In just four short years the co-founders of product development consultancy Sourci have changed the way many Australian entrepreneurial hopefuls approach manufacturing.
Giovanni Pino and Ellie Vaisman, who co-founded the Melbourne-based company in 2018, simplify the product design, procurement, manufacturing and supply chains processes for their diverse customer base including influencers, corporates and everyone in between.
Their approach to connecting business owners with manufacturers has helped Sourci become one of the go-to companies for those with a good idea. There’s not much the company won’t touch either; Sourci has helped develop creations ranging from garments to skincare, sunglasses to 35mm cameras, and even sex toys.
As a result, Sourci has soared in 2022. Over the course of the year, the company has expanded its client base, won the 2022 Australian Young Entrepreneur Award in the Manufacturing, Wholesale and Distribution category and its Melbourne equivalent, and expanded via acquisition.
The fully-bootstrapped company’s success was all the more impressive considering supply chain disruptions and China’s COVID-zero policy - both issues that are ongoing to this day.
Speaking to Business News Australia, co-founder and CEO Pino said the company spent a lot of time this year educating customers about the reality of the situation.
“There were periods where suppliers did have to close because of COVID, and it’s still a challenge now,” Pino said.
“There were challenges around the world, experiences with inflation, the costs of raw materials going up. We did see the dramatic rise and fall of freight costs too - so it’s hard for businesses to really nail down the true cost of their goods, but that’s something we can help with.
“A lot of our clients are those small to medium sized e-commerce brands which do need a bit of reassurance and insight. Even though it's very hard to control certain elements in this environment, we like to think that at least our customers are very educated on what’s happening.”
Over the past 12 months, Sourci claims to have created more than $150 million worth of retail value for its customers, which includes a growing number of influencers and Australian personalities.
This includes the likes of Australian basketball superstar Sara Blicavs, AFL powerhouses Jack Redden and Xavier Ellis, and influencers like model, presenter and entrepreneur Tess Shanahan.
Pino told Business News Australia these celebrity clients came directly to Sourci to manufacture their goods, which go beyond just a name or a logo thrown on a water bottle.
“I think the problem that influencers can get themselves into is just putting out a product for the sake of putting out a product,” Pino said.
“By partnering with us, we move away from saying ‘Hey, what can we just throw your logo on?’ to encouraging them to build a successful brand. It’s allowed us to help them develop better quality products and brands that actually match their elevated status as well.
“Whether it's candles or sunglasses or t-shirts, there’s often very little thought or effort put into the product and the audience will see and feel that, and that’s damaging their brand reputation in the process. For us, we want to protect that at all costs - we want to be a part of their journey and help them put out some pretty incredible products.”
Securing these big names builds on Sourci's success in e-commerce to date; the company's client base includes the likes of self-tanning brand Tanzee, luxury jewellers Tiffany & Co. and skincare giant Frank Body, all supported by Sourci's team of approximately 40 people.
And while the pair are open minded to most projects that land on their desk, there are some limitations; the company isn’t in the business of inventing new materials and generally avoids complicated, electronics-heavy items that have years of R&D built into timelines to get them off the ground.
Instead, its expertise lies in connecting great product designers and innovators with manufacturers. For example, e-commerce brand Vush Stimulation approached Sourci in 2020 to find a manufacturer for its new line of vibrators. The brand had so much success that one of the vibrators wound up being featured in a Cardi B music video.
Breast pump maker Mum's Milky Way is another of Sourci's clients, and approached the product developers in order to find a manufacturer that had high standards and wouldn't compromise on quality, having been burnt previously. The Sourci team also worked with the brand on freight and logistics.
“Everyone has great intentions, but some of these influencers don’t come from a background of running e-commerce businesses or brands, so they might come to us with something that has really great intentions but it’s not that simple to execute,” the CEO said.
“Our goal is to understand what they’re trying to achieve and then hopefully enlighten them on what the best approach is.
“It’s when you add four or five different elements to an existing product or create a new product where it becomes really difficult for us to execute and manage at a price point that’s either valuable to them or in a time space that’s valuable to them.”
Adding value through acquisitions
2022 marked the beginning of a new direction for Sourci - one that would see the company become not just a brand developer, but an acquirer too.
It kicked this era off with the partial acquisition of The Stubby Club - a merchant of sports team-branded stubby dispensers among other novelties - completed via a 'significant cash investment' in the company made in August.
Following that, the company has turned its attention to scaling brands it helped build by taking a minority stake in Noonie - a postpartum care product brand for new mothers. According to co-founder Vaisman, Sourci was involved with Noonie from the beginning with the brand’s hero product - the ‘Noonie Padsicle’ - which the company worked on as its product development and sourcing team.
“We worked painstakingly on the development for over 18 months with the founders until we perfected the Padsicle! Being a world first, it was an incredibly challenging piece of product development, but we got there,” Vaisman said.
“We're always looking out for brands that have a strong purpose and genuinely solve a real world problem.
“Noonie has exactly that, and it has been a hugely successful in its early phase, this is exactly where Sourci can come in to supercharge their growth.”
Vaisman said Sourci will be playing a greater role in the Australian e-commerce landscape moving forward by acquiring brands via investments and rapidly expanding their lineups, alongside providing founders with an un-capped line of credit to ease supply chain woes.
“This is crucial so that they can actually support the market demand with stock on hand as their growth explodes. Cashflow is paramount for a scaling brand,” Vaisman said.
“With us managing their entire supply chain, consumer brands can focus purely on sales & growth, without the majority of operational headaches that can often bog down ambitious leaders. This results in compounded success with each playing to their strength.”
Vaisman told Business News Australia that growth via acquisitions will remain a core part of the business model into the future, allowing the company to achieve new levels of scale previously locked off to the co-founders.
“What we've found is that many founders are great at building a brand and gaining traction in the market, but where things start to fall apart is when their business starts scaling and all of a sudden they have a very demanding and complicated operation on their hands. We've seen countless founders crash and burn by not being able to manage their inventory and operations, ultimately failing to keep momentum and eventually losing their advantage,” Vaisman said.
“So whilst we may develop amazing products for our clients, if they fail to scale their business properly these amazing products will often end up in the e-commerce graveyard - and all of our cumulative efforts can end up being effectively wasted. We come in and support the founders operationally, help with forecasting, budgeting, and provide a line of credit for their stock.
“With their full efforts left to focus solely on what they're good at (selling and building their brand), the business has the foundations it needs in order to see continual exponential growth.”
To further support this, the company has recently brought on in-house industrial designers and garment technicians who are ready for whatever clients might throw their way.
In addition, the implementation of trend-predicting technology means the co-founders consider themselves ahead of the game and are able to know ahead of time what might fly off the shelves. They can then pitch these ideas to e-commerce brand owners as new products for their lineups.
“We’re starting to take that part away from the customer as well and asking ‘How can we just bring you the products that you want and can monetise?’” said Pino.
“We’re really working on building our own products that we can take to market to better support our own customers who are too busy to sit there and think about their next move.”
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