159: How to Create Profit in your Design Firm with SideDoor
Michele 00:01
Hello, my name is Michele and you're listening to Profit is a Choice. Joining me today is Chad Smith of SideDoor. Chad is an entrepreneur with a long background in the design industry. On today's podcast, we're discussing how to monetize and streamline the ordering and procurement process. By using an online tool that is digitized this order process, SideDoor can be used in a multitude of ways in your business. And I hope you are as excited about learning and considering the opportunities as I am.
Michele 00:38
Every day empowered entrepreneurs are taking ownership of their company financial health, and enjoying the rewards of reduced stress and more creativity. With my background as a financial software developer, owner of multiple businesses in the interior design, industry, educator, and speaker, I coach women in the interior design industry to increase their profits, regain ownership of their bottom line and to have fun again in their business. Welcome to Profit is a Choice.
Michele 01:09
Hey, Chad, welcome to the podcast.
Chad Smith 01:10
Hey, Michele, happy to be here.
Michele 01:12
Great. I am excited to talk to you. I know that you and I have talked outside of the podcast on and off a couple of times. And I was able to present a webinar for SideDoor and you just had a lot of great questions. And it struck me I was like, my gosh, why have we not talked on my podcast? And so thank you so much for saying yes when I reached out to go, can we please keep this conversation going?
Chad Smith 01:36
Yeah, of course. I actually listen to your podcasts and I'm honored to be on and appreciate the opportunity.
Michele 01:42
So let's jump in check before we talk all about SideDoor and what it does and how it does and certainly how it impacts our financials and our opportunities to make money. Tell us a little bit about yourself and your background. And what led you to SideDoor.
Chad Smith 01:56
Okay, well, I have been an entrepreneur in this industry for 28 something years, I started my first business when I was in college, I grew up with parents that were both entrepreneurs. My mom is an interior designer for the last 50 years. And I grew up kind of knowing I wanted to be in business. I also didn't get my mom's creative side. My dad is an accountant and financial advisor, I got more of his work genes. But I've always loved business, growing things. And just the whole entrepreneurial journey has always been interesting to me. So I started my first business in college, I've had eight or so different businesses all in the home furnishings space, some successful some not so successful. But all on the business side of home furnishings and interior design.
Michele 02:55
Awesome. And so, as and I love that some successful, some not successful. I mean, isn't that the truth for all of us, we're all trying different things, you know, in shifting our business practices and industries around us are shifting. But we learned from each one of those endeavors, right, and then take that into the next one. Hopefully.
Chad Smith 03:15
That's exactly right. And it all kind of led me to where I've been the last three, I guess, almost five years now, which is on the intersection between technology and the industry that we're in, which historically has been a little behind in embracing technology. But now, you know, especially in these times, everybody's eyes wide open to the reality of what's coming, the all the changes and opportunities in the digital economy, but still trying to figure out how to make it all work in an industry that's not kind of is still more analog than digital.
Michele 03:57
Right? Absolutely. And I think that's part of the, the conversation that you and I were having when we were doing the webinar for your clients and people that weren't with you. And, you know, my first 10 years were in building software, accounting software that and so I have very much that accounting, engineering background, you know, way of thinking of things and then moving into the window treatments and the design part of the world and being able to mix them as what I find thrilling, and mix them in a way that also is financially viable and sustainable for the short term and for the long term. And so, you know, any anytime we're looking at how to merge and mix and use technology and be financially smart and astute, while also being able to be creative and enjoy that process, I mean, to me that is like that. That's fun. That's exciting. That doesn't even feel like work to me that just that is what gets my brain creatively going.
Chad Smith 04:55
I feel exactly the same way and the reality is like, you can either use technology or it's going to be using you and it doesn't. And I am by no means an engineer, I'm kind of in the role of translating things for the engineer and more technical side of our team, but also translating the technical side to the creatives, which a lot of it can seem more complicated than it really is. So we're in a nutshell Michele, just trying to simplify what is a complicated process for your designers, for stagers, ie designers, they're all running as you know, very nuanced businesses with a lot of different, you know, balls up in the air, and trying to take what's complicated and simplify it in a way that makes someone's life more, you know, useful and efficient. is our goal. Anyway.
Michele 05:54
I agree. I agree. I love that. So fill us in then on how SideDoor got started and how you got involved to the SideDoor?
Chad Smith 06:03
Yeah, well, I was actually, before this, I've worked on a project management software for interior designers, and then did some consulting with another kind of tech marketplace and design over in England. And when I came back, this was probably mid 2019. Well, while I was in England, one of the people I contacted in the US to possibly work with was Lindsay Humphrey, who is a she's technically the founder of SideDoor. It started out she had a business called design collected, which still exists today. And that was all about helping specialty retailers get online, in the home space. And we together, just started talking. She's well versed in the industry as a designer, but also business person, she's got a handful of businesses, her family actually is the family behind Alder and Tweed, which is a big wholesale online, they also have a commercial design firm. But Lindsay is an entrepreneur at heart. So she recognized this problem. Together, we talked about it and just decided to give it a chance. It didn't happen overnight, we launched SideDoor in the middle of this pandemic, frankly, before it was fully baked, just because everybody was online, and there was a window of opportunity there. So we tested it out with about 100 designers and asked for feedback. And as you know, designers are not shy with feedbacks, we got plenty and kept iterating and iterating with the intention of making it easy. Knowing full well that what's behind the scenes is not easy. The customer designer facing product, we wanted to keep as simple as possible. So it would work with the widest, you know, variety of designers from the new designer to start now to the seasoned designer with a firm that does commercial interior. So it's not easy. I'll be totally honest with you Michele, the industry itself, as you know, is complicated is kind of somewhat archaic and some of the business practices but our timing was right in that like COVID, frankly, sped the rush to get online for all these trade brands, all these manufacturers, all the people that have been reluctant to embrace the Internet, and the change that comes with it didn't really have a choice by over the last year. So they were more receptive. We launched with about 50 or so brands, we've got about almost 150 now. And the reason it's working, frankly, is we're trying to be three things, we're trying to be easy. We're trying to be totally transparent, and we're trying to be digital. And as anyone in the industry knows our industry, frankly, is hard. It's opaque as in not transparent. And it's really analog as in a giant catalog or someone wants to send you an 80 page PDF, and no one can give you a simple answer to the question How much does something cost when you ask them so these are all the things that we're trying to simplify and put online and a free and well you know, free and hopefully useful tool for the designers.
Michele 09:43
So you know what's so interesting about that and I appreciate the easy transparent and digital kind of goals that you all have. And that is the from the outside looking in. I think many people think that design is so easy, right? And I'm not talking certainly about designers because we know that it does not The average person on the outside looking in that's why they might say, Oh, well, if you're out and about why don't you just find a sofa that you think might work for me? And not understanding that that's not how it happens, right? Most, unless you're already in process of working with that person, you don't just go out and think, Oh, I think that sofa looks like Chad, I think I'll call him. I mean, that's just not. It's not generally how it works. And we have so many DIYers, and so many people showing things that I think that even design students have this somewhat glamorous, ideal of what our jobs look like. And they don't think about the fact that the creativity of the design is about 20% of what we do. And 80% is all this back end business procurement, watching, checking up following through getting pricing, creating budgets, creating, you know, all of the Yeah, the work and the documents, it's so much. And so that's why I love that you are, you know, thinking about it from the perspective of let's make it look easy, and make it be easy for our users knowing that we're taking on kind of the weight of all that work on the back end.
Chad Smith 11:11
Well, Michele, that's what's so helpful for programs like yours teachings like yours podcast like this, because the reality is, what drives success for the business owner is, frankly, the repetition of like some of the boring basics, if you will, those are the things that make the difference. Not the I mean, the things that are exciting the things you see on social media, the influencers that may get attention, you need that as a marketing tool, but that's not your business. Those things don't drive results, they may drop fans, they may drop traffic for a little bit. But it's not really going to drive anything to your bottom line unless you do things like you suggest, which is run a business, like a business, not a not like how do I say that, like a hobby, it's not a hobbies, unless you want to be out a unless you want to treat it as a hobby. If you want to make a living and support your family, you have to do the things that you recommend. And a lot of designers push back on that, because it's not what inspires them. It's not what makes them feel like they're really tapping into their talent.
Michele 12:23
It's not the sexy part of the business, right?
Chad Smith 12:25
It's not. It's the boring basics. But if you don't do those boring basics, you're not going to be around very long. And I've seen it over 25 plus years, you can be the most talented creative in the world. But if you can't pay your office around, you're not going to be around next month.
Michele 12:43
And that's exactly right. Alright, so I want to jump in and talk about how this is, of course, the financial impact of all of this. But before we do, could you give us an overview of how SideDoor works, because we've talked around it, kind of, to what it is, and a little bit around it. But I really would like to have you kind of describe with words, how the SideDoor process works, like what would a designer do? How does it show up? How can they use it? And then let's talk about kind of how it can grow their business financially. Because here's the thing, money is money, but time is money.
Chad Smith 13:19
Absolutely.
Michele 13:20
Right? So what we're looking at when we're looking at financial stability, and we're looking at gross profit and net profit, we're looking at a couple of things, in my opinion, we're looking at, and I always say is easy to make money. And this is how easy it is. Right? Or maybe I should say it's simple, not easy, it's simple. But the simple formula is you sell the right product or service to the right person at the right price, and then you manage the heck out of it. That that's it.
Chad Smith 13:47
I agree completely.
Michele 13:48
And so the manage the heck out of it is part of that whole back end process, procedural, and so we can sell the right product to the right person at the right price. But if we don't manage the implementation of that product, the finality of that sale at that's where we're spending all of our time, effort and energy, we're going to lose money. You know, it's not just about getting the right price. That's why I can work with people that when they come to me, I might go, we don't need to increase your prices, what we need to do is increase your effectiveness, the efficiency, the decisions that you're making. We're seeing a lot of people right now going I need to hire, I need to hire I need to hire, but at the same time, they are scared to death that the industry is going to turn and they don't want to have to go fire fire fire. And so again, you know, coming from my background, and I know that you would probably agree with this. If not feel free to say no, but I think the more that we can institute processes and procedures and use technology first and foremost, and just like take that all the way to the max that we can take it then we hire people, but if we just have to keep hiring more people because of an outdated or a broken or a slow process, we We're going to get top heavy on our HR cost, and it's not going to be sustainable.
Chad Smith 15:05
I can assure you, yeah, in my experience, people aren't going to solve your problem. They may help once you have those processes in place you help your firm grow. But just throwing people never at the problem only creates a people problem.
Michele 15:21
Exactly. Yeah, well, and, and plus, once you have your, this is the other thing that is so funny, I've been watching a lot of my designers in my inner circle or in my elite group, they've been coming back to me after we've been working through this, you know, independently for their business, and saying things like, the role or position that I thought I needed. Now that I've cleaned up my processes, or now that I've instituted some new ones, that position has shifted, it's actually many times a higher level position than what they thought they needed, because they've taken some of that minutia and some of that, you know, that that tedious work. And we're, we're using different processes to manage that. So now we need somebody with higher level decision making, you know, to come in and to help. And that that has been a game changer, because now you might be able to hire one person instead of two people. Absolutely. Yeah, totally. As we look at how SideDoor fits into that, tell us about how, how would that designer actually use it, apply it get started? What would that look like?
Chad Smith 16:26
Sure, sure. So before I tell you what it is, let me just quickly tell you what it's not. It's not a sourcing tool. everybody already knows how to use Google. It's not project management. There's dozens of those out there. We're not business coaches, we're not here to tell you how to run your business. We're, frankly, a behind the scenes digital tool that was built with the intention of helping designer busy designers make more money. And I can explain how that works. But in a nutshell, it's one simple tool that we think can revolutionize your business because it works incrementally with everything else you're doing. It's additive, it's hopefully offers up some new revenue streams that you may or may not have tried before. And it does it in a pretty simple way. So basically, SideDoor is a password protected tool for you know, licensed designers as in we need a resale certificate on file you need to be in the trade. When you come in, you now can curate collections from you know hundreds of 1000s of trade only products, then you can share those collections with your clients directly. You can share them on social media, you can share them on your website, put them in a blog, post etc. You can purchase directly from us from any of these brands without having your own account without jumping through all the brand's hoops without meeting any minimums etc. Or you can share it with client one on one or you know, just put something you love put a mood board together, put it online and when if anyone wants to check out on it, we're going to handle all the back end and we're going to place the orders we're going to handle the fulfillment once the items delivered we're going to deposit by stripe the full commission directly into your bank account. So the goal is to help designers who we think are kind of the tastemakers in perfectly positioned right now, as everything moves online to you know, grow their own brands grow their own businesses not be the unpaid Salesforce for all these other companies. A lot of designers right now are stagers or whomever using affiliate programs. Another way to look at SideDoor is this kind of like an affiliate program, but with a couple key differences. One, instead of sending people to other places to buy their stuff and spend their money, you can now share a link directly with them. That's branded as your business people can check out they think from you, but it's on our system and we're going to handle it. The other key difference is these are trade products, not generic run of the mill products that are all over the internet are available anywhere. And then finally, you don't have to wait 90 days to get paid like a lot of these reward style type programs make you wait we direct deposit the commission straight into your account when it's done. So I feel like I'm jumping all over the place but in a nutshell, there's really three steps, you can quickly sign up. This is going to give you access to all these brands, all their products, you can purchase directly from us at the pricing that you would get if you have your own account with these brands. We show Two prices in SideDoor and we don't manipulate any of them from the brands. First, there's the designer net price. This is the trade price, the non stocking dealer price, the same price you would get if you tried to set up a trade account with a brand directly. And then we're also going to show you the brand's I'm out price. Real quickly, that just means internet minimum advertised price. That's the price that this brand is already showing this product. somewhere online, be it Pergo house, whatever it is the price that they will the lowest price, they will allow anyone to show their product and sell their product online. So we all know designers get shopped like crazy, they make suggestions and then their clients or whomever quickly goes online and tries to find it cheaper with this tool, they can't find it cheaper. if everybody's following I'm app, then they'll only be able to see it at the same imat price you're showing it song. And then Michele. Second step is you create collections, you can share these directly one on one with your client. For instance, if you want to show your favorite outdoor products, but then a collection, share it with your client, they can pick any of them and check out directly. You also can take that same outdoor collection, have it embedded on your website with an iframe tool that we have, you can put it in a mood board, which we offer, you can embed it in your blog put, you know, put it on social media, the possibilities are endless there. Then biggest difference when a client or anyone buys from these collections, we are sure they are checking out on your branded page on our system. And we're taking all these orders from 1000s of designers all over the country, we're placing them on the accounts that we've set up with these brands. We're the ones getting the brand's inventory feeds every day, we're the ones uploading all their products, keeping everything up to date. And then we essentially are the vendor of record with the brand. So what that means is a designer doesn't have to do a purchase order doesn't have to call and check stock doesn't have to deal with anything arrives damaged. That's all on us. And then once the product is delivered, we're directly depositing that full commission, which again, is the difference between the desire price and the brands, I'm at price into your account. And on average, it's around 30%. So there's a lot there. And it's a hard question to answer like what in SideDoor but in a nutshell, we're trying to help busy designers make more money with their tastes. Designers know these lines, they know products, they know how to put everything together. Historically, that's where the everything falls apart. Because now like someone says, I love that, where can I get it? Well, you can buy it directly from a brand if you're an end user and as a trade account. So designers are forced to either send the client to an ecommerce site or send them to a, you know, a real affiliate link, etc. And it's chump change, frankly, in return for these reward style type programs on average designers make 3% on generic products, what we're trying to do is change the game completely let them use the best products and most quality products from the best trade brands in the world. And actually get paid instead of 3%, they can now literally make 10 times that around 30% on average. Key timesaver with all this is logistics, which anyone in this industry knows is a nightmare. The nightmare has not gone away. It's just on our shoulders. And the reason we're able to tackle it is daughter tweet commercial design firm is 51 people in the back office there used to coordinating 1000s of pios for big hospitality jobs for seasons discovery land jobs. So we've got this people the systems and we're just applying that out for the residential designer that may or may not most likely not have the resources, the time the expertise to handle the back end efficiently. So feel like I'm rambling. Sorry, Michele. That's a long answer to a short question.
Michele 24:28
No, that's, yeah, no, that's good. So many good things so that they're going to sign up. Again, like you said, with their, you know, resale certificate, all the things to show that they're truly a designer. They are going to be able to see purchasing, they're going to see the designer net and I'm at I know that some may push back and say oh, well I normally get stuck in dealer. Yeah, you might but you also are paying somebody to go do all this extra work that you your team through the door is now doing so.
Chad Smith 24:59
If you do have stocking dealer and you want to order that way, that's go right ahead completely fine. Difference would be I doubt you have it with all 150 of the brands that we've got, then, great, you would still possibly want to use this because now you can at least show it quickly embedded on your website, or what happens when that customer messages in on a Instagram post that you did for an install? It says, Oh, I love that coffee table? Where can I get it? Well, even if you have a wholesale account, what are you going to tell them? With this, you can quickly send them a link that's branded with your firm's logo, etc. And they can check out and you're not going to have to handle any of the back office stuff.
Michele 25:42
Right? The other thing that I find interesting in this and I would be curious to see, I don't know that you touched on this, you did touch on the fact that the account is in the name of SideDoor with the vendors. And so the nice thing is that gives you all actually, you know how it is we're going to handle the bigger clients before we handle the smaller clients. And so what it does is it puts SideDoor in a position of being a large client with some of these vendors, because of the quantity that comes through. Which means that if something comes in damaged or broken, you're going to have a bigger voice than maybe one independent designer. Yeah, absolutely might have in that same situation.
Chad Smith 26:20
So let's talk about that real quick, because and we're not believe me, we're not the only ones who know this fact. But the reality is designers like the ones listening to this have tons of purchasing power. As it says it's around $77 billion a year in product that they specify for clients, big and small. However, the reality is, it's almost useless because there's it's so fragmented, there's no way for them to leverage that. And there's some buying groups that have popped up in the past. Heck, I even tried to start one. But the reality is these brands don't want to deal with buying groups, they're not going to redo their entire business model for a buying group. So what we've done is tried to use the best practices of the industry go to the brands. And this always leads to how do we make money, let me address that real quick. So what we're doing is going to all these brands, helping them digitize their master catalog of products, which is no small feat, I can assure you, helping them get online. And following all their best practices and centralizing orders for all these 10s of 1000s of designers, which frankly, they're not set up to deal with, they all want to cater to them, but they can cater to them. Right. And then So in a nutshell, we make the money between we're buying a stocking dealer, or wholesale at true wholesale price, we're placing the orders at that price, we make the spread between the wholesale and the designer net, or the stocking dealer and the non stocking dealer. And frankly, it's not nearly as much as we're paying out, but we're doing it because we think there's a bigger opportunity here. And with our margin, we're paying the credit card fees, we're dealing with all the withholding, we're coordinating all the free, we're doing all the back office work and enabling these brands away to help designers sell more of their product. That's the other side of the coin here, like all these brands want to sell more products. But because designers can't do it in an efficient way, they're forced to go on the parables, the houses of the world, that market directly to the designers client. And what the net result of that is, is what's happened over the last 10 years. The designer, the creator, the one who's initiating this sale is the one who is squeezed, who's the one who's getting cut out of all the profit on these products being forced, and they should be doing it anyway In my opinion, just to make money with their time, or wear a retainer, etc. But the days of being able to make money with trade products are few and that mean that it's frankly gotten harder and harder each month, as more and more of these brands have been forced to go direct. So we see this as a way to like, protect the design trade, frankly enable them with tools to be competitive online. And it's going to be a competition because they're up against, you know how spends over $100 million a month directly marketing by email and online ads and retargeting to designers and clients. No one can compete with that. But you still have to try and we're trying to give designers the tools that are going to need to compete in this new Academy.
Michele 29:47
Yeah, you know, it was interesting there was I won't call out names, but we'll say that there were two fabric brands that merged and they were well known fabric brands and had done really well. The challenge With their business kind of just tanking was because neither of them were digital. And they could not merge the two businesses together. And I know I had ordered from them, and they shipped me the same order of fabrics twice, at two big boxes. And then they ended up, you know, really getting in trouble. But it was because they weren't digital, they weren't updated. They each had separate practices, outdated business practices. And I think what is so awesome about SideDoor from my vantage point is a couple of things. I love the fact that it gives designers the ability to buy for maybe a broader range of product at design pricing, that then they would be able to buy from and carry the minimums. And even if they have, you know, a storefront, you can only carry so much. And, you know, as long as I do, that there are also limits that many of these brands place on designers that are fewer within so many miles of another designer who has stocking dealer, you can't have it. And you know what I mean, they're all these rules about protecting territories. But we're running into again, we're over here, tied by all these rules. Yet online is like the wild wild west of selling product. And so it's almost like you're going to the fight, but you don't get to take the weapon. And so that's exactly right. What I love is that SideDoor gives us know, as designers, it gives us the same weapon that these large guys have, right, which is the online digital space. But what's also cool is that it I believe that in this whole microcosm of design, this gives an opportunity for vendors, even smaller vendors, not just the large, big guys who have a little bit more money behind them. But it gives them the opportunity to get in front of some of these designers, it gives them an opportunity to sell their product, maybe they can't afford all the big space at some of the design, you know, spaces that we go to high point different markets, but they can get in front of because they can digitize absolutely not so much beauty chat on both sides from the design side, and from the others. And I mean, I am just that makes me happy.
Chad Smith 32:16
Yeah. That's the intention, Michele, and the smaller, more, you know, artists and all brand. That's the beauty. That's the cool stuff. You know, that's what designers want, they may not be able to do it on every job. But that's the signature piece that they can put out. And what we're trying to do is get that we're trying to get every we need to seed our tool with as much choice as possible, because designers demand it one they need access, which is what the internet provides. And they need transparency. So that small brand, yeah, how are they going to serve and reach 10s of 1000s of designers online, not by SEO, there's no chance that our they can hope that somebody stumbles by their booth in the north end of high point market. But the reality is, designers are searching and starting their search online, more and more of the transaction is going to happen online. But these brands, especially the larger, more legacy brands and industry have always viewed Well, this is a broad statement, but they in general just see all this as an expense. And I'm trying to explain to them, this is a necessary investment that you need to make right now. Because if you don't do it in five years, you're not going to be found.
Michele 33:40
That's right. That's right. You know, I think there's a point to be made here, as well. This isn't just about because some designers may be listening in and they're like, Listen, if some random person calls me and says, I want that same sofa, I'm not selling it to them, because of ABC and XYZ. And that's fine. But what I love about this version of it, I've SideDoor and you use the word, a curated collection. And that's what I think is important, because many times when people follow designers, they're following them because they like the way that they put things together. So it's not just the one off, it's the what, four things do you think go together well in a room, right? or How can I put these things together so that it looks like a style of somebody else. And you know, this may not be everybody's cup of tea to sell it just that way. And that's cool. You know, people may be using it in a way to sell just for their own design clients that they've done full design for it. So the nice thing is because it can be done with links, it can be done with pages, it can be done on a website. You can actually put this out as much as you want. But here's my here's my next big question for you, Chad. This is where my clients I mean and not even just my clients, I see it all over the internet. I see it in all of the Facebook groups, designers are being beat up like there is nobody's business. It's because like you said a minute ago, they're squeezed. And here's where the squeeze comes in. They're squeezed because they're selling product. And they can't get the product because of you know, it's on a slow boat somewhere, or it's dropped in the middle of an ocean somewhere, or it's in a container, and we can't bring it here or it's stuck in the back of a truck. I mean, we all know that kind of the nightmare of the logistics right? Now. My question is this, they are now getting call after call after call after call from their clients, Where is it? Where is it? Where is it, which means they now have to start get a staff member go back in and double check it? How does sigh door manage? where things are in the procurement process? Since you said that you all you order it, it's under your name? you're tracking it? How does that benefit the designer?
Chad Smith 35:53
Well, the short answer would be you log in to your SideDoor dashboard, and you see an update right there. To give that update, we our team is the one that has to do everything you just described, like we're a tech company, and we'd love to automate the heck out of it. But we're only as good as the info that these brands can give us. And frankly, most of them don't know either. So we're the ones that are having to call and pester the brand. And because we've got a little more leverage, and we're doing a lot of volume, we get quicker answers. But it doesn't mean that the problem has gone away is still as inefficient, as it always has been. difference would be your time, which is valuable. You don't have to spend doing a $15 an hour task.
Michele 36:43
That's what I want to hit on. Because, you know, we're even finding and this is the comment that keeps coming back, I can't even go charge my client for the amount of time that is taking us to follow up on these orders 100%. And they can't do it. Like you can't pay somebody enough and charge enough the clients not going to pay it. And so, you know, again,
Chad Smith 37:07
It's a huge problem, Michele, and I'd be crazy to try to oversell this and say we've got it all figured out. We have a process, we have people and we're working our process. However, the industry as a whole is dysfunctional as hell, Excuse My French. I mean, the reality is, it's not where it needs to be in terms of efficiency. It's as simple as a lot of these brands you call up and they can't even tell you what some costs. So we're trying to digitize and put all this in one place. But the other reality for the designers listening is I can assure you, your client doesn't care about this. They've been trained by Amazon to have a one click Checkout experience and have something show up for free the next day. Great. That's unfortunately, the expectation. And that's only going to get more and more entrenched. But the reality of our industry is that doesn't, it doesn't work. We're trying to bring it into this century, but it's not going to be like a seamless tomorrow experience. We're investing in the people the tools to make it simpler. But again, we're having the same problems, we're calling up, someone says it's in stock, and then gives us an inventory feed that we show it, it's being in stock, we placed the order and it's actually three months out. So we can't control that what we're trying to control is like being as transparent as possible, getting it all in one place. And then when things do sell, we get involved and make the customer experience as seamless as possible, because they want that information to and we're updating them when things change. So long answer but complicated problem. There's no simple easy button for logistics and home furnishings.
Michele 39:01
So let me say this as well. And but because this I think is super important, like I am the one that's always telling everybody what your gross profit margins need to be and all that right. However, when we have a gross profit margin, it is meant to be able to sustain the business of the company. And so I can handle a lower gross profit margin if I don't have an expense to go against it. Right. So in other words, when some people are looking at this and going we make 30% average, I think is what you said, you know, of course average. Oh my gosh, I can normally make 40% that's fine. But what is the expense that you have that goes against that 40% and at the end of the day, the person that you had to hire to manage all of that. Now tell me what you're making. And so I say that because of you know, maybe even more so because of where we are now. I would rather have a business model that makes a little bit less there but didn't doesn't have the headache and the chase and all That work behind the scenes that your team is doing, simply because that is a heck of a lot to manage on the day to day and the cost is exorbitant.
Chad Smith 40:09
Michele, you may or may not agree with this, I think you probably will. The reality is just because you can do something doesn't mean you should, is that the best use of your time, I seriously doubt it. But if you want to go right ahead, the difference would be with our tool, you log in, here's two prices, we show you clearly in a little pink bubble, here's what your profit is. If you don't want to do it, at that price at that profit, then you have another choice, you can purchase this from us on at the desire price, and then you can mark it up however you want. That's totally up to you. The technology we provide just allows you to show it show that product to your client in a way that they can quickly have a one click Checkout. Also, that same client can do an image search or take that product, look it up online, and they're gonna find it at the same amount price you're sharing it with, because that's the way Google works. So the danger is, yeah, you everybody wants to make 40, 50, 60%. But your clients more savvy than that. They don't want to be gouged. And a lot of them now with the way the internet works, the curtain has been pulled back, like the days of you know, being able to mark something up three or four times or frankly over unless it's custom. And very, you know, high touch and, and hard to hard to do. But this is what the internet does. It's only it only gets more efficient with time. So we're giving designers a choice you can buy from us and resell it, or pass your discount straight along whatever you want to do. But if you want to share it with your client, our deal with these vendors is we only allow these products to be shared at the brand, I'm out price, they have to protect their brand their pricing, for dozens of reasons.
Michele 42:04
Well, and we all would want that. That should be what we want is to protect pricing, because that protects everybody, right? So we would want that. I do think I want to just point out, you know, you've said it. So it's not like I'm saying something you haven't said. But I really want to point this out and make this just something to think about. designers can use SideDoor as an internal tool for their design firm without ever sending a link to anybody, which means that you all can really become kind of their procurement resource for many of these items, okay. Which also means because some people might go, I don't want to send out a link and then don't. So I think that's the beauty is there are three ways this can it at a minimum three ways this can be used, it can be used internally as a procurement resource tool for an existing firm that just wants to have help managing some of this, and not having to do it. All right, it meant and have access to, let's say some lines that maybe they currently don't have don't have the minimums for whatever that same design firm can use it to create curated collections that they can sell. Or they can actually just, you know, if they've created a design, they can send the links over and let these people by retail, take the money and they don't have to manage the project, installation and all of that. And it gives another way for them to be paid for their time and expertise, but also paid on product that they're selecting. So I mean, there's so many ways to make this a win. And to your point. And you're right many of the vendors do not like these buying collectives. They don't they don't like the way that things are set up. They don't they're not set up to handle it, perhaps not that they don't like them. I don't want to mean that, like, I don't like you. But it's like it doesn't fit their process. And so when there's also no way for them to protect their item out. Correct. Correct. And so with SideDoor, you all are coming in, and you're coming in on behalf of the vendor. And on behalf of the designer and on behalf of if you will, the consumer, and making sure that it's kind of this little microcosm that all works in a symbiotic right. So that one area is not doing better when it's killing another. And I think that is important. If we're looking not just for today, Chad, but we're looking at the long term viability of selling a product by designer from a vendor to a client and not making it that they're all shopping on top of them around them.
Chad Smith 44:41
100% Thank you for pointing that out. Michele, that's a great way to say it and what's underneath all that and what we're trying to be transparent about is we know believe me, I know more than anybody how many options designers have how many different ways they can run their businesses and how no two design business necessarily can be run the same. There are those some basic fundamentals. And the reality of our tool is it's, it's free for one thing. But secondly, our incentives are all a lot. Our incentives are aligned with the designer, we only frankly make any money when we give them a useful digital tool. That's why we're introducing moodboards, etc, we need designers to use this, or we're not ever going to make any money when people check out that's the only time we make any money is when someone buys something. So it for the vendors, they need this because they need to be able to cater to designers who are the only people out there that truly appreciate and understand the quality what it takes to come up with such a you know, designer product, but they've got a business to run. And they see the ridiculous numbers that Wayfair and house posed. And they will be going doing an end around given the choice, we're trying to give them another choice. This is how you can help designers help you as a vendor, which what they want to do is sell more of their unique products to designers. But more importantly, what they want to do is sell more. So without this channel, I don't see what a clear alternative is for them other than to go online and either white label their products or do it through direct to consumer sites in either of those cases is the designer that gets cut out.
Michele 46:32
Right. So Chad, if if somebody is listening, and they're like, you know, I think I want to give this a shot, tell tell them where they will go and what we can do to get them started.
Chad Smith 46:41
Yeah, fantastic. So just go into on SideDoor.com very simple, you'll just put in an email address, be sent a link where you can upload your resale certificate, once it's approved, you're good to go. And then you can use the tool however it works for your business, we've got a lot of support. Now we've got a lot of helpful tours and content that we're trying to provide. But ultimately, we want to be behind the scenes designers are thanks to people like you, Michele, realizing they've got to run their own business, they've got to grow their own brand. Not everyone else's, we just want to be a digital tool that helps them do that and helps them be more competitive.
Michele 47:27
That's so good. I'm so thankful for what you guys are building Chad, and I appreciate you coming on and explaining it. I'll have all that information as well in the show notes. But I really want to encourage those listening to give it a try. Just try it right, just give it a shot. And then think about it when you're looking at your strategic plan for your company. How could you use this? How can you bring your company to move forward with technology because that is the way things are going it's been going that way for a very long time. And again, this can be something that's used internally, it does not have to be an all or nothing meaning for those of you that might have stocking dealer on a couple of things, continue doing that. The things that you don't maybe this is a resource that you use. And again, that still going to impact your profit, because you're not having to pay somebody to go do all that that work. So totally something we're thinking about and checking out. And I just really want to encourage everybody to give it a shot. See which thing so Chad, again, thank you so much thank you to those that you work with behind the scenes running around, doing all of the checking on things and ordering order placement and all that we really appreciate just having something like this in the industry.
Chad Smith 48:41
Well, thank you, Michele. It's really an honor to be on your podcast. I'm grateful for the opportunity just to try to explain what we're doing.
Michele 48:49
Well, I appreciate it too. And I'll have it all in the show notes. All thanks so much, Chad. Thank you. Thanks Chad for sharing about SideDoor today. I could talk business like this all day long. And in fact, these types of conversations are normal for me and my coaching experience. My clients see such drastic and dramatic effects in their business from working through my business processes, that the results are almost too much to believe. Like this client who just emailed me that in 15 years of business she had never had financials like she does now. She has a full vault account, which means she has three months of all expenses and all salary saved. She has double what she needs in her tax account to cover the federal and state taxes. She has six figure sitting in a profit account before distribution. She has a robust operating account to cover any and all expenses. What's so interesting is when we started working together she was struggling with inadequate accounting and owed money to the IRS such a huge turnaround. If you want to know about more scenarios like this, check out the seven figure case study on my website. You can find it at ScarletThreadConsulting.com/7-figure-case-study and then consider applying for a discovery call, you can be my next success story if you're ready. Be intentional about creating profit in your firm, because profit doesn't happen by accident. Profit is a Choice is proud to be part of the designnetwork.org where you can discover more design maybe reaching creative listeners. Thanks for listening and stay creative and business minded.