E083: Curtis Matsko: Operators X Portland Leather Goods
Nov 20, 2024
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Explore the journey of transitioning manufacturing to Mexico and the growth of a leather goods brand. Discover strategies for effective marketing and product development that resonate with consumers. Uncover the secrets of maintaining a strong supply chain and the importance of quality craftsmanship. Delve into the vegan leather debate and the rise of a thriving secondary market. The discussion also highlights innovative tactics in retail to navigate challenges and ensure business growth.
The strategic move of manufacturing from Portland to Leon, Mexico, has significantly boosted production quality and efficiency through local artisan collaboration.
An effective marketing strategy drives Portland Leather's product development, focusing on consumer insights to create hero products that attract new customers.
The company's future plans involve expanding retail operations to enhance profitability while maintaining a strong community connection and operational adaptability.
Deep dives
ERP Implementation Challenges
Integrating an Enterprise Resource Planning (ERP) system can be incredibly complex and time-consuming, often leading to frustration for entrepreneurs. The conversation highlights the significant challenges faced when implementing solutions like NetSuite, as additional contractors are often required to facilitate integrations, complicating the process further. Entrepreneurs frequently weigh their operational choices against the difficulties these systems present, sometimes stalling sales due to accounting issues or integration delays. The discussion reveals a collective sentiment that ERP systems are not user-friendly and are often met with dissatisfaction, likening them to having a dental appointment—necessary but unenjoyable.
Manufacturing Shift to Mexico
The move from domestic manufacturing in Portland to a new facility in Leon, Mexico, has proven transformative for the company. Initially forced by business disruptions during COVID-19, this transition has led to increased production capabilities and a deeper connection with local artisans and resources. Leon is recognized as a premier location for leather manufacturing, boasting a rich culture and community of skilled artisans, which has significantly benefited the quality and efficiency of production. The owner emphasizes the importance of this change, noting that close proximity to manufacturers enables faster response times and adaptability in meeting market demands.
Marketing as a Core Function
The podcast underscores the importance of marketing within the company's operations, positioning it as the driving force behind product development and sales. The marketing team is tasked with determining the ideal products to match customer demand, ensuring that the company maintains a balanced ratio of new versus returning customers. The entrepreneur emphasizes that product development must be market-driven, focusing on the potential hero products that can attract new customers rather than relying solely on existing ones. By prioritizing this approach, the company minimizes waste and optimizes its advertising strategies based on real consumer insights.
Building a Strong Community Connection
A stark contrast is drawn between the community engagement in Mexico and Portland, highlighting the vibrant and connection-oriented nature of life in Leon. The owner reflects on a more social and celebratory environment that fosters relationships among community members, which is notably different from the more insular vibe in Portland. This connection not only enhances personal experiences but also strengthens business ties, creating a cooperative atmosphere that benefits manufacturing efforts. Engaging with the local culture has not only improved operational dynamics but has also enriched the overall company ethos.
Vision for Future Growth
Looking ahead, the company plans to expand significantly by opening new retail stores, which have previously exceeded expectations in terms of profitability. The entrepreneur has shifted focus from solely online sales to a hybrid model that includes in-person retail experiences, which contribute to improved margins and customer interaction. With aspirations to triple EBITDA in the coming year, the emphasis is on strategic scaling, ensuring that the operational model is well equipped to handle growth. The optimistically driven perspective reflects a commitment to both quality and community engagement as essential elements of their ongoing strategy.