First Outbound Sales Hire & Digitizing With StitchEngine.IO

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Hey, everybody. Special episode. Today we’ve got the founder of corporate merch.com and he is building stitch engine that I o. Now I know what you think. Digitizing files. It’s probably okay. Well, you got to see, what he talks about in this episode. It’s really cool how they built this automated way to digitize files. And, he’s using it for his business, and they’re pumping out a lot of orders at corporate merch.

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The other thing that’s cool is we dove into his first outbound sales hire. So we talk a lot about sales inbound versus outbound. And Daniels actually hired his first outbound and how he’s trying to set them up for success. So give and dive on in for amazing supporters for this episode we’re going to kick them off. First up super color.

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They work in your printable account or any type of shop management solution that you’re using. Mention printable part two for that gets you 50% off your first factor SAP or digitize order. All right, let’s step on into the episode.

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Daniel, where are you located?

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Oh, okay.

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That’s a nice area.

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Where’s your warehouse? Located in that area.

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what do you stock in the warehouse? This is inventory. This is produced goods, and you’re shipping it out.

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a little bit of both. so that’s that’s for more of the swag business that we have. Corporate merch. we’re, we’re doing gifting based out of the warehouse, so we’re storing customers finished products. we’re doing some on demand production out of there as well.

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Got it. So keep in. And you’ve got a team. what’s the size of the team that’s at the warehouse?

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Yeah. Right now it’s three people. at the warehouse. Just picking. Packing. Kidding. all of that fun stuff. and then we, ship out daily Fedex, UPS freight every day.

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So you got these two businesses, which I’ll actually love to dive into. Both the corporate merch.com. Which. Great domain name,

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by the way.

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and stitch engine.io, which is originally how we reached out or we got in touch,

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which you’re creating digitized DST files via an API. but yeah, I’d like to get to that. You know, the first piece of that is the corporate merge side, which sounds like that’s part of the warehouse.

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And that’s where you’re kidding. Stuff like you said, pick packing and shipping things out. How did you get started there?

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been marketing it or giving the product offering, that these businesses need. and so one of the challenges that we found, which is where we came up with search engine, was we’re just not making enough money on one request to have somebody actually go in, set up the art file. spend 20 to 30 minutes creating the stitch file.

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just for that customer to purchase one unit. so that’s, that’s really where Stitch Engine came from, trying to see. Okay, how can we offer on demand? but try to make it as streamlined as possible where we’re not manually digitizing files for the customer to only purchase one, because there’s just no way to make money like that.

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curious. And on the corporate merch.com side, too. I mean, beautiful website. By the way, if, you’re saying you want to see a great example of, a really clean site, corporate merch.com, you can see it there.

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it sounds like there’s been a fair amount of growth, but what’s interesting is you studied finance and, you know, and, we’re more of a business major, but then decide to go into this.

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You said it was, like family friends with in the industry or family member. And you took over or

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Gotcha.

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So as someone who is professionally trained, in fact, you know, most of us do not have, very professional background like that, which is amazing that you do, because we need more of that.

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Were there any things that you set up when you were running your company? Now that you know you have picked up from school or from, previous finance roles that are maybe good practices that others can use.

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Yeah. I think the one metric that kind of changed our business and how we look at our business is we were so focused before on our actual, margin percentage. we were so focused. You know, it has to be 40%. 50%. Right? And then we were talking to some other people and they said, listen, like margin percentage is great, but you should actually be looking at the margin dollar that you’re actually going to be bringing home.

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Right. And that kind of transformed our business where on 810, let’s say we could be making 80% margin. Right. But the actual margin dollar might be $0.20. and so it was really focusing on, okay, how much margin dollars are we actually making on each item. and not focusing so much on the actual, margin percent because, you know, you could be making 200% margin, but if for there’s the actual margin, dollar is only $0.20.

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Then who cares?

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Interesting. That’s a similar concept. We. We had a guy in the show, Nick, who started print profit.com, and he’s helping shops do something similar to that. Literally where you’re, like, adding

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he calls a contribution margin, but it’s sort of similar and you’re adding it to a bucket of your overhead and that when you break even then the rest is called profit for that month.

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what was so before you made that shift and after you made that shift, what was it like? How did that retrain you? Maybe the sales team or whoever you’re working with?

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Yeah. Well, because we’re kind of just, you know, brokers, right? So we’re always just seeing how much we can, mark up a product. our sales team and project managers that were quoting our projects, they were always so focused on the margin percentage where, you know, on a on a t shirt in the corporate space, you know, we might be charging $15 for a t shirt.

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Right.

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looking at the margin dollar, you know, if the t shirt costs $4 from San Ma, another $2 for us to print it, you know, we were only going to charge 1150 or $12 based on our, margin percentage. but then once, once we kind of looked and say, okay, how much, how much actual margin dollars can we try to squeeze out of this product?

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we could then charge 15, versus the,

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$12 we were charging before.

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And then who cares about selling the low margin dollar items?

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It’s like, don’t. Don’t

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even waste time pitching in and creating mock ups and and all that stuff.

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That’s pretty cool.

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I saw that, on your LinkedIn page you posted a couple days ago that you hired your first business development person.

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is that, like, a, sales focus person for inbound, or is it I can’t management.

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Yeah. So up until now, we’ve been really lucky to have really great partnerships. with many gifting platforms. you know, Dozo and postal and reach desk. really these corporate gifting platforms. and so we were managing the swag, for those platforms. so it was a, some really good partnerships during the early days. we’re really helped us get our name out.

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and we never really focused on outbound sales. and so a couple weeks ago, we hired our first outbound sales rep. who’s, you know, building email marketing campaigns. phone calls every day. just, you know, working on, spreading the word. just because everybody needs promo products, it’s just about getting your name, in their minds, at the right time.

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which is going to be his job.

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That is really cool. We talk a lot about that in the show of building an outbound channel. That’s a little bit more predictable than just relying on pure inbound.

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What have you done to set them up? So, because I think the next question is. All right. you know, maybe, I need to give them a list of leads to now reach out for.

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I need to, you know, give them some structure. How have you set that foundation or what have you done there?

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Yeah. So we’ve really found that phone calls are a lot more effective than emails. we find, especially in the print and promo space. the emails can kind of come off as spammy. and a lot of people are getting a bunch of emails like these every day. and they’re most likely not going to respond or even read the email.

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and so what we’ve found more success is calling, having a conversation with someone. so then, you know, getting phone numbers is a lot more difficult than getting an email address. we’ve been using, a couple different platforms. apollo.io, zoom info and this new platform that we just started using for phone numbers called cognizant.

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all of them kind of specialize in building searches for, you know, let’s say you want to reach out to the marketing person at a company in the tech industry. 50 to 200 people. companies. so you can create those different lists. you know, you you you might get 200 people that show up on the list.

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and then you can just get their email, their, their phone number. and you can just start calling.

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That is super straightforward. That makes a ton of sense. All right, so, Apollo, I think it’s Apollo that I. Oh,

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is the

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website that you can sign up for. The zoom info is another good one that you mentioned. There’s a bunch of these that yeah, you can you can create these different types of filters for who your ideal customer is and then get their contact info, which is pretty wild, but it works.

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So when they call them,

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they’re calling and emailing, you know, are you sending like, a gift like, here’s, here’s exactly what we do. Like, how were you try to stand out, right. Because on the flip side, a lot of people also receive a lot of calls as well, maybe not as much to the skill as his email, but.

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a lot of the promo outbound is email based. maybe, you know, direct mail based. but what we’ve been finding is a lot of people aren’t actually getting phone calls.

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which is. Which is interesting. so, you know, we’ve been trying to target,

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who’s the actual user who has the pain point, right?

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So everyone wants to sell into marketing, right? Because they they have the biggest budget.

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but but if you’re calling the

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director of marketing, right? And you’re trying to pitch them, they don’t they don’t think that there’s any pain points with how the conference team is purchasing swag and getting it to the booth. right. Because they they think everything is working perfectly.

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But once you actually deal with the marketing associate. Right, who’s actually boots on the ground at the conference? who’s working with the vendor because they didn’t put the right label on the box. Right. Once, once you talk to them and say, listen, we we know that you are purchasing a ton of swag for all of your conferences.

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And, you know, boxes. Boxes are always getting lost. And it’s such a headache. You know, we do, you know, these four different things to make sure that your life is easier. it’s a much easier conversation because we because we know exactly the pain point that they have.

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And then the other tricky part that people run into is compensation structure. So,

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know, how do you motivate? How do you motivate people to to work these leads down the funnel. Like what are the the the points that you’ll maybe commission on. Is it, you know, number of calls. Is it, just pure, plain closed deals?

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Is that the easiest? because I think some people, you know, we tend to make it too complicated at first. And then it’s hard to motivate because people can’t just in real time calculate what they’re going to make at a, in order. What have you figured out there?

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Right. Yeah. And, you know, just to start, it’s a really tough job. You

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It

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is. It’s a grind.

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you’re getting hung up on yelled at. it’s a really difficult job. and so what we’ve done is we set up a base salary, with benefits and health care. so that they don’t have to worry about, you know, if they’re going to be able to pay rent, right?

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set it so that they’re motivated enough to want to actually go out there and sell and hustle right where the where the base isn’t enough to be their total annual, compensation. and then we just give them a, bonus based on every closed deal. Right. So we don’t care if they make 15 calls or 200 calls per day because they’re not getting paid per call.

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They’re not getting paid per meeting booked with us. they’re they’re they’re getting paid per, a percentage of the order that they’re actually bringing in.

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But do you measure the steps to get to the order sold? Is this other issues I’ve had? And maybe this was just because there’s the wrong person. But they didn’t understand that it was a funnel, right? You know, you had to make 100 calls today to maybe get ten on the phone to have closed, you know, you know, be able to send out five quotes and then close like two.

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So

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are you reviewing those metrics too, or it’s just, hey, look, here’s what you know. Here’s what I think you need to to be successful. Here’s the numbers that you should had. And then you’re compensated based on closing deals. So go ahead and get it.

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Yeah, we’ve. We’ve really just tried to keep it simple. You know, saying, you know, we we know that, you know, it might take four steps to actually get that person to purchase their first order. but where you’re going to get a percentage of every order that they place. you know, so it’s the first order and you brought them in or they purchase, two orders that year and you didn’t have to deal with them for the second and third order.

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your you’re still going to get a percentage of every order that they bring in.

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Got it. Does the commission percentage change depending on the product category? So, like, you know, Apparel’s 5% Pro and 10% or whatever.

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no, we’re we just keep it flat across the board.

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that that’s pretty cool. Is that is that roughly in the range? You know, it’s like sub 10%.

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I’m curious, you know, corporate merch and just running this business. Running search engine. You’ve got a, a couple other projects that you’re building up to.

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What consumes your mind? Like, what do you what do you feel like you think about?

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you know, you woke up this morning. What was the first couple things you thought about?

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Yeah. Really? Just how do we make the business more efficient? you know, I’m sure that the shops that you work with deal with it as well. but if you really don’t have the right software and operations, the business can just drown you. because there’s so much back and forth. customers need the product so quickly.

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it needs to be perfect every time. and because there’s so much competition out there, if if you mess up once, they are just going to go to someone else. and so it’s really just being perfect on every single order. but that really just comes down to having the right systems in place. but it’s tough to have the right systems in place as well because, you know, you’re, you’re trying to build the systems while also, growing the business.

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which is tough.

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Is there any recent efficiency tweaks you made that you remember?

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yeah, we just integrated the promo standards. which has been exciting. which has been months in the making. So now we can send purchase orders via API. pulling product data into our system and website via API. so try to bring down the number of emails back and forth with customers asking it for certain products in stock or what the prices.

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all of those kinds of things.

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And this is a custom integration to your website, which is custom as well.

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So you’re working with, like, a development team to help build all of this stuff out.

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yeah. We we have an in-house, development team. for all of those that are looking for developers. highly recommend Upwork. that’s where all of our long term software developers came from. started with them on Upwork. and then they started, working with us full time.

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That’s cool. Yeah. There’s so many, good and bad stories, I think from from people building custom

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stuff, including us.

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you know, it’s things more expensive. They take away longer than anticipated. you know, managing and product. Managing a build is very different as any. I mean, I shouldn’t say it’s very different. I do think, though, it needs a an additional layer of specificity as far as what you want.

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Because if you leave us, you know, assumptions out there in the, in the ether, the, the results are going to come back different than what you expected.

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Yeah.

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you kind of know, as you’re trying to come up with different decisions, you’re trying to think of every single use case that might

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touch that.

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feature that you’re building and try to make sure that you build it the right way.

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it’s really challenging.

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Yeah, it’s pretty crazy. I mean, even it’s like, hey, I want a button here that does this. Okay? What does the button look like? Where is it placed? Like, you know, is in top right is top left. Is it below the menu? All right, so there’s an error. It doesn’t work. Now what? All right. It’s a it’s a successful task.

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Now what? Where does it go like this? the tree and decisions. And I feel like 50% of the time, you just be gambling if you don’t specify some of those things.

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I

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mean, you literally gambling because you just spent hours with an engineer

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that billed you for it?

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Yeah. speaking of web applications, though, stitch engine that I.

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Oh, really cool product that you’re building. and the headline on here, right at the top, generate DST files using an API. So, you talked a little bit at the beginning, though, but, you know, where did this come out of? You mentioned it was having to do with minimums to be able to hit them. what was that about?

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Yeah. So this really came from the corporate merch business. we we started offering print on demand products in our platform. So customers can go on and purchase one T-shirt, one North Face jacket, one pair of AirPods. so for when it was printing and laser engraving, super easy. because you don’t need any special file. But creating these stitch files we found was just so time consuming.

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I personally don’t come from a background of, digitizing, so I didn’t know that it could take sometimes 20 or 30 minutes per file just to create the actual stitch file. and so when, when we’re processing hundreds of print on demand orders per day, and customers are just purchasing one item. the financials just didn’t make sense of paying somebody between 4 and $10 per file to, create the file.

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so we really started working on a solution where we could try to build software to, actually create the file itself.

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Wow. And you know, I think the first thing people are going to think about who do embroidery or have digitize a file is they’re going to say, no way. Like, maybe this gets you 80% of the way there, and then you need someone to, you know, manually finish the rest of it. what what’s your response to that?

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Is it is it truly autonomous?

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Yeah. So I can confidently say that 100% of our print on demand orders from the corporate merch platform. we have not touched one stitch file ever. and that’s probably about 4000. Or they’re so far that just needed stitch files. we have we have not created or touched, any file so far.

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Wow. That’s pretty impressive. So you built this, you know, whatever you can share. I don’t know if there’s, like, secret sauce. There’s, like, you know, little people,

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somewhere overseas that

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are quickly returning the image or not. If. Did you see the, did you see that article that came back about the Amazon

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Go stores?

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so if you if you ever been to an Amazon Go store, it’s basically a concept where you can walk in and walk out without going to a cash register. I mean, literally, you pick up, you know, a coffee mug or a candy off the wall. Maybe you put one back, you pick up a milky way and you leave, and it’s able to charge your credit card.

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because when you walk in, you swipe your credit card to walk it, but that’s it. and if you look at the ceiling, there’s like, cameras everywhere, maybe six inches, 12in. There’s cameras pointed in all kinds of crazy directions, but it worked well. So, you know, you start to think, what’s the future? If I get a grocery store, I don’t need to go to a check out.

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I just have to pack my stuff and leave. Well, turns out that there’s just like hundreds of people over in India that are literally watching the cameras and adding and subtracting items together and following people. So, you know, someone walks in, okay, they’re assigned to one person, they’re, oh, pick up emblems at that item and so on, remove this item and then charge their card.

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So

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not

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as

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right

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I mean, look, I think every project that you kick off, you don’t want to spend the time building that tech. You want to try to manually get it working to see if the concept is there. It’s a lot cheaper. it’s clear they didn’t get to the next step of the autonomous aspect, and maybe because it just wasn’t a profitable exercise, you know, popping up these stores and and so on.

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But yeah, pretty wild. It’s just people watching you. just charging your cart there.

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But,

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can promise that there is no one in India or any other country, who is quickly. creating a file for our customers.

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That’s really cool. Okay, so this was the engineering team that you worked with to help build this. What was the process like to build Stitch engine?

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Yeah. So it’s funny, everybody thinks that it’s. I, everyone’s convinced, and it is not I we’ve we’ve thrown in some AI to kind of see if it would work or if it would be helpful. and the results were really terrible. it just it just did not a great job. it’s basically all, machine learning.

00:28:59:23 – 00:29:28:06

you know, just feeding it hundreds of rules, based on stitch types, and how different types of logos look. and the question that we get on every single demo, you know, what, what percentage of your logos are good? You know how how many are just completely wrong? and we, we kind of thrive on when the logos don’t come out perfectly right, because customers tell us they send us back the file.

00:29:28:12 – 00:29:43:15

We then give it back to our system and say, hey, you know, you guys created this file. These are the four different things that are wrong with it. and so then the system just learns, from, knowing its mistakes.

00:29:43:15 – 00:30:06:21

is it pretty dialed now to this point? I mean, I’m assuming that you fed it so many different types of logos. Granted, you know, I don’t know if people are, like, uploading photos or goofy stuff. do customers also upload? I’m assuming images that just can’t really be embroidered that like this is not, you know, the letters are too thin or this is too small.

00:30:06:23 – 00:30:08:03

How do you protect against that?

00:30:08:08 – 00:30:40:19

Yeah. So we first started. We built the whole system using, lettering. so we were like, okay, let’s let’s try to auto stitch, just text. so started auto stitching text. and then we moved on to logos, which is objects and text. and so the difficult part about that is trying to adjust the stitch compensation for when there’s objects and text, you know, because let’s say you have a shield, right?

00:30:40:19 – 00:31:05:03

And there’s a fill and then you’re putting a border, around that shield. there’s different compensations for those stitches than you would have for text. and so that was really what we were, what we’ve been spending, a lot of time trying to dial in, to make sure that the actual stitches, come out crisp and, you know, without extra stitches.

00:31:05:09 – 00:31:21:10

That’s pretty cool. Now, people that want to use this, Can they just use a web interface? Obviously, it says via API, but not everyone is wanting to or can build something into an API. Is there a way just to drag and drop files in?

00:31:22:00 – 00:31:46:05

Yeah. So we we built it using the API. So we were an API first company. You know, let’s build this system for an API. And then we built the interface on, on top of the API so customers can go in there, create an account, and just drag and drop files, using the interface. for those that want to use the API.

00:31:46:07 – 00:31:48:12

they can they can use the API as well.

00:31:48:14 – 00:32:12:12

That’s cool. And then the pricing too. So how does this work? Right. So this credits you buy a bundle of credits. but how does that work with the file size? So it is, by stitch count and, and that’s how many credits you take to be able to process a file. Because, for example, it’s like if you buy 25 credits, it’s $100, but then it says price per credit is $4.

00:32:12:12 – 00:32:13:09

What does that mean?

00:32:13:16 – 00:32:32:09

Yeah. So one file equals one credit. we don’t we don’t charge per stitch count. because companies do that because when someone’s manually creating that, that stitch file, if it’s 20,000 stitches it’s going to take them longer than if it was 5000 stitches. but

00:32:32:12 – 00:32:33:21

Got it.

00:32:33:21 – 00:32:40:15

software based, we don’t really care if it’s 50,000 stitches or it’s 2000 stitches.

00:32:40:17 – 00:33:04:01

and so everything is just per per, file. and what’s also nice about the billing system is we only charge you once. You actually see the 3D preview of what the actual GST is going to look like. so you can upload your logo. It’ll show you a 3D preview in about 10 to 15 seconds of what the actual stitch is going to look like.

00:33:04:03 – 00:33:18:09

If it looks good to you, then you can purchase the DST and that’s when you actually get charged. if the system just did a terrible job and you don’t, you don’t want to buy it. You know, you don’t get charged for it.

00:33:18:11 – 00:33:22:12

Pretty neat. What’s next, do you think, was stitch engine or where does. Where do you go from here?

00:33:22:20 – 00:33:54:18

Yeah. So it really started because customers were asking us from the, corporate merch platform, you know, how were you guys doing this? And so we finally spun it out into its own, product. but I think we’re really focused on the e-commerce print on demand platforms. you know, some of the biggest ones out there. everybody thinks that they have some automated way of creating these files, and they don’t.

00:33:54:23 – 00:34:20:17

It’s a team overseas. or, you know, customers are uploading their own files. but they are definitely not automating it at all. but it’s really about trust, you know, the as as we’ve seen, you know, the testing time for customers onboard. they want to test hundreds of files, before they move away from their manual process.

00:34:20:19 – 00:34:26:12

so I’d say that’s one of the biggest hurdles that we’re, trying to fix. Now.

00:34:27:08 – 00:34:51:14

That makes sense. Yeah. I mean, just to be able to have a really clear markup, I think to it as far as what this embroidered polo or whatever it is looks like with your logo. Right? Because, you know, especially people that may not know, you don’t want them to be surprised when they get their stuff. And so how does this exactly look up and then quickly, right.

00:34:51:14 – 00:35:02:00

That I love to call it that sticker mule experience of when you get a markup just so fast, it takes you right away that you’re able to continue the order and and move things forward.

00:35:02:00 – 00:35:23:04

Yeah. One of the cool things that we do as well is so from the print on demand side, we have eight different factories that we can send orders to. And each of those factories have their own thread list. so the system will actually handle different threadless. and when it creates the mock up for you, you, you you tell it which Threadless you want to use.

00:35:23:08 – 00:35:53:15

And it’s actually to show you the mock up using the closest to right that you had in that list. and so coming from the corporate side, you know, customers are really picky about the exact right color that that’s going to be used on their logo. and so now, you know, if our Threadless doesn’t have a perfect match, orange, using using the mock up that, that we show them, it’s, it’s going to show them the actual thread color that’s going to be stitched.

00:35:53:17 – 00:36:02:00

so, so now there’s no more guessing of the customer gets that vest and they and they thought it was going to be orange and it really came across.

00:36:03:08 – 00:36:04:00

like with the

00:36:04:00 – 00:36:05:00

Pantone two

00:36:05:00 – 00:36:06:12

or just trying on.

00:36:06:12 – 00:36:08:08

Oh. Okay. Even better.

00:36:08:08 – 00:36:11:12

Because, you know, with monitors and screens and whatever the heck people are looking

00:36:11:12 – 00:36:13:00

at it on could still be different

00:36:13:00 – 00:36:14:01

than in real life.

00:36:14:01 – 00:36:24:13

That’s really cool. Well, this is awesome. so people can sign up, they can go to stitch engine, dot io and book a demo or create account with you and get started.

00:36:24:21 – 00:36:36:01

Yeah. And I believe we give three, credits for free just to go on and test it out so you can create three different files. just to play around with it and kind of see how it works.

00:36:36:21 – 00:36:58:07

Love it. I love featuring and just seeing new technology. So hats off to you. There’s a couple of people I want to send this to right after. you know, I think this space needs more, technology innovation, and and you’re definitely at the forefront of doing it. So, Daniel, I appreciate you sharing this corporate merch.com search engine that I o.

00:36:58:10 – 00:37:01:01

If anyone does have questions, what’s what’s your email?

00:37:05:19 – 00:37:10:13

All right. Daniel at Stitch engineer. Or if you’re in the New York New Jersey area

00:37:10:13 – 00:37:12:01

be sure to hit em up.

00:37:12:01 – 00:37:17:21

There’s a lot of shops out there as well. you’ll have to get a booth at Atlantic City. It sounds like you’re something. Next.

00:37:19:05 – 00:37:27:21

All right, producers, thanks so much for listening to this episode of our pronounces podcast. We appreciate you being able to join us. Hope you have a great week and see you next one.

00:37:27:21 – 00:37:50:02

Thanks so much for listening. Hopefully that was informative. Don’t forget to subscribe. Don’t forget to like, don’t forget to hit the bell for notifications. If you enjoyed this video, if you enjoy all the stuff we’re putting out, it’s really helpful. We love to just be able to see it. That means that we’re doing a good job. To subscribe, hit the bell for notifications and hit the like button and I’ll see you in the next episode.

00:37:50:03 – 00:37:56:10

Bye.