs pyramid. But at the end of the day, this is still a market that's still booming and all of our stores, especially on the rush and are generating extremely, incredible results right now.
Apollo is going down. All forms of clothing are generally going down from what we see, primarily due to the fact that after three years of a recession, people are trying to go out more and just spend more time trying out clothes and those not really deal with any of the specific risks of returns.
Wrong sizing, wrong clothing in itself are some of the specific. Problems that most people are dealing with, which is why the kind of clothing industry is slightly worse than it used to be groceries are up from what we see again, consolidated data of over 400 million in GMB that we generate that we.
Managed last year and more or less the same what we do this year is groceries are still up and that's primarily due to the inflation, right? So the GMV is definitely up due to the inflation. The volume is slightly down because of the end of the pandemic. But , it's more or less still the same and slightly growing.
So these are some of the patterns that we see. There's some seasonality as well. For instance, in April and May, we saw a lot of growth in the outdoor industry, right? Anything for your garden, for your patio, for anything else that's kind of outdoors. This was a pretty strong, pretty significant category out there.
Another thing again that we see right now is indoors home. accessories, kitchen, any additional stuff for indoors, because again, summer is going to be over soon and people are preparing just to, renovate add additional accessories to their homes.
Claus Lauter: You mentioned before that people are still buying and Q4 obviously is the strongest quarter of the year and merchants should be by now ready with their strategy.
What's happening in this three months to make the most out of it, but you can also make your. Business more resilient for a recession. So there's some strategies around that. Tell me about how you would do that.
Mario Peshev: I would say that one of the key things and my rules of thumb is diversification, right?
Whatever you do, regardless of whether you're in DTC and building a strong brand or in dropshipping, make sure that you diversify as best as possible. I'm going to give a specific example here. One of the challenges that I deal with as an advisor speaking to different store owners is they have one source of traffic and one specific website, probably one or two specific products or SKUs that are killing it, right?
They're generating over 80, sometimes over 90% of their revenue. That's great up until it isn't. Just earlier today, I heard from a friend they woke up and got their Facebook account banned due to a random post they posted, or they may or may not have posted. Now it could have been a bot or their account got hiked or it's something they post as a comment and got flagged, whatever it is.
So their account got banned. And we know that Meta is the key channel for generating revenue and sales for most stores. So imagine you wake up one day. Metas has banned your account. You may have to appeal. It may work eventually, but you're probably going to be disconnected for like at least a week.
That's a pretty frightening thought in itself. So most people are dealing with once again, one source of traffic, one specific store or kind of a brand and one or two specific products that they're dealing with. So first and foremost, diversification is key. Make sure you expand the number of SKUs or expand the number of products if you can.
And especially if you're in dropshipping, just launch different stores, right? We work with dropshippers at home, 10, 15, even 20 different stores, especially on the rush side. because rush is supporting so many different things for dropshippers in particular on the Shopify end. But lots of, , entrepreneurs launching 20 different stores.
Right. One is for electronics. One is for, some beauty stuff. One is for outdoors. One is for jewelry. One is for beard oil, right? Different SKUs for different kinds of pro just to diversify. If you're on meta, look into TikTok, look into influencer marketing, look into SEO, look into brand attribution.
I always advise regardless of whether you're brand first or. More about the traditional dropshipping, which is, we launch something, we scale, and then we can launch 50 other different stores. building a brand is always helpful because you retain your audience in the long run, right?
They're going to stick around. They're going to convert better. They're going to support you. There's in some cases, especially in times of recession, we've seen people prioritizing their favorite brand just so that they can support that. Even if it means cutting on alcohol or going out or anything like that, right?
Just the sheer support being a true fan of a specific brand or specific product is so helpful that they can literally save you. In times of recession. So definitely think about it.
Claus Lauter: Yeah, we're definitely on the same page there. So diversification, I also pray that to everyone, probably the most important thing you can do.
Now it comes with the drawback that a lot of smaller and up solopreneurs, small and medium enterprise, they only have the skillset built up for one specific ad platform for Facebook ads or for Google ads, and then they struggle. But it's definitely worth to find ways to test all the other platforms and see where your audience is.
Now, I like that you say build up your followership, your super fans, because they will carry you through the bad times, looking into a little bit of strategies on how you can facilitate apps or solutions on your website, on your store, like pay later features, what do you think would work to.
Basically put, draw people in for a long term into your business.
Mario Peshev: There are several things here. So first off in terms of brand building, I think that lots of store owners are under. Valuing and underappreciating the importance of building their own personal brand. And that's something that's really unique to the e commerce space, right?
So as someone who also runs other businesses and is an angel investor, speaks to investors and journalists and, other CEOs and majors and so on, my go to, I spend a good chunk of my time on LinkedIn. So I go on LinkedIn, look at brands, look at people. and essentially that's how we connect and grow.
Alternatively, I spend time on Twitter because lots of the VCs and angel investors and also store owners and startup founders, including Shopify app founders and journalists, which is essentially media and PR. are also on Twitter, right? So these are the two networks that I use. And again, I understand there are lots of Facebook communities, there are Discord communities, there's Instagram.
So I'm also there, even though not as active, but I'm always surprised how hard it is sometimes to find a store owner or even a store page just listed out there several examples yesterday, I want to connect with the store owner that signed up for our Shopify app, just because they were local.
knew they were in Bulgaria. So I just wanted to reach out to them and I couldn't write. knew the founder's name. I couldn't find them online. I found their Facebook page. It had zero posts whatsoever, right? They were generating say a half a million in, GMV, but they were nowhere to be found, right?
No LinkedIn, no Twitter, no nothing. Another example is we had a partner. A partner agency that signed up with us probably three months ago. They signed up one store, another store. We generated so much revenue for their clients that they signed up another 10 stores over the course of probably six weeks.
So I just wanted to send them a gift it took us probably a week to get their office details in order to ship. And even. Knowing their office details, I just sent them a basket yesterday, by the way with champagne and cheese and biscuits and all that fancy stuff, just as a gratitude gift, right?
Just supporting us and loving what to do, but it was so hard just finding these people online. Now I have their names and phone numbers and others and companies, and I can still find nothing about it. Bottom line, I digress a bit, but, it's so important. It makes so much difference building a brand to be recognizable, to be known for something, that it carries so much value that there's hardly any reason , to avoid that.
So this is probably going to be one of the key things I would like to mention. You also brought up, buy now pay later. That's definitely a thing in 2023, right? It's growing. It's booming. There's specific industry specific categories. On the one hand, we have teenagers, well, late teenagers college students and so on in their early twenties.
They cannot afford some stuff, but they like, right. So they're trying to spread around. And do the credit card alternative nowadays, which is buy now, pay later. Nothing wrong about that. If they're cautious consumers in the future, there's also people trying to buy new equipment or trying to make use of specific deals, like cheaper laptops or cheaper tablets or show that they can possibly use for work, right?
They simply cannot afford that yet. Right now there are around 360 million buy now pay later users, right? The market itself is worth over 150 billion. We definitely shouldn't neglect that. All things considered lots of things that people can do. Especially, store owners and both drop shippers and brands and print on demand and everyone else in between.
And kind of one of the easiest things, speaking as a Shopify app owner is, setting up rush. , we've seen that first and foremost generates an average 2 to 7%. Increase in GMV and average order value for our store owners, right? You set it up. Tracking page comes with recommended widgets with bundles and products and upsells and so forth.
That alone, just setting it up gets two to 7% increase in average order value. That's one thing. Our higher tier customers get access to Klaviyo workflows. these flows have been tried and tested. And we know that on average, we get a 5X return on investment over the first 30 days. You. In fact some of these agencies that I've been mentioning, setting up users, they send the screenshots 48 hours, 72 hours later saying, Oh my God, guys, what we see is 2, 000 or more generating extra revenue just from the flows alone.
Right? So we have Klaviyo, we have the upsells on the page and that's an easy win. we have several far brands like primal harvest, like a burger, like some of the other players that we work with, some of them have reported over 2000% ROI. Now imagine spending a hundred dollars and getting 20 X, right.
Just getting 2, 000 back, investing a thousand dollars, getting 20 grand back. If we were able to do that in real life outside of e commerce, everyone would be a millionaire overnight just because it's now possible. What I'm saying is again, Rush is one of the solutions that it's set and forget.
And our team can definitely help you out with that. That's one of the solutions, but look into other alternatives and other options to just provide better user experience to your customers, right? Abundant cards, again, reasons, Clayview, OmniSend, and everyone is important. Abundant cards are increasing additional revenue for you, right?
Surveys all that wheel of fortune type of thing, so that you can capture emails or capturing SMS, the ability to send follow up emails and campaigns make use of all the, back to school campaigns. , now we have. Black Friday and Cyber Monday and Christmas.
There's so many different holidays in between that people need to tap into. One of the things, for instance, and I mentioned Prime Day a bit earlier on the Amazon end Amazon generated sent shipped over 375 million orders over the course of two days. Speaking to Shopify owners, I'm saying, are you ready for Prime Day?
And they're no, this is a Shopify holiday. Sorry, this is an Amazon holiday. And I'm like, what are you talking about? People are out there ready for a major holiday. Amazon has invested maybe over 50 million or so in advertising. To make sure they are ready for this day. And you're not tapping in that opportunity at the same time.
I'm giving a call to an ABA aggregator, right? A business running over a hundred different brands. And I'm asking them, are you ready for prime day? And there we sure are. Half of our stores already have banners and deals up and discounts and all that because it's the same holiday for the shopping period, right?
I can rumble about that probably for hours, but so many additional opportunities, just zoom out a little bit. Take a look at the broader e commerce ecosystem. It's so diverse, right? See what happens in WooCommerce. See what happens in Amazon, in Etsy, in Walmart, in Target. They run different campaigns.
They compete with each other. And just learn from them, right? Try to get the best practice for different systems and services and apps and brands and everyone. And this is really going to help you elevate and optimize everything for your digital
Claus Lauter: business. Whoa, there's so much good tips in there.
So I want to take one step back, obviously being present with your contact details in the market is so important on so different, many, many levels. First of all, on your website, and I see that a lot specifically on , dropshipping stores, that sort of trying to hide you. There's no contact details whatsoever.
That does not really build trust. That does not really help you with building up enough trust to build a brand. So you should have your contact details on your website with who's behind the company, who runs the show, maybe even who's the founder and so on and so forth. And on the other end as you said, be as a founder, as an entrepreneur, be public on LinkedIn, on Twitter, as you said because that helps you.
Sometimes even if things do not go well, if you need a co financer, if you need to have another partner, whatsoever, if you have built a network there, that will definitely help you to reach out and find the right person to help you with whatever challenge you have in your business. I have plenty of examples on how that works in a positive favor for you.
Now, before we come to the end of the coffee break today, is there anything you want to share with the listeners that we haven't covered yet?
Mario Peshev: I really love your comments on branding. And again, I just want to reiterate. So if you take a look my Twitter feed looks like, right this morning, looking into the founder of rich.
Looking for a content strategist and willing to pay a million dollars for that, right? We have, founders of Jim shark or Woody any of the top famous popular brands. There's Nick Sharma who's so active out there, right? This is Twitter and LinkedIn and all the other networks. So there's a reason why the guys that we admire and we learn from are so loud out there.
They're publicly available. They speak so much. They preach so much, right? not trying to learn from them is counterintuitive. So that's probably the only thing it's nothing new. It's more about food for thought. Why does everyone successful spend so much time online? Because this is the way to connect, especially after three years of pandemic.
So many people who weren't as active online are now online and they're already used to just being approachable available. There are also specific services, such as what was it? It was mastermind masterclass. Uh, just, Just forgot the name of it, but you can actually reach out to these DTC.
Influencers, and speak with them and connect with them. Masterpass. Yes, this was it. So go master pass. You can speak to some of the brightest mind on the planet. So right now these people are spending more time online. They're the tip of your fingers and just building brand awareness means that you're going to be more visible, more recognizable, more trustworthy and expand your network as a result.
Claus Lauter: Now, with your vast experience, you're helping your clients. Tell me a little bit about who is your client and how do you help?
Mario Peshev: Well, that probably depends on the different, businesses that they're with. To sum it up, my main focus is working with different businesses from the broader Shopify, Amazon e commerce ecosystem, right?
We work with software service. We work with data companies. We work with three PLS. We work with manufacturers who work with factories, and we were just trying to build that bundle. My personal philosophy is that the e commerce is a broader industry. And as I said earlier, most people are just trying to niche into one very specific thing.
Well, that's not how it works. We partner up with other people, right? On the road shop, we have. Partnership managers, we have people who build relationships with other app founders, with agencies, with team developers, with PPC people, with conversion rate optimizers, with everyone else, because you want to make sure that whenever we connect to someone, right, a Shopify store, a 3PL, someone who wants a kind of a deeper, broader integration, we want to make sure that whatever problems they face, we can include them as a bundle for them.
Like say, Hey we can set up a rush for you, for example. Right. But on top of that, Hey, did you know that you can set up, be profit for dashboards. And by the way in top of pay view, you can also do retention. com for acquiring additional revenue from that. And we have a conversion rate optimizing expert.
Here's an agency for that. Here's for that. Our mission is just supporting businesses and supporting brands by all means with whatever they need, because. We've been in business long enough and I myself again have been in business for almost 20 years now. So I have had that fight already.
I've walked the walk and I know what businesses are struggling with, right? On my own blog, I have the 38 biggest business challenges that companies face at different points in time. This is something that got picked up by over 30 universities out there, right? I get, reached out by Northeastern and by...
So, so many universities just using that as a resource. So again, helping other people out, just being more present, being more public is not a bad thing. Even if you feel that drop shipping is just buying something from Asian setting to the States, that's not necessarily right.
You're providing opportunities. You're giving the ability for people to reach and learn about this product because otherwise they wouldn't to get an opportunity to get clear, transparent shipping, connect with you. Get the best offers the best deals because people are lazy. Don't forget that people are lazy again, many price conscious shoppers, but people are generally lazy.
So understanding that means that you being the go to place to provide these opportunities, provide this product is not a bad thing. And you can actually even get to the point where you charge high ticket drop shipping items instead of just trying to be beat, to the race to the bottom. So again, some food for thought here.
Claus Lauter: No, that's very, very true. Mario, where can people find out more
Mario Peshev: about you? My personal website is mariopeshev. com. People can look up Mario Peshev on LinkedIn, on Twitter, which I spend most of my time. For Shopify stuff, rush. app is our own app and, feel free to reach out personally if you have any follow up questions, it was definitely a pleasure, Klaus, and thank you so much for having me and giving me the opportunity to talk about the broader ecosystem once again.
Claus Lauter: Absolutely. I will put the links in the show notes. Then you're just one click away. And thanks for giving us an overview. The future is bright for e commerce. No one should be, scared for what's coming. And if you're really to our listeners, if we really want to talk to someone who knows what's happening out there and need some help, then please reach out to Mario.
Thanks so much for your time today and
Mario Peshev: talk soon. Thank you. My pleasure.
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