Exploring E-Commerce in Manufacturing With Gil Bar Lev

Connect with Gil Bar Lev:

LinkedIn: https://www.linkedin.com/in/gilbar-lev/

Website: www.homeroots.co

Lisa Ryan: Hey, it's Lisa Ryan. Welcome to the Manufacturers' Network Podcast. I'm here today with Gil Bar Lev. Gil is the CEO and founder of HomeRoots. He is a serial entrepreneur. Filled with creativity and a hunger to thrive in the current digital world, Gil founded HomeRoots, combining his passion for furniture e-commerce and technology to disrupt the way selling and buying furniture is done with a novel wholesale platform.

So Gil, welcome to the show.

Gil Bar Lev: Lisa, it's a pleasure being here.

Lisa Ryan: So share a little bit about your background and what led you to do what you're doing.

Gil Bar Lev: Sure. So, in a nutshell, I came from the software engineering world specializing in web development. So I started my career as such, and one thing led to another. One day I was leading a project that connected toys R-Us with Amazon when Toys R-Us wanted to explore the.com or the internet, the e-commerce capabilities but didn't want to go all in. So I led it from the toys R-Us side, exposed me to e-commerce and my passion for technology. I found the proper marriage for what I want to do moving forward with my career.

After I departed from Toys R-Us, I spent my other time in e-commerce, combining it with technology building and helping different brands sell online. And through the following ten years or so, I spent a lot in the direct-to-consumer world, up to the point where I realized we're doing with Brent and also went back to the manufacturing side of things and we want to do whole.

So I realized it's 2015, 2016, and the internet has evolved a lot. We've got a lot of marketplaces. I want to see a wholesale and where do I. I realized I got nowhere to go 

The traditional ones where you go to a trade show you need to exhibit. I was looking at different verticals and categories and noticed that furniture is very complicated. Very complicated because of the logistics side of things, but also, the trade shows themselves are super expensive because you can't just put in a booth in some show, you got to rent a whole showroom, and that's very expensive.

And so, all those issues combined led me to want to tackle the furniture world or the furniture space. And that's what led me eventually to HomeRoots, which is a platform or B2B selling platform that enables manufacturers from all over the world to penetrate and expand their market share in the US.

Lisa Ryan: So what are they doing? Is it like an Amazon, but only for furniture where people can go and get all the specs they want without having to go to a furniture showroom?

Gil Bar Lev: Pretty much it, that's pretty much the basics of it. It works because manufacturers will upload their product specifications down to our platform and alongside their inventory levels and everything else. Then, we push those and promote those products to various retailers. And we ensure that those retailers will offer those products to the end consumer for purchase, whether online or offline, in their stores.  

Lisa Rya: I'm sure the last couple years, or I shouldn't say I'm sure, but it would seem to me that the last couple years were a boom for you, with everybody looking for furniture and doing it online. So tell us about your experience over the last couple of years.

Gil Bar-Lev: Yeah. It's been a rollercoaster over the past. I will say two to three years up and down with different things, different challenges. So at first, it was a challenge. If we're looking back in 2019 or pre-COVID, let's look at COVID. Let's put it this way.

It was more about proving our capabilities to retailers and manufacturers and getting them to buy into the idea. Then, 2020 came along with COVID, and everybody wanted furniture. Everybody, stores got closed. There was only online, and manufacturers had difficulties promoting their products online.

They're very good at manufacturing. They were producing items. How about marketing? That's a different topic, and they needed someone to help them. And that's where we came in. Then 2021 was, everybody wanted furniture. But nobody can get it. There are logistics issues. And then it's becoming, and then from the flip of, from 2020, manufacturers were trying to push inventory because many of their sales channels got blocked. After all, retail store physical brick mortar stores were ordered to shut down.

In 2021, that slipped to the outside on the demand side, where there was insufficient inventory. Whether with their physical stores and now they wanted merchandise, everything got caused in the logistical supply chain backlog that took a long time. So they were hungry for merchandise.

We came in as a good fit because we have a vast assortment of products we can offer retailers. So that expanded our ability in our market share in 2022. That's a different volume. Now you've got a recession. So now you've got retailers that are overstocked.

You've got manufacturers who are still having some logistical issues, and they need some good partners on both sides that can help them navigate this landscape, which is very challenging. And it's not something that you see every. 

Lisa Ryan: That is quite the roller coaster. And it's interesting because it seems, on the one hand, the pandemic came at the right time from an education standpoint because they had no choice but to go online.

Gil Bar Lev: Yeah. And then when everybody was going online, now we have the supply chain to deal with, followed by a recession. So it's yeah, it's a perfect storm. I was not kidding. It's very interesting to see the dynamics between how things are getting pulled between the supply and demand.

And every year, it's just a different strength to either side of pulling an influence in the market one way or the other.

Lisa Ryan: And I'm sure too. We have a lot of manufacturing in the United States as far as furniture, but I know you're also dealing with a lot of international manufacturers of these products. So what are you seeing regarding some of their concerns with the conditions? How are you working and advising them right now?

Gil Bar Lev: Their primary concern is whether they should enter the market in this condition. A condition that maybe has not officially been called a recession but is slowing down the market in demand for potential goods.

And my advice to them is that if there's a good time to get into a market, if it's the best time, it's a time where others are retreating. That's the time that you can gain a market share. So, my advice is not to be afraid to step in, yes, there is some slowdown, but if you're in right now, the customer still requires goods.

They still require furniture and are looking to partner with manufacturers that can supply them with goods. And if you're not. Recession or not. If you're not here, they're not going to remember you. And now they're going to close in the tide. They're going to tighten up their relationship with their existing suppliers.

Now at the time, you want to get rid of the loose ends in business. Relationships are the most crucial in this type of economy. And if you're not here, you'll miss that. So, I advise many manufacturers to step into the market, gain market share, work with us, advertise their products, and promote them.

Lisa Ryan: There is an audience for that. People are looking for merchandise. It's not the market has been saturated. It's not. It's just people shopping differently than what we used to shop. A year ago, two years ago, that was it. And we're so used to buying things online. It's almost, I mean, with furniture, there's always this the point where I want to sit on my couch, sit on it, and see how it feels.

But. It's almost reaching the point that we need to get over that and realize that even though manufacturers believe that's what the consumers want, the consumers want to be able to go on their phone, look at a couch, look at the dimensions of it and say, cool. Send it to me. 

Gil Bar Lev: Yeah, listen, the beauty of what we're doing in the HomeRoots is that from a manufacturer standpoint, supply standpoint, you don't know or care, sorry, you don't care from where the orders will come.

Now, HomeRoots knows how to work with its retailers to collect the orders, whether they're getting submitted through a brick-and-mortar store or online or through other forms of marketing or sales channels that are out there that are not necessarily related to rebuilding.

There might be other ways like designers, stagers, and builders. They still buy furniture, and all those orders get passed on to us faster. This is something that we're focusing on a lot. And this is what we're telling the many factors that listen. Yeah, it might be that e-commerce has slowed down.

Not might be, but it has slowed down. We've seen that. However, customers now see a trend of buying more from brick and mortar than last year. So, on the one hand, compared to 2020, sales have gone up with brick-and-mortar stores, and sales have gone down with e-commerce, but it's still the same.

Lisa Ryan: It's just a different buying experience. Now people are looking just to return to the way it was. Not that I'm giving up on e-commerce, I will not give up on that. But I'm saying this is just the trend we're seeing. So what are some of the issues that you've seen with manufacturers?

Not only in the process itself but converting their way of thinking from strictly brick and mortar to looking at more eCommerce and online offerings. So many of them are looking for when we first reach out to manufacturers. So many are still looking for direct order, direct import business. And what we've been offering them is a way to eliminate the middleman, let them be the importer, let them play domestically, and build directly with the retailers in understanding the consumer better—than relying on someone else, like a middleman.

So the challenges we've seen with those manufacturers have been that they don't know how to do it. They don't know how to export their goods overseas. Maybe they have done it for others, but they have not gone all the way with the actual import process. And then they're not sure where the merchandise will get to the store.

They're not sure how it's going to get marketed. They have a lot of concerns because they have not done it before. But, on the other hand, they are eager to do it. They want to. Just lacking the experience, right? So we're guiding them through this and giving them our fulfillment centers where they can handle the fulfillment.

We're guiding them through the import process. We're taking care of all the marketing. We're taking care of all the back-office operations for them. And by that, we're eliminating many of the risks and their concerns of entering into the. But that's what the major challenge is, moving between changing a little bit, the mindset between someone else on direct import and the direct importer to drive my business, to drive myself forward to a mode I want to play. I want to play directly in the market. So I don't want to rely on someone else that doesn't want to rely on the middleman.

I'm taking a specific risk. Yes, but the reward is much bigger, right? Cause of its impact financially. The margins are higher; you get more control over the sales channel. You are just more in control of your own business. If you do it well with our advice and best market information, we can give you the sky is the limit.

Lisa Ryan: But just the initial open-minded. Some require that of the leaders in those manufacturing companies. And we've been talking a lot about furniture, but it also seems. A shift in mindset to more eCommerce can help manufacturers in many different products. So talk about that in terms of, maybe other products, various industries as somebody who's not in furniture may be able to relate. So start to think about doing that, what you're doing with.

Gil Bar Lev: The beauty of eCommerce is the ability to collect data faster than other forms. At least in my opinion. So when you're putting out there, when you're putting products out there online, and it doesn't have to, as you said, it doesn't have to be just furniture.

It can be any category when you're putting products out there and trying to promote them. You're starting to get feedback from the audience. Whether they're visiting the page, whether they like who you're offering, and then whether they convert, if they convert, you know, a lot about your price points and your content and the way you package the product to the consumer.

But if they're visiting it, then they're not buying it. Then you may have a problem with the pricing, or just the offering is just not attractive. And you learn a lot from it. So before even you go on a massive distributor manufacturing. You could test a few things online and see and gather feedback from the consumer.

What are they going to, what you're going to have to do, what you're offering, whether the price point is the right price point, and also a little bit about the quality, the first couple of iterations, you get a lot of feedback, right? But, whether you have returns or a lot of customer inquiries, I'm not sure how to operate this product or this, and then you get improved.

You get iterations. You go through iterations. You're improving the product. The quality of it until you go to a point until you get to the point where you have excellent quality, high-quality product that you feel confident that the consumer wants. And then you're ready to go all in, manufacturing it and promoting it.

In the destination market that you're looking for. But that stuff you can relatively do fast with e-commerce with brick-and-mortar stores or other forms. But, on the other hand, it takes significantly longer, and you're limited with the selections of offerings that you can go to if you want to put 50 products out there online or 500.

I'm not saying there's no effort, but the step is not huge. It's doable. But you cannot put a product in the store that easily. That's very challenging, and it doesn't mean just furniture. Forget about it. There's no way because there's a space, but now you got to go to other stores, 500 different skews in a store.

Lisa Ryan: It is a challenge. It's fascinating from a knowledge standpoint because somebody walks into a furniture store and walks right out. You don't know why they walked out. You don't know if it was the pricing, the furniture quality, and everything. And again, we're so used to leaving our Amazon and our restaurant reviews on Yelp and all this stuff for people to leave reviews for brick and mortar.

It is a lot more challenging. Getting that feedback as far as pricing quality reviews from others, all of these different things that speed up that whole marketing and decision process, as far as what you're going to be manufacturing, unless I raise a good point. So because what it is when if you go to for example Google business.

You're not rating the furniture or that piece of item that you just explored or were interested in. But you're not, which might be an interesting new business. Can arrive from our conversations here on how to drive reviews for brick-and-mortar stores for their product.

But online, you're not just reviewing the seller. You also review the process. That's something that's missing in the physical world. And that's what makes it more challenging to test, do your AB testing, and figure out what actually might sell better. So again, there are different techniques to go about samples, but it's a much longer process.

And in our economy, especially in the past three years, I remember that you've got to move as fast as you can. Because anyway, the market will slow you down. So you can't, you, you can't waste your time on those things.

Lisa Ryan: Yeah. And it's funny, too, because when you think about your, you just said you are reviewing the business. I can leave a horrible review for somebody because the sales rep or the manager treated me poorly, which takes away from anything I may have. I may have loved the furniture but hated the store. So again, Just different ways of looking at it, even to try it out and say, you know what?

Gil Bar Lev: maybe we'll start testing this product and do some AB testing online or do something. 

Lisa Ryan: So if a manufacturer is thinking about bringing a portion of their business to e-commerce, what's a good way to get started?

Gil Bar Lev: First, I advocate for HomeRoots that we're an excellent way to get started. Cause we have put many different eyeballs on a product because of our distribution in the market. So a good way is to work with us and upload the products. And if there are in the furniture for home decor, they will go on to our platform and start their journey there.

But if they're not, I recommend going with a particular business-to-business marketplace per se, or any marketplace and even a direct consumer marketplace. And test it. That's trying to put something out there to see whether you can gain page views and get feedback.

See, there is a lot of involvement, whether there's some traction or interest. There's time. There's I also want to say that this is I'm mentioning all those points. Still, those points require investment on time, of someone knowledgeable about the product and dedicated to ensuring that selling online will be successful or will do everything they want.

To make sure that it's successful. Otherwise, it will not work. And that goes to another point. So I'm sorry that I'm jumping between different things here. You need to. If I weren't a manufacturer and going back to your question to start selling online, I would pick marketplaces.

If they're in the furniture business, that's our specialty. So I will pick a specific marketplace but hire someone. That knows how to do it, and they have done it well in the past, but you can try to do it on your own, and that's. And sometimes, you do need to do things on your own, but if you decide to do it on your own, have a mentor or someone to guide you through it.

So you're not wasting time on weeks or months and a lot of money on things that don't make. Just avoid all this. You can speed up the learning curve. So my advice is to find someone who can mentor you or mentor someone you delegate that task to, and then try to play with that.

And one last thing is to be passionate to have patience. Clicks don't come in immediately. It takes time. You need to test different things. You need to try different keywords. You need to test different. Then, later on, once you do get clicks, you need to test different image areas.

You got to know what's more attractive to the consumer. Every consumer likes things differently. So you got to figure it out. It's just a lot of baby testing. And you just got to be patient. Yeah. Yeah. I know. We want things to go viral, and most things, no, they don't. It's just most things don't. It's just getting lucky that something does get viral, but in most cases, it's not.

So don't plan for it. Don't plan that you're going to upload some type of product and then the whole world. I...