On this episode of Honest Ecommerce, we have Dario Markovic. Dario is the CEO of Eric Javits. He saved Eric Javits from over 1M in Debt and from having no D2C presence to generating 80% of Sales through Ecom. Also the Brand scaled over 400% in the last 4 years We talk about implementing rapid ad strategies for fast wins, doubling down on PR and affiliate marketing, managing cash flow impacts during scaling, and so much more!
As the CEO of Eric Javits, Dario Markovic has successfully generated over $50 million in revenue over the past four years, exclusively through eCommerce.
A visionary entrepreneur, Dario Markovic is also the founder of multiple companies, including a SaaS platform designed to help businesses grow organically.
Dario Markovic's innovative leadership and strategic foresight have consistently driven growth and success across diverse ventures.
In This Conversation We Discuss:
Resources:
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Dario Markovic
Believe it or not, you start to be an expert in all those fields if you want to grow your brand. That's what happened to me. I was an expert in everything.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer.
And today, I'm welcoming to the show the CEO of Erik Javits, Dario Markovic. Welcome to the show.
Dario Markovic
Thank you, Chase. Thank you for having me.
Chase Clymer
I'm very excited to chat. So for folks that aren't familiar with the brand, can you quickly tell us what are the types of products that you guys are bringing to market over there? What are you selling?
Dario Markovic
Sure. We're a premium hat brand. We're known as a premium hat brand. But we're selling women's bags, women's shoes as well. But we're known primarily for women's hats. From straw hats to winter hats to felt wool hats, all the way to... Well, bags, straw bags. Summer shoes and leather bags.
Chase Clymer
Awesome. The accessory collection there, obviously, a little more on the luxury side of things as well. I was perusing the website a little bit earlier.
Now take me back in time. You're not necessarily the founder, but I'd say that you're definitely the impetus for the rebirth of the company. So where do we want to start this conversation?
Dario Markovic
Yes, that's right. Well, the brand has existed now for 39 years. Actually, it was founded before I was born, a few months before I was born. But I came on board in 2020. The brand was pretty much a retail place. They're going just to retailers and selling their goods to the retailers, so wholesaling it.
There was no online presence, except there's an Amazon store and they're selling through Amazon.
But when I came on board and that's around where COVID hit. As you probably know, the retail world shut down, the physical retail world. And that's where the brand was forced. They had no other option: go online, save themselves from going bankrupt, or just adopt the Ecommerce route. And that's where I came on. In a few months time, I turned everything around.
Chase Clymer
That's amazing.
Let's talk a little bit about your life before coming on as the CEO. What were the skills that you were building at other companies that allowed you to take on this turnaround?
Dario Markovic
Sure. It's very unusual. I grew up in Europe and in Switzerland. I was working there in finance. Very tickable for Switzerland. Swiss folks. And I kind of met my wife in South Africa, and then I moved to Chile, South America.
And then we started a lot of different businesses, one of them being a kind of educational academy, to call where we teach fashion, mostly about fashion, where we hired the best folks from the country to be the teachers, to teach the students how to create a fashion brand, how to build an Ecommerce branding and so on.
And we also had our own brands, Ecommerce brands in the jewelry space, in the fashion space. We still have some of them. And also an NPR/marketing agency. That's where we work locally with brands such as Tiffany & Co., Louis Vuitton, and obviously give a lot of skills which prepared me very well for this endeavor.
Chase Clymer
How did this opportunity come to be?
Dario Markovic
Well, we're actually doing PR work for one of the founders’ personal brands down in Chile. We're doing a big event for about 2,000 people and meant to be 400-500 but we ended up doing it for 2,000. And we did a lot of PR work, just posting them on different TV shows and magazines.
And then he learned more about what else we're doing. And then he liked that work. That was back in 2017, actually. And then he... 2020, COVID started.
And he said, he called us up and it's like, ‘We're in deep trouble. Do you mind looking into this and helping us?’ And that's where I kind of said, ‘Hey, you have to do this as soon as possible. Otherwise, you're very much going bankrupt.’ And that's how it really came to it.
And we had about a month's time, a month and a half to really turn it around because the company was very heavy under that and had about 40 employees. Yeah. It was a very tough time.
Chase Clymer
Well, let's talk about that tough time now. Let's talk about what we're... So you get involved. Obviously, there's some paperwork and you guys have to figure out what that looks like. And that's not what this episode is about.
I want to know about what you are involved in. You are now handed the reins. What's your punch list? What are the action items that you're taking on to try to right the ship?
Dario Markovic
Well, then the obvious thing, the brand was using Magento. And I'm a big Shopify user and I have been using Shopify since 2014.
So I was like, ‘First thing: just change to Shopify,’ which is for us, perhaps the most straightforward and obvious Ecommerce platform. And from then on, it was really the first big quick win, which is, in my opinion, running Meta or Facebook ads, Google ads. Those are very fast, big wins or quick, easy wins to do when you have an Ecommerce brand.
And that's the first thing that we actually did. And that alone showed potential and did the minimum, what did the necessary thing to turn the company around.
And then slowly, we obviously... There was no email list. Can you imagine? There was no email software. So we went with Klaviyo. And we slowly added, it was a very slow transition because I was obviously involved in the whole set as well, which is still active, not as strong, but still active.
And then you had a huge payroll. Imagine we're in New York, salaries are high. And it eats up whatever cash there is. And there wasn't. There was death. So I was like, “At the same time, let's run this up. Let's generate a million a month at least.’
Before that, they did zero. So it was tough. That's why we just slowly added Klaviyo obviously. It's a fast play. But then you want to add reviews.
You want to add everything that says, ‘This is going to be our channel. This is going to be the way the company grows and gets back on track.’ And that's how I started actually.
Chase Clymer
So you mentioned that previously they were on Magento. And from listening to you, what I hear is the website mostly just existed. There were no marketing activities around it and sales were very close to zero.
Dario Markovic
Yes. The sales of Magento on a yearly basis were about 100,000. That mostly really came from sample sales. So what they did, they didn't do any traffic. They didn't have any traffic. So what most of it is kind of, ‘Hey, we have samples that we had for the last few years, so we'll just push them through our site.’
And they were actually calling up customers that they had some lists on. Those customers were buying through Magento. They were just sending links to customers that called in and would have liked to pretty much buy a product. So that's how they did it. Because there was no online platform. There was no physical store. The physical stores were in Nordstroms and where the product was sold at.
And I wasn't really as well... I never used Magento. So just use Shopify. And so for me, it was like, ‘Okay, we have to switch to Shopify,’ which we did in a few weeks.
Chase Clymer
So you guys get up and running on Shopify and you start launching paid media. I think that a lot of our listeners are still in that flywheel trying to find the right messaging and product market fit to make their ads really work for them. And you're launching this in the height of the pandemic.
In the corner though, what you have is you know these products sell because of the retail exposure, the brand longevity. You know it will resonate. You just need to figure out how to do it online. Do you remember anything about the testing and iteration of launching those ads during the pandemic?
Dario Markovic
Oh, yes, definitely.
First of all, obviously, I wasn't a hat specialist. I didn't really... I had no idea about hats. It was like… I took history. I took the inside of what the brand was doing through the dropship channels from Notch, Lumbia, Neiman. And even though they had the customers very well, you can understand and see what type of customer that is because you can go into the dropship format and see what type of customer that is.
So the second surprise was the brand did not have any budget to run ads. And again, the brand was kind of in debt and obviously, it was a little bit budget.
So I know the founder came there, Chase came to me and said, ‘You know, let's test it for $400.’ And I was like, ‘$400 is not a lot of money. We won't be doing much with $400.’ And surprisingly, we did actually $58,000 with $400. That sounds amazing. It sounds incredible.
And keep in mind, there was still no email list. Which today is the core of, I guess, a lot of brands.
And we're doing pretty much the easy play. There was no traffic. What should we do? We did... We just... We called, we took the phone numbers of all these customers that we had. We collected about 3,000 emails from customers that once called in. And we started to use that list as a seed list to create lookalike audiences.
That's just also before the whole privacy switch came with Apple. So we used that lookalike list. We put that into Facebook, which we targeted those customers.
And we went after blogs because we realized that the Asian community is kind of a fan of those types of styles of hats that we had.
So we went to forums and we took them as well as interested audiences on Facebook, which were mostly Korean communities in the US. And then it exploded. And then we started with $400, we were able to do $58,000. It was about in two-weeks time.
And then we went full in May 2020.
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Chase Clymer
You mentioned obviously previously, you had experience with PR and getting features that way. And then you just now said that you also were looking at getting exposure through blogs and whatnot.
So you guys doubled down on that skill set that you already had in-house to really tackle some of the unique challenges of trying to break this brand digitally?
Dario Markovic
Oh, yes. It's also a bit weird because that's not the first job that I had on taking and selling goods. Because to be honest, it's a more brand awareness play going on a PR route. It's not that instant response marketing type of channel. But it's important as well. We're doing it.
Obviously, we're very, very strong in the PR affiliate world right now. Again, I mentioned in the beginning, we took things very slowly. And we started at the beginning of 2023.
So the first year and a half, we're really concentrating on paid SEO and then adding channels to it. So we started with affiliate PR in the end of 2022 and beginning of 2023. And that's a part of the channel as well.
It's actually a very fast growing sales channel for us right now. The affiliate world and doing a lot of publications obviously and getting blogs to write about us, getting backlinks, do follow, no follow. And a lot of people are going after the following links.
But we're doing everything and it shows results slowly. It's not like Facebook and Google ads, obviously. But that's how you build your brand. Or you have to go through these channels once you see your diminishing returns on ads, or you need that new seed audience. You have to opt-in for those channels.
Chase Clymer
Absolutely.
Now, you guys obviously experienced some pretty rapid growth. While you were trying to take things slow, the sales weren't letting you.
How are you guys adapting to this rapidly scaling and growing and changing environment?
Dario Markovic
It was very difficult because in the beginning, you realize that we produce our hats in Asia. The raw material comes from Asia, and some of the raw materials come from South America, some from Europe. So sourcing and production take time.
And in the first year and a half, we just oversold or just sold out quickly. And we missed a lot of steps in that case because we just didn't know how fast we'll sell. Obviously, I didn't have any insight on the Ecommerce channel. This is a new channel. You took whatever you hold.
We sold wholesale as a reference, but obviously, it's very different to deal with wholesalers. So then we realized that the core manufacturer of our raw material, which is a patented material, we have only one manufacturer doing that, that they have their capacity.
They're like, ‘Hey, this is the space we have. We added additional machines to create that raw material. And now we can't do it anymore.’
So what do you do? How do you sell more units when your core materials are so you have to opt in for different materials? And that takes time. What materials should we use? We're a premium brand. We can’t just add any material.
So that added to the complexity and that it just adds to everything to sell it fast, turn it around to then all the logistical issues that we had during COVID where containers cost $20,000 and it used to be $3,000 or $4,000. So it was a very tough time.
Nevertheless, we grew and we're still growing. But it's to have an idea. I'm not scaring anyone, but just to have an idea of how many problems could come up. Unfortunately, there's still popping up problems. But it's a way of just running a business.
Chase Clymer
Absolutely.
And I think that what you just shared about hitting capacity with your manufacturing is something that a lot of businesses need to understand and realize, especially younger businesses as they go out and find these growth partners and people to help them run direct response ads, the Facebooks, the Metas, those people that are really going to help impact the traffic and hopefully the sales of your business.
You need to be able to answer: What happens if your sales double overnight or triple or quadruple? Can you actually facilitate that velocity? And oftentimes, they've never thought about it.
Dario Markovic
It's a good problem to have. Yeah, it is a problem. And most don't think about it because they obviously want to have this problem. But you just sometimes don't think this is happening so fast.
And if you happen to manufacture outside of the US, I think even that would happen if you manufacture inside the US, you depend on so many parties, from the raw material producer to the end manufacturer, and then to the logistics company.
And so you have so many parties that you depend on. And it takes time. Our lead time was about 3 to 6 months to get a product once we reorder the product. And our season is spring-summer. So if you sell something out, even in March, which is the beginning of the season or February, you are not getting it until the end of the season. So the season is over.
So if you have a seasonal product, obviously, we're doing fall products as well. But there you go. The season is over. And if you get the product, you have to wait another year or pretty much 6 to 8 months to sell it again.
And that's sitting there, taking up storage, it's costing you money. And you paid for it. And so the cash flow is impacting the production. Of basically your business.
And then you have to continue to analyze each house. How deep should I go with these products that sold well? Should I add new products? It's very cash-heavy, any fashion business. And again, I sound like putting the negatives out there. But it's just how we experience it. And it's still a great business. We have a great margin business, I have to say.
And we're able to naturally grow without outside capital, which is great.
Now we're coming to a point where we were thinking about, ‘Hey, if we want to continue growing, we need outside capital.’ Otherwise, you can't just add 20 million worth of inventory and cost to make 60, to have 67 million and sell 30, 40 million. So it's just a difficult place.
But once you have that stock lane, it's obviously a great business to have. And it's a very scalable business.
Chase Clymer
Absolutely.
Let's talk about the future. So what does that roadmap look like if you're going to try to continue this growth for the next 2 or 3 years? Obviously, one of the big ones is the contemplation of bringing in outside capital to help you hit those growth margins faster. Anything else on the mind?
Dario Markovic
Yes, we did last year expand into Korea, National Play, I kind of mentioned it. We were doing it with a local partner. So what they're doing is they established physical stores in South Korea and Seoul, which is the capital. So we have about five to seven physical stores that are located in one of the most famous malls of Seoul.
That's one of the plays that we're looking at expanding. Where you're about to cross this 20 million mark, you have to think about those things. Expand or grow into perhaps in certain categories that are affiliated or close to what you're selling.
I'm not saying it’s costs, but we took all the volume there is, or margin, the share of the hot business and the bad business, not at all. But you naturally think about those things. So Korea is one.
Europe is the second one where we have 3PL now kind of shipping to European customers. Now everyone says, ‘Hey Dario, Markets came on board with Shopify,’ which is great. I was waiting for that for a long time.
I was talking to Shopify when they started with Markets. But we did that move just before. We didn't want to wait.
It's a little bit still different because the customer in Europe is very similar to the US customer. Likes to receive the products within a few days. Likes to have the idea that it's shipped locally or in Europe...
Chase Clymer
At least on that side of the pond.
Dario Markovic
Yeah. So it costs more but it's part of you that has to expand and we're having talks in the Middle East as well, which is a growing region. A lot of sun. Throughout the years, you have a huge community living there that spends a lot of time at the beach. So those are some ideas of what we're doing to expand.
There's a lot more but there's a few things that...But as you grow, it gets a bit more difficult to obviously have the same results through Meta, through Google. You have to go into more different channels.
And then you start to... You have to do more activities that in the past, you just say, ‘I just put a dollar in and I get five back.’ It's not anymore the case. You might invest more in SEO where your results come back in about 6 months time. So it's a bit more difficult. But this is, I guess, where every brand that grows has to face these steps and challenges.
Chase Clymer
Absolutely, Dario.
Now, is there anything I didn't ask you about today that you think would resonate with our audience?
Dario Markovic
There's nothing that comes to my mind. However, I guess it's a journey for me at least. If you ask me, ‘How do you live that?’ I think that the results or the satisfaction comes from the journey. I would never imagine. It's not that initial success that I thrive on.
Obviously, it gives you momentum and you have more motivation. You have those additional ideas. The same idea that I have today didn't come in 2020 to do certain things.
I think the most important part for everyone listening is to start somewhere. And even if you think you don't have skills in other spaces such as affiliate marketing or SEO or PR, you will get them. If you're a founder, if you're running the business, and if you're passionate about it, believe it or not, you will start to be an expert in all those fields if you want to grow your brand.
That's what happened to me. I was an expert in everything. And I am hands-on. I have to say, I'm a senior that is hands-on. So I'm doing a lot of things myself or obviously working with a business. I'm possibly doing everything myself.
But you feel you have to know what you're talking about or what you're involved in. So you naturally go into it, dig into it and learn about it. Even if you're running into it later or not.
And whatever you're strong at, SEO or Google Ads, start with that and the business itself will carry you to different spaces. So how to set up a logistical... How to outsource the 3PL. How to work with the 3PL. All these things. You will add them slowly.
Chase Clymer
Awesome. Dario, I can't thank you enough for coming on the podcast today and sharing all those insights.
If I was listening to this and I wanted to check out some of these luxury hats, where should I go? What should I do?
Dario Markovic
You can visit us at ericjavits.com. We're on social media. We're on Instagram. We're on TikTok. We're on LinkedIn. Just visit us. Instagram is the best place to have an idea about what the brand stands for. So yeah.
Chase Clymer
Awesome. Thank you so much.
Dario Markovic
Thank you, Chase. Thank you for having me.
Chase Clymer
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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