Scale Your Brand With Flexible Funding w/ Dana Oren from 8fig.co – #32

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The Brand Builder Show
Scale Your Brand With Flexible Funding w/ Dana Oren from 8fig.co – #32
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Welcome back to another episode of the Brand Builder Show! 

This week we’re joined by Dana from 8fig – a flexible funding solution for Amazon sellers and eCommerce brand owners.

In this insightful episode we discussed:

  • How to strengthen your supply chain for ongoing growth
  • What funding options are available for growing businesses
  • Whether you should scale or sell your business for maximum reward

Learn more about 8fig – www.8fig.co

Helpful resources:

If you got this far, there’s a chance you enjoyed the episode… if so, please consider leaving a review – we really appreciate it!

Talking Points:

00:00 Introducing Dana

05:05 Optimizing supply chains

08:32 Flexible Financing Options

15:11 Good time to use 8fig services

18:21 Why take on financing?

20:44 Benefits of not selling your business

26:04 Timeline for credit repayment

27:37 Dana’s recommendation

Ben Donovan 
Hey, guys, and welcome back to another episode of The Brand Builder show today we’re going to be talking all things supply chain financing, whether you should sell your business or try and scale your business. We’ve got so much to talk through today. And I’m glad to have Dana on the show with me from eight fig. Dana, welcome to the show today.
 
Dana Oren 
Thank you so much. It’s actually Donna.
 
Ben Donovan 
sorry, that’s poor podcast.
 
Dana Oren 
No worries. There’s really no way to mispronounce your name. So I can’t get you back.
 
Ben Donovan 
And you can call me Bin or Bon or either no, there’s
 
Dana Oren 
 Bin it is
 
Ben Donovan 
When I went to New Zealand few years ago, and I’m called Bin there. So that’s, you know, that’s pretty bad. You know, like a trash can. So we call our trash can Bin in the UK. It’s unique.
 
Dana Oren 
I mean, there’s no yeah, there’s no sort of offensive connotation to Dana. It’s just not money.
 
Ben Donovan 
Sorry, Dana. Great to have Dana on the show. Yeah. Got down on the show. Thanks so much for joining us. I’m looking forward to diving into this. Can you tell us a little bit about yourself? Tell us a little bit about 8Fig. And then we’ll dive into into the questions today.
 
Dana Oren 
Yeah, absolutely. Thank you so much for having me on your show. So I’m Dana, I’m eight figs, VP of product. And eight. Fig is a holistic solution for E commerce sellers to grow their stores, whether that’s on Amazon, Shopify, eBay, Walmart, etc, etc. And we help sellers grow their stores in a number of ways. One of which is funding, of course, providing capital in order to execute any stage of a seller supply chain. And then other ways include helping out with custom tools for planning supply chain for managing its execution, coming soon, also booking various parts of its execution, and then analytics.
 
Ben Donovan 
Nice. And how long has it been around?
 
Dana Oren 
A little over two years, and it’s been such a wild ride. So, so far, we’re so fortunate to have amazing sellers by our side for a better part of those two years, but also new sellers coming in all the time.
 
Ben Donovan 
Geez, yeah, we all you’re saying about all the stuff you’re doing, I’m thinking you’re gonna say 10 years, 15 years, two years, ask them rapid growth.
 
Dana Oren 
And you know, what, it’s, it’s been two years plus, and it’s felt like, I don’t know, six months? Because it’s just go go go. It’s nonstop.
 
Ben Donovan 
Yeah. Yeah. And we were connected, because one of our Brand Builder University members is actually use your services, growing rapidly with their business and, you know, has used your services to keep growing quickly. And, and so it’s amazing that you guys are, it feels like you are really championing the sellers. And you are resourcing them to keep growing, keep winning. So it must be an exciting role that you get to play to seal this, seal these victories happening.
 
Dana Oren 
Absolutely. So we’re fortunate enough to have really a front row seat to all of these sellers growth, but it’s exactly what you’re said, You’re where we’re aiming to really champion these sellers, and look at their benefit in every single new feature that we roll out in every experience in every tool that we develop. So that, you know, first and foremost, they’re experiencing the growth that they’re capable of that the demand out there dictates and then that they can conquer more and more as they go by making every single process in their business more efficient. So we were talking a little bit about right before we we hit play, we hit record, we were talking about the quintessential seller profile of this just perpetual Hustler, this person who’s the immaculate generalist knows absolutely everything about everything and can handle anything that you throw at them. So that’s what’s really amazing about these sellers, a lot of times they have absolutely everything that it takes in order to grow. They just lack capital. And sometimes they lack a little bit of focus, you know, prioritize for me, what should I tackle first? And that’s where he comes in.
 
Ben Donovan 
Yes, good. So good. So you must, you definitely have a unique insight into the journey of sellers really scaling their business and that’s what we want to dig into. today. We’ve got sort of three core sections that we want to go through in this interview today. And the first one is about supply chain. As you mentioned, you guys would be really getting into the into the weeds with sellers, kind of pulling up your sleeves and helping them optimize supply chain. And that’s what I love about your proposition is it’s not just hey, here’s a whole bunch of money go spend it is how do you use this to optimize the supply chain journey and many other aspects, of course, but specifically on supply chain. Talk to us a little bit about what you’re seeing with your most successful clients. What are they doing right now, in the continued crazy times that we’re living in to really optimize that supply chain? And and actually enable that fast growth?
 
Dana Oren 
Yeah, you hit the nail on the head with continuing unprecedented supply chain chaos, right. And it’s not like in, you know, back in 2020 2019, supply chains were these like stable, reliable machines, you know, we were always seeing a lot of a lot of shifts in those and a lot of delays and things like that. But really nothing like we saw happen, more or less from Q2, 2021. And onward. And we’re still seeing now. So, to your question, what we’re seeing some of our sellers do that’s very, very effective is first and foremost, having a plan. And that seems so trivial, but a lot of sellers, and you’d be surprised, even at the you know, early seven figures, sage, they can see maybe in their planning horizon, up to the next order, maybe the next two orders, but really beyond that, you know, they like to play it by ear, they like to sort of wait and see. So to speak for fluctuations in demand for fluctuations in competition, various things that that we see impact, the need to be well stocked.
 
Dana Oren 
However, having that plan, having a greater horizon, let’s say six months, one year of supply chain planning is so so central to actually being able to make big moves and achieve big goals. Because when you’re looking ahead, let’s say one year of supply chain planning, that’s four quarters, right, each one of them has its unique characteristics in terms of demand in terms of events in terms of promotions. And so you have the majority of the data that you need to rely on based on just historical performance, right. So you know, more or less how much you’re going to need to order. And you also know more or less how much you’ve grown to date. Beyond that you can make simple projections, I’m not going to I’m not saying that they’re going to be accurate, okay, they’re definitely going to be questionable. But you can make some predictions as to what you’re going to need in you know, now in Q2 2023. And absolutely, you know, a couple months ago, you could have made those projections for Q4 2022.
 
Dana Oren 
So having that plan, ensuring that you’re first and foremost securing the capital for it, and then leaving yourself some sort of margin to then be flexible and be able to pivot, which is also something that 8 fig allows just shameless plug there. Flexibility is kind of a big part of what we do. That is really the number one distinguisher that we see. That’s good, and it doesn’t. And that’s true for really any stage that you’re in as a seller, whether you’re you just hit six figures really starting to take this seriously. Versus you’re on the verge of eight figures. And this is this is now a machine.
 
Ben Donovan 
Yeah, definitely. And it’s a good kind of segue into the second question or or sort of section when it comes to funding, which is obviously a big topic of discussion and maybe the meatiest of the topics because of your sort of speciality in that subject. When it comes to that flexible financing. What are the options that sellers do have? Whether that’s with a fig, you know, just generally what what are the options, the most common options that a seller that’s growing? And says, you know, man, their cash flow is a challenge, as we know, with physical product businesses, I need some help to help us to keep growing. What are the main options that a seller would have?
 
Dana Oren 
Yeah, absolutely. I think it’s interesting. When talking about our funding solution, how many different ways there are to describe it. And that’s, that’s honestly a challenge for our marketing team more than anything, because how are we going to frame this thing that’s so multilayered, that’s so beneficial in so many ways, in just some quick, punchy, I get this immediately type of messaging. And the way that 8Fig funding works, which is fundamentally different than really any capital solution out there, especially when you’re talking just about e commerce is that we completely separate the two main streams of Capital One is crediting the seller for you know, whatever they need to use the capital for. And the other one is remitting back those funds, right? Those two operate completely independently of each other. And here’s what I mean. So sellers, let’s say they plan their supply chain, and they, we refer to them in our system and As lines, each order is a line. So order batch line, those are I’m always talking about the same thing. And the seller plans Alright, here’s the units that I’m going to purchase. And here is when I’m going to pay everyone along along my supply chain, my manufacturer and my freight forwarder and my three PL and my marketing and then any other expenses some sellers do.
 
Dana Oren 
And then 8 fig runs that through our own risk analysis model, we decide, okay, can we fund this, sometimes we recommend to the seller Hey, by the way, you could probably sell 50% more units than this or 20%, less, whatever it happens to be. But then that’s your funding, you’re secure for however many lines or orders or batches are coming into the future. Typically, we see a plan for about one year. On the other hand, we do what’s called Cash Flow friendly remittances. So those remittances are planned. Not like pretty much every other solution does, which is okay, we gave you money today you’re going to start repaying us tomorrow. Yes, this is very ineffective for most businesses, but especially for E commerce businesses, which see a huge gap in time between having to pay for goods having to pay for cogs in general, and seeing revenue from those cogs, right.
 
Dana Oren 
We’re talking months, okay, three, five months between paying and actually seeing revenue. So eight figure remittances are actually scheduled to align with a predicted sales pace for each batch. Okay, so you’re seeing that delay, of course built in. But also, you’re seeing our prediction for however much the seller sells. Now, like I said, everything is dynamic, everything is flexible. So let’s say moment of truth, you start selling and you’re actually selling, I don’t know, 50%, less like something pretty significant than what he had predicted you had predicted. You can just log in submit a request to slow down the remittances, that takes on average about one business day turnaround, and then your Admittances are changed. There’s typically in like 99% of cases, no impact to the cost of capital, which means it’s just very much geared towards the sellers. The sellers business’s well being and longevity and actual sustained growth.
 
Ben Donovan 
Yeah. Okay. And can sellers just only do one line at a time?
 
Dana Oren 
No, in fact, our sellers do, typically. Well, it depends on whether they’re Amazon, Shopify or other platforms. But on Shopify, we see more line simultaneously, just because their stores tend to have more products. So you’re never just operating one supply chain order, right? You’re always mixing and matching. But yeah, the number, the number tends to be higher on Shopify, and then all of that condenses into one single cash flow friendly remittance plan. And it’s all subject to the same flexibility. So if you need to report a delay, if you need to report a slowdown in sales, if you need to report. You know, let’s take another example taken from real life. Hey, my freight shot up 50%. That’s all just a couple of clicks.
 
Ben Donovan 
Yeah. Okay. And I know, obviously, you would sort of customize a lot of this and might not be too many standardized things. But if you could say, like a, you know, a normal cost of borrowing, would there be a figure that you could put on it? If someone borrows say?
 
Dana Oren 
Yeah, so on 100k they can expect to, to remit back to 8 Fig a cost of capital of 6,000 to $10,000.
 
Ben Donovan 
That’s cheap.
 
Dana Oren 
It is cost effective? Yes.
 
Ben Donovan 
Oh, yeah. You probably don’t want to say cheap. No, no, no, in a bad way.
 
Dana Oren 
 I mean, as cost effective cash flow friendly. I’ve got marketing, you know, looking looking behind my shoulder.
 
Ben Donovan 
No, I get value for the seller is what I’m saying. You know, I think,
 
Dana Oren 
Absolutely. And the value, like I mentioned, I touched on a little bit earlier is is really all encompassing. So it’s not just about getting your capital in order. It’s a huge part of it. Huge, huge part of growth is securing that capital and ensuring that it’s cashflow friendly, so that you’re not like I said, you know, receiving funds in order to grow your business and then turning around and the next day you got to start remitting those funds or repaying those funds. That’s not, that’s not going to help you grow. That’s just going to add another source of stress for these sellers. We’re already doing so much. So with a fig that part is you know, is sort of handled, let’s say. So you’ve got the cash flow friendly remittance plan, you’ve got the peace of mind of knowing that you’re booked about a year in advance, again on average.
 
Dana Oren 
So that acts as sort have a CFO for your company that you can sort of, okay, I got this, this, this, this is taken care of, and I’ve got the flexibility to pivot or refinance anytime I need. And now I can focus on the other facets of my business like the planning, like the analytics, like monitoring the marketing campaigns really effectively selecting new products, engaging in launches, new platforms, just you name it that to do list is never ending.
 
Ben Donovan 
Yeah, no, definitely, definitely no, okay. And then for a seller to be able to use services like yourselves, or whether they need to be at what’s, what’s a good time to be looking at this?
 
Dana Oren 
So we’ve got, in terms of just our top line criteria, we work with six figure sellers and above, but it could also be a run rate of six figures. So if you can demonstrate $8,000 a month in the last three months, we’re happy to work with you and get you to that next level. Just based on on our risk modeling, that’s really a place where sellers are at a very, very good jumping off point in order to streamline some things and get some really meaningful growth.
 
Dana Oren 
In terms of when a seller, you know, more from a state of mind perspective is ready to take on financing. That’s more subjective. But, you know, generally speaking, as soon as you start taking this business more seriously, and you start to consider things like hiring people and getting more more orders and enlisting more and more products, there is probably, I can almost guarantee there is some uncapitalized untapped potential in that demand that that you can seize, usually, with some working capital, definitely. \
 
Ben Donovan 
And then in terms of the amount that someone could borrow, if someone’s listening to this and thinking, Well, I’m doing 10 15 grand a month, I might like to borrow 200 grand to you know, buy a whole lot of inventory, that’s probably not gonna be possible. Again, are there some parameters that you work within for that?
 
Dana Oren 
Yeah, those parameters are more, you know, within the the risk team, but I can say, it’s very, very wide gamut. So we will typically fund more than anyone else for growth, or just we’re risk takers like that. But we’ll also, if I’m just looking at, you know, the the plans that we’ve got being activated on a daily basis, probably the smallest one is going to be around $30,000. And then the largest ones, I’ve seen $19-$20 million. So it’s just really different. Yeah, yeah. But you know what, they’re killing it. Yeah, both of them. Both the 31 – 30,000. And the the 19 million are killing it. So it’s just about how much you want to grow. And then again, remember, it’s all flexible. So we have an unofficial internal thing that we say over at 8 fig. To sellers is how much could you sell if money were no object? And then based on that, make your plan? Because nine times out of 10? We’ll go along for the ride with you.
 
Ben Donovan 
Yeah, that’s awesome.
 
Dana Oren 
We want to see how high is high?
 
Ben Donovan 
Yeah, I love that. It’s there’s an entrepreneurial mentality within that, which is, you know, sometimes rare in financing organizations. So it’s good. There’s in terms of the, you know, the ability to then take that money and do something with it, a lot of people will often think, well, I don’t want to take on debt. I’m worried about that. What do you say to the nervous seller that’s unsure about whether taking on financing is the right option for them?
 
Dana Oren 
Yeah, I definitely understand hesitations around debt in general, not just from a business perspective, but also from a personal perspective. You know, we’re always kind of worried about am I ready for that next step. But really, you have to look at what you’re depriving, potentially of your business by not taking on that debt. And unfortunately, sometimes we also see sellers decide to even sell their business instead of taking on debt in order for it to continue to grow, which is just handing someone else, you know, all that future revenue on a silver platter, right? Which that’s your baby, you know, you know, better than anyone. So, you know, I would say that what 8 Fig has brought to the table is a very effective way to obtain financing not just from a cost effective perspective, but also that flexibility. So you make a plan, which I understand is nerve racking, but you know that you can pivot that plan as you need. You’re always going through with you know, with either a single order or a number of orders and then what over the future may bring if there’s a slowdown, or if there’s an acceleration, which we see, just as often, you’re still going to be able to pivot and, and adjust your funding up or down and adjust your remittances up or down.
 
Ben Donovan 
Yeah, no, that’s really helpful advice. And it’s a great segue. You’re a pro at this into into seller scale. Right? You You mentioned there about the sellers feeling that pressure that they need to sell, I think, obviously, the last 18 months has been a has involved a lot of pressure because there’s this aggregator boom, and everybody feels like they got to sell while it’s hot. And evidently, that has cooled down you know, and so some sellers maybe don’t have as much of an option to sell as they want did have, but you know, from the sounds of it, you’re pretty pro keeping the business scaling up, whereas it feels like the last couple of years yeah, that ecommerce, especially Amazon FBA kind of space, everyone has just been obsessing over this idea of selling your business. We Guilty as charged. We’ve talked about it a lot. But it’s been the talk of the town, that maybe you’re coming out from different angle. Yeah. Talk to me a bit about your thoughts on that?
 
Dana Oren 
Yeah, I think it’s a great question. Because I’ve also noticed that that undeniable gravitation towards Alright, when am I going to sell my business? How much am I going to sell it for? And no one asking, should I sell my business? Right? At a certain point, just people stopped asking that. And I was very curious about it. Because from our viewpoint, right? We’ve got these tremendously successful stores. Right? Yeah. tremendously profitable stores. If you if you drill down to the unit economics, those those margins are phenomenal.
 
Dana Oren 
Yeah, kind of hard to, to run from an operational perspective supply chains are not, you know, the friendliest, most reliable, predictable thing in the world. But just in general, why would you sell? And also, why would you sell for the valuations that we’ve traditionally seen in the aggregator space. So what I did, is, I spoke to a lot of sellers about it, like a lot. And I was trying to really understand what that was about. Because what we were also seeing was a very curious phenomena of sellers, selling and then waiting a couple months, and then, you know, getting right back on on the train, but you can train starting another store. So I learned a lot of really, really interesting things like the need to de risk if I, you know, take out personal risk from it, the need to even from a psychological from a psychological point, prove to your loved ones that, you know, this is this is a legit business and look at it, look what it’s brought us. And I completely understand that. So by no means, am I saying that it’s the wrong decision. It’s, it can be a phenomenal decision. It really depends on the individual seller, but I would challenge anyone who’s considering it to take a look at the reasons why they’re doing it. Is it a working capital problem? There are solutions for that? Is it an operational problem, there are solutions for that?
 
Dana Oren 
You know, so look at what your motivator is for getting your business sold, look at the valuation and then look at your upside and then try to try to make those make those connections and draw those conclusions for yourself. And if you can continue to scale your own business and reap the fruits of your own labor. Nothing’s going to be better.
 
Ben Donovan 
Yeah, for sure. You mentioned about the risk of buying taking risk taking some some money off the table, is it would you say generally advisable not advisable to use a service like yours, say someone’s got a business doing, you know, two, 3 million a year and rather than selling it for say, you know, 2 million or something like that, they think well I could take 500,000 in financing and take X amount of money out of the business and keep that personally and use some of that to finance the growth of the business but also take some of the out to take risk off the table is that is that bad practice is that advisable?
 
Dana Oren 
So that’s a pretty I think unique use case of using funding in order to de risk if I and I do want to clarify also that we have many sellers who’ve chosen to who’ve chosen to sell their stores after usually a sustained phenomenal period of growth with 8 fig for usually personal reasons. Honestly, I want to spend more time with family I want to you know reap these rewards etc. And that’s again perfectly fine. We’re super happy for them. And honestly in probably more than 50% of cases whoever bought out the company continued to use a fake as their source of capital because of the various advantages but when it comes to the risk of buying, it’s such a personal decision that I don’t feel I don’t feel qualified to tell any individual seller whether or not it’s the right decision. I can say, if you need more money for inventory, and that’s keeping you up at night, then Fret not there’s a fake, if you need cost effective capital, that’s also flexible so that you know that you can adjust it up or down. And that’s keeping you up at night, then there’s a trick.
 
Ben Donovan 
Yeah, that’s good. Do most sellers. Just use the services temporarily, say for like Q4 financing, and then, you know, leave it for the rest of the year, do you find that most sellers? Once they start, they kind of get into a routine of using it on an ongoing basis?
 
Dana Oren 
Yeah, actually, it’s probably more towards the latter. We see, we’re very fortunate to have become essentially the funding arm of so many ecommerce sellers across across platforms, because once they start using it, and they see that we can really solve for that really annoying cashflow crunch, we call it of having to pay for goods months in advance of seeing any revenue from it, and helping them constantly just not not feel it at all, because they’re never remitting for things that they’re not selling. It becomes just a very effective tool for them to keep growing and keep executing, ever growing, ever growing lines without ever sort of jeopardizing their own growth and their own cash flow.
 
Ben Donovan 
Yeah, that’s good. So I should have asked this so early on the funding thing, but in terms of timelines, a typical timeline of repaying a certain line of credit, what would you generally look to have it all paid off by?
 
Dana Oren 
Yeah, so they’re not lines of credit, I understand the confusion because we call them lines. But their batch of batches of inventory supply chain, and the remittance part is separate from the crediting part. So really, those schedules operate on a completely unjust two completely different timelines. So you’re looking at, let’s say, an overall plan level, which we said is like a year’s worth of planning, you’re looking at that as the general sort of timeframe for repaying, or let’s say nine months out of that, out of that 12 months, you’re remitting back to 8 Fig. But what’s important to remember there is that you have flexibility, right? You have total control of what’s going on. And you can constantly request from a fact to adjust up or down, especially when it comes to remittances, which are meant to be aligned with your sales pace, predicted sales pace, and then actual sales pace once they actually start selling. So at that point, really, you know, the the timeline again branches out even more separately from the crediting part.
 
Ben Donovan 
Yeah. Okay. Good. Is there anything that you know, I haven’t asked that you feel will be valuable for the audience to know about the topics we’ve talked about?
 
Dana Oren 
I think if I could make one recommendation, we’re sitting here in our cushy chairs on June, middle of June 2022. Q4 is the farthest from anyone’s mind. Everyone’s may be thinking about more things like Prime Day and Father’s Day coming up next week. So I urge sellers listening, think about Q4, those orders. Those lines from your manufacturers need to probably be already in motion. And if not, let’s get them in motion. The supply chain disruptions that we experienced last year are by no means gone, unfortunately, but we can handle them. And then also, I know that there’s been a lot of talk about e commerce demand and not being really sure of where that’s going, especially for this upcoming Q4. I would urge a conservative stance there and to ensure that you are well stocked because you don’t want to be under stocked for what’s coming.
 
Ben Donovan 
Yeah, for sure. sage advice. I like it, it’s good. If people want to find out more about 8 fig and the services you offer and explore the options, where is the best place to find you?
 
Dana Oren 
The best place to find us is of course, 8fig.co That is our website. You can also make an account and start playing around with the tool apply for funding or if you want to just use us for the planning and the analytics. That’s perfectly fine, too. We hope that we can be of added value there. Additional places you could find us our Twitter, Instagram, 8fig.co, we’d love to talk. We’d love to get to know you.
 
Ben Donovan 
Yeah, that’s awesome. We’ll leave all the links obviously in the show notes in the description on YouTube and everything. Dana thanks so much for coming on the show. Really appreciate your time.
 
Dana Oren 
Thank you so much, Ben, Bin.
 
Ben Donovan 
Yeah, I was I was gonna call you, Dana as a joke, but I thought maybe you wouldn’t get it. So Donna, sorry.
 
Dana Oren 
I would have gotten
 
Ben Donovan 
That intro. I do apologize. But thank you for your grace with me. Awesome, guys. Thanks for joining us. Thanks for joining us on the show today. If you do want to check out 8 Fig, I encourage you, like I say we’ve got, you know, community backed endorsements of this great company and so definitely do check them out. And whilst you are surfing the web do leave us a review for the podcast. We really appreciate your support on the show, and we’ll see you in the next episode next week.