Scale On Shopify With Local, On-demand Production. Smarter, Faster, Greener | #249 Pal Naess

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Claus Lauter: Hello and welcome to another episode of the e commerce coffee break podcast. Today, we want to talk about how you can scale your Shopify business with local on demand production.

Now, a lot of creators and merchants out there have their supplier somewhere around the globe, and there's a long shipping times in there. And obviously it's not very good for an environment. So there are better times. And specifically, if you're looking into print on demand, that was a problem in the past, long shipping times a lot of shipping costs involved.

And there's a solutions for that. So with me to talk about this topic today, I have Pal Naess. He's the VP of growth projects at gelato. com. gelato. com, is a company that deals with print on demand. I will dive into that later. PAL have six years of experience at Innovation Norway.

He has served as a director of entrepreneurs and startups overseeing all aspects of supporting startup and early growth companies. And he is also one of Norway's, leaders of Norway's most successful startups and the winner of the 2015 Oslo Innovation Award. So he has a lot of background when it comes to startups and running businesses.

And let's dive into the topic today. Hi, 

Pal Naess: Paul. How are you today? Hi, Klaus. Very nice to meet you. I'm doing great looking forward to the talk. 

Claus Lauter: Obviously print on the mat is a big topic. It's around for a long time, but it was not very good when it comes to environment. A lot of merchants had to source their things from suppliers that were far away.

You came up with a better solution. Tell me a little bit about it. How does it 

Pal Naess: work? We have a 15 years history now or actually 16 and started out as a very, I would say a typical on demand online print store. we were selling a greeting cards. We were selling calendars.

We added photo books and started with local production, meaning that our Norwegian store. For our Norwegian store, we were working on a printer here in Norway, and then we launched UK and opened our store there and moved a little bit having launched both our online stores and with partnerships with the local print houses.

We saw that was a much better way of doing it. First of all, you avoid all the custom mistakes, you avoid the tax problems. And of course, the customers are getting these products much faster and much more reliable dealing with the Local post services. And then we saw that this service could actually like expand.

 We started working with businesses and of course businesses have the same issue. If you have a great corporate company, , if you have an office in Brazil, it's much better to print your marketing material in Brazil for the Brazilian office and likewise doing it in Japan for the Japanese office.

Those two things combined. Made us or took us into the print on demand and becoming a platform for the creators of the world. So what we can offer now is that we have a print, production network with 130 production partners in 32 countries. And with that, we can cover. We can cover the entire planet being more or less local.

And what happens then is that of course, for the ambitious, creators, the ones who really want to go global and sell across the planet, they will always find through gelato, a local partner to produce their products. It makes it smarter. It's. Faster. And it's a lot, lot greener, which is exponentially more important now, really 

Claus Lauter: interesting concept there, because obviously a lot of, Greatest out there on platforms.

They have a global audience might be YouTube, might be tick tock whatsoever. And if they come up with the idea for a product for their brand then basically starting off from scratch, a global business with your help. What kind of products do you see with creators are most in favor? Where do they start?

What's their starting point with them? With 

Pal Naess: gelato. t shirts, apparel is, big and is, growing having a fancy t shirts with a nice design, that's really something to be extremely proud of then something that people want to buy online. So of course, t shirts is probably the biggest product right now.

We come from a history with paper. And what we also see is. Fantastic wall art. Anything you can print to hang on the wall, whether it is on aluminum or you can print on canvas. You print posters and we sell them with frames and having this local network, it allows any creator anywhere in the world to sell to anywhere in the world.

Obviously, if I was a Norwegian creator selling, globally, it would be difficult. To think that, okay, what's going to happen with this framed poster on its way to say Indonesia. It would be very difficult to say this, the shipping should be this much, and it's going to take this long. And I hope that the poster will come to Indonesia, in one single piece.

Obviously printing it locally, you can do all that and you do get the price that is correct for the market. 

Claus Lauter: If I'm only interested in selling in certain countries and not globally, how does that work? 

Pal Naess: Oh, you are free to choose any country. And of course we have many customers who are local as well. Whether you do this on a local or on a global, to look global or to a local audience, that's entirely up to you and we have many of those customers, what we want to give them, is , if they want to grow there's a very good way of growing and make, we make it that growing very much easier through this planet. You have one interface into gelato and then the world is your oyster. Really? 

Claus Lauter: Let's talk about the interface. A lot of merchants, a lot of creators already are on a selling platform that might be Shopify.

That might be Etsy. How does that work? How do you integrate with these platforms? 

Pal Naess: Well, on the, say you, if you have a Shopify or if you have Etsy, we have online, we have the interfaces to there. So it's really importing and exporting the pictures importing and exporting your prices. The products, is extremely easy and we always want to make it easier for this.

The best way for gelato to grow is that our customers are growing is that they are adding products to the platform. So we want to make sure that's really easy for our customers. 

Claus Lauter: Give me an overview of what kind of products can I expect when I 

Pal Naess: work with you guys? we have a background from paper.

Whether it's within books photo books is our history anything on cards, greeting cards, anything that goes on the wall, I said, on different products aluminum, On paper on the canvas, et cetera, but of course now apparel is becoming more and more important. And then you have T shirt sweatshirts.

You have who these you have, more organic cotton and better products. You have mugs. You have, because of the name of your. Podcast, I obviously brought a cup of coffee here, printed on a gelato cup. Those typical products, but important to say is that we are constantly adding new products.

 As I say, we want to grow with our customers, when they, want new products, we will work hard to put those on the platform. 

Claus Lauter: Let's talk a little bit about the design creation process. How do I get my design in there? What kind of requirements does your platform need to get the product designed?

Pal Naess: Well, when you join our platform and you both have like an upload function, but you also have a designer. What we are really believe in is personalization. And what we want to help our customers do is selling personalized products if you have a design and you. Maybe you want your customers again to be able to write their names on the products.

That's possible. And we make it that extremely easy through the Virgil Auto platform. upload the PDF and work in our designer tools , to make your design suitable for your end customers. 

Claus Lauter: Now, I'm not a big designer. Do you have any kind of templates or any kind of ideas that I can source from?

Pal Naess: Absolutely. We both have, shutterstock. We have a shutterstock library. We have templates. We have a lot of designs that are already there. So you can also go in and just play with what's already on the platform. Obviously, if you are using shot to stock, templates or pictures, there will of course be a fee for selling those, obviously.

Claus Lauter: One drawback that I saw a lot of print on demand and drop shipping suppliers out there is when the product gets shipped, it's in a brown bag or in a black plastic bag, which obviously does not really speak for your brand. How do you deal with that? Is there any kind of option for custom packaging or what do you do?

Pal Naess: We have started the selling custom packaging. It's not available all over the planet and for all products yet, but that's something we're definitely looking into. we agree on this and then but what we do see is that the speed of delivery is really trumps the packaging. We are really like working hard now on rolling out our platform, getting more and more local.

 Seeing that this is the best way we can help our customers. But of course, we're also looking into the individualized packaging. 

Claus Lauter: Now, talking about sustainability, shipping, shortening, shipping, shorting the way to the customer is one thing, but also on the product side, probably sustainability when it comes to, I don't know, sourcing the right products is a topic there.

How do you deal with that? 

Pal Naess: Well, both directly that we are in charge of the sourcing and helping our production partners getting the right products, but also working through our product production partners, making sure that they know which products they are selling. We also want to teach our customers to choose better products and have been working with a sustainability calculator to give the right answers.

What we all want to do is to help our customers. make their customers again, make the best choices. So we want to make sure that what we're selling is the best. I have the best sustainability track that you can get. But of course, it's not a secret that for us, this local, that the notion about local is really the way we are working hardest on the sustainability side, believing that, flying products across the planet is not the way of doing it in 2023.

Pal Naess: No, 100 

Claus Lauter: percent agreed on that one. That's not a good idea. Now, when it comes to your partners globally, how does it work with customer support? You have all these partners. If I have a question, if there's returns or whatsoever, how does that work? 

Pal Naess: Everything goes through Gelato. You will not deal with our partners.

You will only deal with Gelato and we take care of the rest. We see this as a partnership and I think I've probably used the word of production partners several times already in this. This is a partnership we come with software and they do the difficult work of making sure that we are sending out high quality at the time that we should.

, so any customer service questions would come to Gelato and we will take it with our production partners. 

Claus Lauter: Now, you have shipped, I think, about 10 million products over the years, so a huge amount. Can you give me some examples of customers that do very well or what do they do different than others?

Pal Naess: When we started in 2007, starting an online store selling this, these types of products was very difficult first of all, there was no cloud computing. We had to buy the servers. We had to register, getting. Paid with card was difficult. You need the different, agreements with visa versus MX versus PayPal, et cetera.

there's so much now that makes it a lot easier to start these stores. But of course that is also has a downside. There are so many of these stores now. So I think first and foremost, you have to be different. You have to find your type of product and know what you're selling to whom, who is your customer and make sure you do that really well so that your customers are happy.

Speaking to their friends about your business. The best way of growing is really finding your niche and do it really, really well. 

Claus Lauter: Now you worked in the startup scene for a very, very long time. What would be your advice for someone who is really at the start of founding a business and looking into print on demand as one, maybe the one pillar of their business?

What would be your advice to start? How would you. Start nowadays? 

Pal Naess: Would think very hard on like, what am I selling? Is this really something that customers would want to buy? , that's really the business, or the first thing you have to do in order to finding that product market fit.

Is your product something that the market wants? And then I would have ambitions because the only certain thing is that if you want to be big, you have to start thinking big and therefore I would take it slowly and then like, no, when I would do it, things I would start selling globally, right away, very early and start.

I think having that global market, is such an opportunity that you can't afford saying no to that one. I'd say. 

Claus Lauter: Now, going global is something that people have in mind, but I think a lot of startups or early stage businesses are just too scared to go global. With a platform like Gelato, it's quite easy.

What's In your plan, what's coming next? Are there any plans from your side to make it bigger to 

Pal Naess: grow it? We will continue growing, both in a form of more products on the platform, but also with more partners around the world we want to be increasingly global and we want to be increasingly complete when it comes to the number of products.

As I said already, our best way of growing is growing with our customers They're staying very close to our customers, answering their questions and also their demands when it comes to serving them across the planet. That's our ambition. We really have an ambition is that anyone should be able to produce whatever they want, whenever they want and where they want it.

That's still a lot of ambition. Then we're going to work very hard in order to fulfill that one. Okay. 

Claus Lauter: Talking about that, how does the onboarding process work? What do I need to do to get started? 

Pal Naess: Well, the easiest thing, it depends a little bit on your size if you are already an existing big customer, if you are selling a lot already, or if you're just starting, we make it very easy.

And of course you're only paying for what you are actually are selling. So we have this self signup, a service, so you can just go in and very easily try to order a couple of samples to yourself if you want to, or you can connect to your store right away. In a couple of clicks, you are up and running with gelato.

Claus Lauter: Okay. You said the pricing structure, obviously you only sell only pay for what you sell. Give me an idea about what's the sort of average price, for example, for a t shirt and what's your kind of profit margin on pricing structure on that side, just to give our listeners a bit 

Pal Naess: of an idea. You know what?

All the prices are online. I would Be very careful on commenting too much on the prices and the margins. I think it's the best thing. It's also so, so dependent on the different markets. So I think the best thing would be to actually go onto lotto. com and look at the pricing.

 It's all there and it's a very easy way of finding with the calculator on the, both the price and including the shipping, it will also show you the delivery times. There's so many different products on this platform. There are so many countries. Last year we delivered to 190 countries.

We had customers ordering from 156 countries and delivering to 190 different countries and territories, I should say. So go online and have a look at the pricing and you'll see that it's definitely possible for any creator to build a business supported by Gelato, I should say.

Okay, that sounds 

Claus Lauter: great. Before we come to the coffee break and today, is there anything that you want to share with our listeners that we haven't covered yet? 

Pal Naess: As I say about making yourself special, , doing something different than the others, I think sustainability is a very good way of going for many more stores.

And I think us going local, us putting this focus on local is something that our customers should be using as well to their benefit. I think it's good if you are having a store to tell your customers again, that you know what, if you are ordering this product from our store, we will make sure it's going to be produced as close as we can to your end destination.

I think this is something that's increasingly matters to everyone. And it's, just like for gelato, this is something that our customers should use in their marketing. And when they are presenting their companies. 

Claus Lauter: Absolutely. I liked the approach of having it produced locally, but still being able to deliver goods on a global scale.

Really good. Where can people find out more about 

Pal Naess: you guys? Well, the easiest way is of course on gelato. com, online. And of course, also if you follow us on Instagram, on all the normal social media and on LinkedIn, you're going to be learning a lot about gelato, but gelato. com is the easiest and the best way of getting introduced.

Claus Lauter: Okay. I will put the links in the show notes. Then you're just one click away. Paul, thanks so much for giving us an overview. I think it's a very interesting concept. It has been proven to be successful and I hope that a lot of merchants will try it out and get their products shipped globally, but produced locally.

Thanks so much for your time today. Thank you, Klaas.