GoAvance: Opening Doors to Latin American E-Commerce | Insights by Ramiro Velasco Mesina

My personal friends that are like, Hey man, I'm selling an Amazon. I'm going to sell in the U S no sell in Mexico, make some cash, use that cash to actually get some ranking in the U S because Amazon is a pay to win game. Now you have to pay to play. And if you can build that cashflow, then it'll be easier. Welcome to super entrepreneurs podcast. I'm your host Shahid Durrani. Today we have with us Ramiro, Alejandro Velasco. Ramiro is an engineer, entrepreneur, e-commerce veteran, and most recently a co-founder of go events, a company focused on bringing the world's brands to Latin American clients. Welcome to our show. Ramiro. Thank you so much for having me. I do a good job with your name. Yes. I don't know why I have my, my, my middle name in there, but yeah, Ramiro Velasco is not the whole world. Those right over here. Thank you for having me seriously. No, it's my pleasure, my friend, my pleasure. So I love entrepreneurs launching and starting new companies, innovations. So I'm grateful to have you on the show. But first question is I could have done this in my research, but doesn't Latin America have Amazon? Yeah, they do. Yeah. No, they have Amazon delivery here in Mexico. We absolutely do in Brazil. It's actually active and countries are slowly coming up, but in Mexico and Latin America, we're actually more used to MercadoLibre, which is the other e-commerce platform. Okay. Local. Yeah. Local. Yeah. It started by two Argentinian guys and they just took over. Cool. But then aren't these products already available in Mexico, for example? This is the big issue. Okay. So I used to work at an agency. I used to work at an agency, at an Amazon agency. Worked there for, God, I don't know, six, seven years and got really good at selling on Amazon. And then when the time came, we said, let's start our own business. Let's push it south of the border. This is where we're at. I live in Mexico. Let's just help people sell more on Amazon. That's what I'm good at. I'm really good at e-commerce. Okay, cool. And then it turns out as soon as we go in, we say, hey, the competition is non-existent. Hey, like the market is barren. The practices are several years old. And we realized as we dug more into the market, man, like there's, foreign sellers can't really sell in Mexico easily. So say. Is it not legal? It's the way to get legally set up is really difficult. So you need a local business entity, you need, yeah, you need a tax ID, you need a local legal representative. You need, you know, obviously someone filing taxes and all these things. So we said, wait, the Mexican consumer is used to either paying outrageous prices and getting, and by the way, sorry about the stuff he knows I'm coming down on the call. The Mexican consumer is used to paying outrageous prices for, for products to get it across the border, or they just don't get it and we have the local alternatives. So we said, Hey, we can do all of that legwork and, or rather we already did all of that like, we already have a business entity, a tax ID. We already have the e-commerce knowledge. We already have the distribution centers, the partnerships and all these things. We were like, why don't we help sell other people's stuff? And it just, distribution is the oldest business model on the planet, right? You buy something in China, you walk down the silk road, you eventually cross Constantinople, you walk into Europe and you sell it to Europe. Like it's been around for years, but we're just, this is just our take on it where it's always actually, there's some huge barriers to entry into the country, especially when we're talking restricted category supplements, pets, all these things. Why don't we act as that sort of bridge? Like, why don't we, while we're doing it, we're building a bridge for sellers to sell it. Interesting. So basically go events is a platform where any manufacturer outside of Mexico, for example, can sign up and set up their product without having to go through setting up a company and doing all the tax and legal, they can just go through your company by basically you taking on that product for that market. Exactly. We're very thorough in making sure that. Yeah, it's fun. It's really fun, honestly. Cause I get to put all the skills that I have from selling on Amazon. You come to Mexico with the knowledge of us, Amazon, and you're just crushing categories. Like it's so easy. Um, yeah, so we have clients, for example, supplements, cloud companies that, you know, supplements in the U S are super difficult. Guess what? Mexico in Mexico, it's not super, super difficult because there's CPC is 80% lower, so guess what? We have a client that we matched their us sales in Mexico in about four months. So we basically doubled the sales because he was the first mover, like into the space, which was beautiful. I have a, I have a few people I want to introduce you to. I just interviewed this lady. She founded a aromatherapy company. She's doing very well in the States. So she might want to branch out. Yeah, absolutely. We're actively always looking for a potential client. What I will say is we have to be a little bit selective, not because of us, but because we need to make sure that it makes sense for you. So if you sell a product that's like above market value for Mexico, like too far above market value, and we can't, we don't think we're going to make it work. I don't want you sending me angry emails. Okay, man. Like you're probably not going to do very well in the country and we'd rather have that honesty then. Yeah, for sure. So there's a price bracket, right? The items that you can sell in Mexico. We do. Yeah, we do the market research. So we'll look in and say, Hey, we can generally afford to be about 25% more expensive than the market. That's what we found where we're still performing well. Anything above that, it does start getting a little bit iffy where we start going, can we really move the product? And if we don't think we can, then we're not going to tell you we can and then fail. We'd rather be honest and be like, Hey man, I don't think we're the right people for you. Working with a private label for Amazon, you've been doing it for quite a while. You must've picked up information about how people shop. What exactly did you take from that knowledge and implement in this startup for Mexico? So I would say that's a great question. That is a fantastic place. I think I ultimately, the most important thing is how to read the data. I think, so I have an engineering background. I studied mechanical engineering for no reason. For no, I'm not an engineer. Worst decision of my life. But between that and the experience, what you get is really good at digesting Excel tables and looking and going, all right, like what's going to work, what's not going to work, you can run your front, like front end market analysis, whether it be like your helium tanks, yours on gurus, your, what are your jungle scouts or whatever, and you're like, you're pulling the data, but ultimately you end up with a, with an ability to just feel the market out and you go, Oh, I feel like this probably will work. Okay. Let me then look at the number and then let me see it first. You get this feeling of, yeah, I think this is a really good fit. All right. Let me go in, which I think that's really valuable. And just the ability to make those decisions. Hey, we put this out, but I don't know. Conversion rate is low. Okay. Why is conversion rate low? Like by being like really good at Amazon, you get, you don't say, Oh, maybe it's price, but that's it. No, it's like, all right. What's the first image communicating? All right. What is the bullet point to me at the beginning? Actually, maybe we can move the title. Maybe you could, how we take that sort of care to almost look at it more like traditional marketing than Amazon marketing. And that's also just absolutely massive that I picked up from years and years on Amazon. Okay. Good. Merging markets like Mexico, especially for online shopping, I assume is more on the newer side. Correct? Yeah. Oh my God. So I love this topic. Yeah. Mexico is 123 million people. Pretty sizeable country. That's about a third the size of the U S what is happening right now is what happened in the U S maybe eight years ago, right? Where you would have your average timing. Yeah, exactly. You would have your average shopper slowly moving and transitioning into shopping on Amazon. What we're seeing is when shoppers are new to Amazon, you'll have less brand loyalty because you're going in and you're looking for what is available on platform. We are a country that primarily shops through phone because our primary internet access is through phones. So you take that into account, like your texts on the images, like you got to get to the market. We know, for example, for a fact in Mexico, that. That Mexican consumers on Amazon prefer English listings, images, not on Mercado. Because I'm going to tell a new date is a much more local shopping space. And Amazon, what you have is a different demographic, generally shopping for higher end products that we like are in English. So there's so many just little nuances that are so exciting about consistently finding new like data points. Then in these emerging markets, what we're seeing is 30. I think it was like 30% the year over year for two years in a row. And then it was like a hundred percent, a hundred and something percent, I believe was a number for Amazon for 2023 for 20. Yeah, I look, I'm butchering the numbers, but the growth is insane. Absolutely insane on platform because it's not that, okay, suddenly everyone's rich. It's suddenly more and more people are willing to shop online and trust that it gets to their house. And that's just lovely. So FedEx right now in Mexico is so far behind that if I try to buy something on Amazon right now, it's an eight day delivery time with prime. Normally it's next day, but FedEx cannot keep up with the volume that we're seeing. It's so exciting. Yeah. All of our consumers are upset with us and they're like, excuse me, why is this late? And it's FedEx says it's late and we're just, Oh, there's an opportunity to create a courier company. Go on VADS courier. You know what? If I could, I would. That sounds fantastic. Oh my God. Yeah. Do a drone shipping. It's still with just a small investment of a billion dollars. We can. Yeah, there you go. You're almost there. We're almost there. You know what, what's a billion, what's a, what's a billion between friends. Exactly. So what advice can you give anyone that might be eyeing these emerging markets? What should they be preparing for or what should they be analyzing in their current business to see if they could actually potentially reach out to you guys or do some other source of taking steps towards going into that market? Totally. So if, um, there's a couple of things here. If you are already selling on the remote fulfillment program, rather than NARF, go in and check your fees. Either your price is too high or your fees are too high, man, because it's not really a scalable solution for the country, which is why we wanted to, we, we wanted this fully aware that a lot of people were just going to say, but I'm already on NARF and if you're content with NARF, like that's perfectly fine. NARF isn't giving you a good result. There's two companies. I know that it's given good results to out of a thousand, but first of all, go in and check if you're already on Amazon Mexico, you're already moving stuff. Next step I would say is look at your margins and make sure it makes sense. Consider that in Mexico, you include VAT in the pricing in Mexico. 90% of consumers don't have prime. So it doesn't make more, much sense to, to include shipping and pricing. And then we can go into that at some point, depending on the demographic, it's going to be your product and all these things, but look at your margins and see, are they too tight because they're too tight, Mexico is probably not going to work because ultimately, although advertising is cheaper, you are going to have to pay extra freight, extra customs, extra, whatever we take care of that, obviously, but you have to make sure that the numbers make sense. See if you can ship directly from China to Mexico, that would also be a huge cost saver. The number, but the most important thing is check the market and see where competition is priced. See if you pride yourself at that point, or maybe even just a little bit higher. Could you make it work? And do you have ways of making it work? If you say, I can't make it work right now, but if I was shipping straight from China, I think the numbers would be fine. Okay, cool. Then reach out. And then what we can do is we can run a couple of test batches where you're going to be breakeven instead of making money. Like when we see that the market works, if it does cool, let's start sending over pallets from China. It's, it just makes sense, but really look at the numbers and you're not going to have the demographics knowledge. You're not going to have the cultural knowledge and Oh, Mexico loves. You're not going to know, but if the number looked like it can make sense to you, then reach out, man. Like we, we do a lot of the legwork or all of the legwork in just making sure that we're having, making as informed of a decision as possible. So can a new private label item or product start their journey through you guys as well, or it should be established somewhere else? That is a great question. The logistical differences would be very difficult if it was like, Hey, okay. I found my product. I'm ready to start the private label. And it's okay, but we're in Mexico. So keep that in mind. So it's somewhere else. Make sure you can get it here. Make sure that it fits regulations, which is something we also do. But if it's, if you're just talking in general, let's say the logistical side of the question, absolutely. You can start in Mexico, Mexico. Like I said, CPC is 80% cheaper, which is already a huge advantage because for private label products, you're going to be spending that ad money. You've got to be spending that, those ad dollars. Um, and what I often see in smaller brands is they'll make the cash flow. Like they, if you can dominate the Mexican market, you're not going to see, you know, the American results yet of millions of dollars in sales a month. But if you're dominating the American market, that gives you the cash flow to then tackle the American market with a higher ad spend, and that's always just so nice. So even my personal friends that are like, Hey man, I'm selling an Amazon. I'm going to sell in the U S I felt like, no, sell in Mexico, make some cash, use that cash to actually get some ranking in the U S because Amazon is a pay to win game now, right? You have to pay to plug it up. And if you can, yeah, if you can build that cash flow, then it'll be easier. Do you guys have your own products on the site as well? I have my own personal products completely separate from the business. I can't in good faith have within the business because it would, it would open us up to conflicts of interest. Oh yeah. I have the Mexican government might not like that either. I don't, maybe I don't know about the Mexican, maybe. Yeah, I think you're right. But more, Hey man, what prevents us from your products doing well in Mexico? We go to the manufacturer. We, it's not in our best interest. It's not worth it for us. I'd rather not even open the door to that conference stage, the products that I sell, and I'm just sold for a long time. And they're just set up and I'm just saying, yeah, yeah. And I'm trying to, to, again, to prevent this conflict of interest, I'm trying to get rid of them. Because it doesn't make sense. Like this is a good product. Yeah, they're fine. But they were set up a couple of years ago. They're okay numbers. So what happens is first of all, I stopped looking at them, but two of their products that were in a niche, they were products that were in a niche, maybe two, three years ago. And what I should have done is just sold or stopped back then. Like I just stopped. It just sits there. I have someone that does the inventory and then I have intent was doing ads. And then I just stopped looking at them because again, this business really is my, my baby. It's a big one. It's a big baby, man. Oh, and it's a baby that requires too much work, baby. It's a big baby. It could be really massive because you're coming in at a very good time point and you can pretty much dominate that market. That's what we're hoping, man. Like our goal is to be number one seller in Mexico. Like my personal goal is I want to have 10,000 schemes under management. That's my goal. I want to introduce you to a couple of people that might be able to benefit both of you, you and them. I would love that. Yeah, definitely. Because if they're doing really good in the States, why not? This might be an opportunity to branch out in the Mexican market. And establish yourself. Ultimately, am I saying double your sales? No, man. Mexico is going to 15% of your sales, which by the way, if someone told you, I'll do, I'll give you a 15% sales bump. You say yes every time, but yeah. But what, what you really care about, it's still good, right? It's still good. Yeah. It's fantastic. But what you really care about is being established and through 2024, 2075, 2026, just having already been established in the country without having to think about it. Is, would you have to change the packaging to Spanish and that those kinds of regulations? We generate those labels for you and we send them out and they're just, oh, okay. An example here. This is a, this is an ugly white label. This isn't our product. This is something. Yeah. But we use these ugly white labels to say they're in it, green tea. And we're like, you know, obviously your Mexican market can't be expected to read the English. We'll just cover it in Spanish. So you're good to go. When you make those labels for them, you don't match the producers graphics, right? If we want to produce the, the producers, like the, the sellers graphic, they're going to have to spend so much money on a different production run, which doesn't make much sense. So what we say is we can actually, these are already in line. Yeah. Just chuck them in. Listen, this is what the Mexican market does already. It's not weird. Okay, cool. Awesome. My friend, it was great talking to you. Can you share what you feel your innermost superpower is that got you to this point in life? Speaking good. Yeah. Communication. Like I think, look, if I was going to be serious about it, I would say profound amounts of empathy, just native empathy, a lot of mirror neurons in my brain that allows me to really think as a consumer, think as an employee, think that, so like I passionate about like proper management of people, because I'm passionate about really like making sure you're speaking to people in their language and understanding that they're not going to align their incentive with yours, all this stuff. I'm really passionate about, okay. If I'm a consumer and I'm landing on this profile on this product detail how am I perceiving the product? What am I reading? All of this, like just understanding people, I think is fundamentally what has been really good in my journey. Very important aspect. So thank you for sharing that. Appreciate your time today for coming on our show. It was great chatting with you. Keep in touch and wishing you all the best. And after we stopped recording, we'll chat, chat a little bit. Awesome. Thank you so much for having me. Seriously. My pleasure.