Welcome to the Ecom Business Hacks Podcast (Formerly Facebook Ad Hacks) where I talk about how to get better results from your Facebook advertising and Email Marketing, and the many lessons I’ve learned from 20 years of starting and running ecommerce businesses, and from working with agency clients.
Rod Bland: Hi, everyone.
Welcome to the Ecom
business hacks podcast.
I'm your host Rod Bland,
and in this podcast, I talk
about how you can get better
results from your Instagram
and Facebook marketing,
from your email marketing,
and the many lessons that
I've learned from being
in the e-commerce business
for the last 20 years.
Enjoy today's episode.
My guest today is Nick
Savaidis, who's the founder
and director of Etiko, which
is known as Australia's
most ethical fashion brand.
So I've got Nick here today
to tell us about his story
of how Etiko got started and
what they're up to today.
Nick, thanks very much
for coming on the show.
Nick Savaidis: Thanks
for the opportunity to
share our story, Rod.
Yeah.
Rod Bland: All right.
It's been a while since we've
spoken and I'm interested,
there's a lot of things about
Etiko that I don't know, even
though we've done a bit of
work together in the past.
So I suppose the first
question is, how did you
come up with the idea for
Etiko in the first place?
Nick Savaidis: Yeah I've
been asked this a few
times and trying to think
what's the short answer,
but basically I've been
interested in ethical
fashion for quite a long
time because growing up In
Melbourne during the 1960s and
seventies, my mother used to
work in the fashion industry
when I was quite young.
And she used to make garments
in our lounge room for big
and small fashion brands and
was only paid a few cents
to make garments, which
was sold for a lot more
than what she was paid for.
And we struggled
financially as a family
when I was growing up.
And I couldn't work out why
my mum was paid so little.
And I remember going to
a shop in the city center
or when I was about 11
years old, and seeing some
clothing that my mother
had sewn being sold for, I
think it was close to $50.
Which now doesn't sound
that much, but in the
early 1970s it was
actually quite expensive.
And I remember my mum was
being paid about 15 cents,
15 to 30 cents per garment.
And my 11 year old mind
couldn't understand how the
capitalist system works that
workers like my mum were
being paid piece rates to
make garments which were
being sold for a lot more.
But what do you do
about as an 11 year old?
I was actually visiting
the shop with an older
cousin of mine, and when we
went back home and told my
mother, she just shrugged
her shoulders and, basically
that's the way the world,
the cookie crumbles, and
that's how the system works.
When I was older in high
school, I, started to hear
about the use of child
labor and sweatshop labor
in the fashion industry or
in the sports industries.
And that didn't really
resonate with me that well.
But what do you do about
as a high school student?
Once again, you can't
do much about it.
And but when I was at
university in the early 1980s
some of the major sports
brands were implicated in the
use of child labor and slave
labor and sweatshop labor.
So I used to go into shops
and ask them if they can
guarantee that the clothing
and the footwear and even
the sports gear they were
selling was free of child
labor or sweat shop labor.
And the reality is in the
early 1980s no one really
knew, no one really was
interested in how these things
were being supplied to us.
As a university student, there
wasn't much I could do about
it, so I just resorted to
wearing secondhand clothing
and secondhand footwear
for most of my
university studies.
Rod Bland: That's
how you took a stand.
Nick Savaidis: Yeah and
that's all I could do.
But then I graduated as
a high school teacher
and I used to talk to
kids about the impact
of globalization.
I'm trying to think what
year this would've been.
It would've been
the late 1980s.
Yeah.
And the kids were getting
really upset, especially
when I showed 'em photos
or videos of child labor
and sweatshop labor, but
then they'd still turn up
to school wearing the very
brands that were doing it.
Yeah, you can't
really blame the kids.
And during the 1980s,
teachers were perceived
or had self-perception as
being a bit left of center.
And I certainly would've fit
into that kind of category.
And we used to sit in the
staff room, this is teachers.
We used to sit in the staff
room talking about the evils
of the capitalist system.
But then when it came to time
to buying school uniforms
or buying sports gear
for the sports department
we wouldn't even think
about how the products we
were buying were sourced.
We'd always just buy
the cheapest one.
So we were just as
hypocritical as everyone else.
So in the eighties, I was
aware of the issues and I,
around that time, Save the
Children and Oxfam, started
putting out reports about the
level of exploitation in the
sports and fashion industries.
And the late 1980s, I moved
to the Northern Territory with
my young family to work as
an adult educator and I was
meant to be running literacy
numeracy programs on remote
indigenous communities.
But when I got there, it
was pretty obvious there was
no jobs in the communities.
So I was given permission
by my immediate supervisor
to start creating small
micro businesses on remote
indigenous communities.
And that way I realized
that business doesn't always
have to be a negative.
Business can actually
do something positive.
This day and age you
call what we were doing
social enterprise.
I'm not sure whether you've
heard, but it seems to
be flavor of the month.
Social enterprise is a big
thing at the moment, but in
the late 1980s, we'd never
heard of that expression.
But, I was involved in
setting up quite a few
social enterprises on remote
indigenous communities
and It was a pretty
exciting time for me.
It was probably the best
job I ever had, and we did
everything from setting up
a community laundromat to a
slaughterhouse, to a screen
printing business, even to a
video conferencing network.
So basically, yeah,
creating employment or
remote in communities and
providing better services.
And all the businesses
were actually owned by
the indigenous communities
that we were working on.
I did that for nearly six
years, and when I came back
to Melbourne, I tried to
find work in this social
enterprise space, but I
just wasn't successful.
And then I thought,
why not set up my own
business for good, my
own social enterprise?
I didn't lose my concern
about how products were
being sourced and I thought
there must be a market out
there for products which were
genuinely, ethically made.
And at the time I
also was interested in
environmental sustainability.
I thought there must be a
market for something ethically
made and eco-friendly as well.
And I picked up the
distribution rights for a
brand called No Sweat, which
was the world's first ethical
fashion brand or ethically
focused fashion brand.
And I was the
Australian distributor.
This was around 2003.
And it was actually founded
by a group of activists
from North America.
They're all kinda labor
rights activists and
who were concerned about
sweatshop labor and slave
labor and we did quite well.
This is in the really
early days of the internet.
I sold thousands of sneakers.
I didn't actually have an
online shop as such, but
we had a website and people
could just sent us emails
with what they wanted, and
I can't remember how we used
to take payments, but we set
it up so you can actually
download the order form,
print it out, and then send
it back to us with the money.
But it was a one
person operation.
I was just doing it from
the back of my garage, but
we sold about 13,000 pairs
of sneakers over a two,
three year period of time.
And I did that for,
so this is between.
I'm trying to think.
It was about 2003.
Yeah, up to about 2006
I was distributing
the no sweat brand.
And around that time I
thought why not create
my own brand rather than
sell someone else's brand.
Why not create my own brand.
And as much as I love and
respected the guys behind
No Sweat they were really
good union activists.
They weren't really
good marketers, or
even business people.
I was finding that I was
having to develop my own
marketing materials, so
I thought why not do the
whole thing just myself.
And I started with Etiko
Sports Balls because around
that time, the Fair Trade
System was introduced
into Australia and at the
time when Fair Trade was
introduced in Australia, the
only products that you could
buy, which were Fair Trade
Certified, was basically
coffee and chocolate.
Actually, it was coffee and
tea and I wasn't interested
in either of them, but I was
interested in sports gear.
So Etiko was the first
non-food company to be
certified Fair Trade.
So that was around 2006
and then I just gradually
started building up the brand.
So in 2007, I introduced
Etiko sneakers.
In 2008 I introduced Etiko
clothing, and now we've
got the biggest range of
genuinely ethically made,
genuinely eco-friendly
clothing and footwear.
Our products are both
ethically made and
eco-friendly, but the reality
is the priority for me has
always been the ethical part.
Making sure that workers in
supply chains are working
in safe conditions, that
there is no child labor,
that the workers are
getting paid living wages.
It may not sound like a big
thing, but in this day and
age, it's amazing how few
brands in Australia, can
actually prove that they
pay workers in overseas
supply chains a living wage.
I'll go on more about
that, but you mentioned
when you introduced that
Etiko was Australia's most
ethical fashion brand.
I'm not sure whether you're
aware of it, but about
three weeks ago at the
national online retailers
sustainability awards.
Yes.
We actually were awarded
the Best All Round
Sustainable Retailer award.
Rod Bland: I did
hear about that.
Congratulations.
Nick Savaidis: Yeah.
And they gave it to
us, not just because we
are trying to keep our
environmental footprint
to an absolute minimum.
But they gave us primarily
cuz we showed that looking
after your fellow human beings
was also a high priority.
And yeah, so pretty proud
of the fact that it's this
small three person, Brunswick
based brand, was able to gain
that award over much larger
organizations with a
lot more resources.
Rod Bland: That's taken
us from the early 1980s
all the way to 2007.
So
one of the first questions I
have is after you had the No
Sweat brand, so that was 2003,
and then when you started
with this Etiko Sports Balls,
how did you go about finding
a manufacturer that fit your
criteria for those products?
Nick Savaidis: It was a bit of
a challenge in the early days.
And basically we had to
find factories that had
the capacity and the
skills to actually produce
the kind of quality
products that we needed.
In the 1960s, seventies
and eighties the center
of Sports Ball production
was actually a town in
Pakistan called Sialkot.
And basically every
big sports brand was
sourcing balls from there.
But in the eighties, yeah, a
lot of that production moved
to China and we found one
particular factory and we,
as in myself and one other
company that's based in the
UK, we together we actually
approached this sports ball
producer who was losing
more and more business to
the Chinese manufacturers.
And we told them that we
would buy from them if
they were prepared to go
down the path of becoming
Fair Trade certified.
And that's not an easy thing
to do because they had to
allow outside inspectors
to visit their premises.
They had to allow unions
to operate within their
factory, and they had to
also work towards paying
workers living wages.
All things that weren't
anathema, but it wasn't
something they were
totally committed to.
But they saw as a business
opportunity so they could
do something that Chinese
manufacturers couldn't do.
Rod Bland: And do you
still use that same
manufacturer today?
Nick Savaidis: Yeah,
we haven't changed.
One reason why we could
get good rankings in
ethical supply chains is
that we've been committed
to working with the same
suppliers for many years.
We don't play one
supplier off another.
Even though it is been
challenging sometimes, cuz
you know, sometimes they
haven't done the right thing
or they've made mistakes,
which cost us dearly.
But, they do make amends
and we kind of stick with
them and, yeah we will stick
with them for quite long.
I mean I can't see at the
moment, there's no reason
to move from them and,
we started off buying
sports balls from them.
But then they started making
footwear for us as well.
So we convinced them
to go down the path
of making footwear.
Yeah.
So our sports balls and
our footwear come from the
one factory in in Pakistan.
Yeah.
Rod Bland: Interesting.
I've actually, I think
I've got a pair of those
sneakers when you had a
sale on there, cuz I've
got a pretty large foot.
And you had some I think there
was some size twelves that
were like half the price.
So I grabbed some and that
was probably 18 months ago.
I wear 'em all the time
still and I like 'em
cuz they're just flat.
I like shoes that you
can feel the earth.
Nick Savaidis: A lot of
people who work out in
gyms like wearing 'em
because of that reason.
They are the Converse
style sneaker, which
are popular with people
who work out in gyms.
Yeah.
Rod Bland: Yeah.
And they don't even
look like they're gonna
fall apart anytime soon.
They remind me of a pair of
I've got a pair of Sperry,
I don't know whether Sperry
is an ethical brand by
the way, but Sperry boat
shoes, and I've had them
for 15 years and I'm still
not able to wear 'em out.
They were very expensive
at the time, but they're
still, the way that they're
made, at the very least
is they're very well made.
So that's what
they remind me of.
Nick Savaidis: The longest
we've had anyone tell us that
the sneakers have lasted for
is about eight years so far.
We get quite a few people
telling us they get about
five years use of it.
It really gets, it gets
down to how long how hard
you are and wearing 'em.
And they're not designed for
walking, doing bush walking.
Yeah, they're just nice to
wear as you're walking down
Sydney Road and looking cool.
Rod Bland: So how did
you progress from the,
so the sports balls and
then the sneakers was 2007
footwear and and then I
guess the other clothing
items came after that.
How did that come about?
Nick Savaidis: Yeah.
The clothing comes from
in a different company.
Around the time I heard
that this is in the about
2006, 2007, a group of
farmers in India called
the Chetna Organic Farmer
Cooperative was set up.
I'm not sure whether
you've heard about the
high suicide rate amongst
Indian cotton growers, but
during the 1990s and early
2000's, it was astronomical.
I remember watching, do you
remember on Channel nine there
used to be the Sunday program?
It was a current
affair program.
I think it stopped in
the early two thousands,
but I remember watching
a segment, it was like
foreign correspondent
but on Sunday mornings.
But they did a story about
the high suicide rate amongst
Indian cotton growers and a
Dutch NGO called Solidarity
had set up a project where
they were trying to encourage
cotton growers in India
to move to cotton growing.
Long story short Monsanto
had gone into the India
during the late 1990s and
early two thousands and
encouraged cotton growers
to move to GM Cotton Seed.
Rod Bland: Oh, a GM as
in genetically modified.
Nick Savaidis: Cotton seed.
Yeah.
And it was quite expensive.
And you also had to buy
specific herbicides, or was
it herbicides or pesticides?
We got, but you had to
buy specific chemicals to
go with that genetically
modified cotton seed.
And a lot of Indian cotton
farmers didn't have the kind
of money that was required,
so they had to borrow money
and it's hard for Indian
farmers to borrow money.
It's hard for them to go into
a bank and just borrow money.
And so what a lot of
them did they went to
their local loan sharks.
This is pretty
common in India.
Yeah.
Went to the local loan
sharks so had to pay
astronomical interest rates.
I remember at one stage
hearing they were paying
12% interest per month,
not per year, but some
astronomical amount..
Anyway, a lot of them got
into financial trouble because
there was a glut of cotton.
Solidarity, set up the Chetna
Organic Pharma Cooperative.
And I remember visiting India
around 2007 and I met members
of the cooperative quite early
when there were about 300
farmers in the cooperative.
And yeah they started growing
cotton using organic cotton
growing methods, which
was a lot less expensive
than using GM cotton seed.
And they were keen
on getting a higher
price for their cotton.
They were getting a higher
price for their cotton
because it was organic.
And there's a premium to
be paid for organic cotton.
They actually have
become quite successful.
The cooperative now is made
up by about 7,000 farmers,
Rod Bland: Wow.
Nick Savaidis: and with
a lot of their profits,
sorry, some of their
profits, they've actually
invested in the factory
that makes our garments.
So they're not just making
money from selling the
raw materials, they're
also making money from
the final product as well.
And they've also divested
into other crops as well, so
they're not just relying on
cotton for their livelihoods.
And yeah, when I heard
about these cotton growers,
I reached out to them and
they told me about their
factory as well, and then I
thought, okay, I was selling
ethically made sports gear
and sneakers, why not sell
t-shirts and hoodies as well.
I saw Etiko as being a
street fashion brand for
people who cared about
their fellow human beings.
So when you think of
street fashion, you
think of sneakers,
you think of t-shirts,
you think of hoodies.
And yeah, we just
kept on expanding it.
We've introduced underwear
a while ago and trying to
think what our latest thing,
I suppose our latest is just
expanding our footwear range.
But yeah, I'm not aware of
any other ethical or eco
brand which has got as wide
range of products as we have.
Maybe I shouldn't be doing
it, I can see us expanding
into other products.
We get asked by consumers
to introduce other products
and we're being hassled to
introduce organic tracksuit
pants and even organic
fair trade jeans as well.
So I think it's possible.
It's just a matter of trying
to raise the capital to do it.
Yeah.
Rod Bland: There aren't
other choices for people.
I guess that's like the, if
somebody wanted to go and buy
fair trade or ethically made
and sourced jeans, for example
Nick Savaidis: really got, you
got two brands in Australia
Nudie and Outland Denim,
and both of them selling
their jeans for around $300.
$300 a pair.
What I've been trying to
do with Etiko is keep our
prices not cheap, but we
try to keep 'em affordable.
So our sneakers, which look
remarkably similar to that
well-known sneaker brand
that I mentioned before.
Rod Bland: with the C?
Yeah,
Nick Savaidis: yeah.
We basically sell 'em at
the same price as that they
do, even though they cost
us about 200% more to make.
And, our underwear
is basically the
same price as bonds.
Our rubber thongs
are the same price.
Actually, they're less
expensive than Haviana's.
The only other brand
who's doing ethical
clothing at the level
that we are is Patagonia.
I'm not talking about volume,
I'm just talking about
applying sustainability and
social impact is Patagonia
and you're paying about 20,
30% more for Patagonia's
brand than you are for ours.
Yeah at Etiko we're trying
to make being ethical,
being eco-friendly,
affordable, rather than
a middle class luxury.
And the only way I've
been able to do that is by
just keeping my overheads
as low as possible.
Rod Bland: Perhaps a question
for those who are in a
situation similar to where
you were in 2006 when you
started with the Sports Balls.
Somebody who's been selling
someone else's brand like you
were for No Sweat brand, and
they're going, okay, now we
wanna find a manufacturer.
But they've got some
conditions in mind and they
wanna actually do good for
the world, rather than just
find a place that's gonna
sell it cheaply so they can
make the best possible profit.
What would you suggest
that people do to,
start that journey?
Nick Savaidis: I didn't
have a lot of resources,
so I couldn't send out
a team around the world,
investigating factories.
But I was a member of
the Fair Trade system in
Australia, F.L.O., the Fair
Trade Labor Organization.
So we were able to
rely on their advice.
They would actually tell us
which factories had applied to
become Fair Trade Certified.
And, if we found a factory
that we thought was okay, then
we would actually link 'em up
to Fair Trade International
and the Fair Trade Labor
Organization worked with
them to become accredited.
Since then, there's other
labels that have popped up.
There's Fair Wear.
There's the Worldwide
Responsible Apparel
Program and there's B Corp.
I'm not sure whether you're
familiar with B Corp, but
Rod Bland: before.
Yeah.
Yeah.
Nick Savaidis: Yeah, I mean,
so I'd probably suggest
reaching out to them.
And asking them, which
factories do they work with,
could they please
introduce us?
Yeah.
It's easier now than it was
years ago and amazingly,
when I started, it was
actually a lot harder to
find stuff online, but now
it's quite easy as well.
The only problem you've
got, what we find now,
there's a lot of green
washing and there's even
ethical washing going on.
If anyone's actually telling
you that they can supply you
ethical clothing or ethical
footwear, you've gotta ask
'em to provide the evidence.
And I know with the Fair Trade
System, it's actually hard to
get Fair Trade accreditation.
It's even harder to keep it.
So I'm pretty confident
if a factory's got Fair
Trade Label Organization
accreditation, they are
doing the right thing.
And even B Corp accreditation.
Some of the other
ones I'd be cautious.
Rod Bland: And what's
been the biggest challenge
for you to stick to
your original mission.
Nick Savaidis: There's
been a few, there's
been a few challenges.
I'm trying to think.
Okay.
The first challenge was
not realizing that, during
research people say one thing,
but as consumers do another.
So if you ask most of your
friends, do they oppose the
use of child labor, sweat
shop, and slave labor, they're
all gonna say, yes, they do.
The question is, what do they
do when they go shopping?
Yeah.
So I didn't realize that.
I'd see all this research
about this growing trend
for ethical consumerism.
And that research is
coming out all the time.
Every month there's some
research paper shows that
Australians are becoming
more conscious or ethical
or green in their shopping.
But the reality is that
it's nowhere near as big
as everyone thinks it is.
And it's not just individuals,
it's also organizations.
Yeah.
Between what people and
organizations say and
what they actually do.
So over the years, there's
been quite a few other
brands pop up in this eco
ethical fashion space and
they've all folded and
these are businesses set up
by people with a lot more
resources and a lot more
ability than I ever had.
And they've just
come and gone.
And I think that's because
they really believed
all that research.
I've always run a pretty
lean business model, so I've
managed to kinda survive
during the hard times.
So yeah, don't believe all
the research that's out there.
Yeah.
I think you gotta take
it with a grain of salt.
Other stuff.
I've always been
under-resourced.
As an ex-teacher, I didn't
have much funds to start
with and I've had to invest
a lot of money into building
up our stock, our inventory,
but also a large part of
what I was doing in the early
days was educating consumers
not just individuals, but
also organizations, and
that took up a lot of energy
and a lot of resources
that I never really had.
Looking back on it, I would've
tried to raise equity.
Raising money from
investors at a much
earlier kind of stage.
I'm only really getting
around to it now cause I
keep on putting it off.
But if I knew then
what I know now, yeah.
I would've gone to
investors much earlier.
And I look at brands like
Outland Denim who are doing
amazing work and they're
really the only other brand in
Australia who we look up to.
And but they've raised a
lot of money from private
investors before they
even launched their brand.
Yeah, I think bootstrapping
though there is some
positives it's also the
harder path to take.
Yeah.
There's another
lesson I learned.
Yeah.
Rod Bland: So you're in
the process of looking
and finding investors.
Now, do you, have you
got any advice for anyone
that sort of might be in
a similar situation, some
things that you've learned
already in that process?
Nick Savaidis: I'd be doing
it as early as possible
and document everything
from the early days.
I still need to get
around to doing an updated
business plan and an updated
strategic growth plan and
an updated financial plan.
This is all stuff though I
should have had years ago.
So if you can do while
you're still small, it's
a lot easier than when
you become a lot bigger.
I wish I'd known
that back then.
Yeah.
Rod Bland: So you have
a physical store and
also the website too.
Nick Savaidis: We've got a
physical store where, we've
got our B2C channel, so that's
through our physical store and
also through our online shop,
but we also have a B2B
business where, about
50% of our business is
actually producing products
for other organizations.
And yeah, that also takes
up a lot of resources,
a lot of my time, but it
helps us with cashflow.
During the past six
months, some of our biggest
customers have been Monash
University, RMIT, the
Australian Greens, KPMG.
A lot of organizations
come to us because they
need help sourcing brand
merchandise, which is
genuinely ethically made
and genuinely eco-friendly.
But in the reality is I
should be just focusing on the
online space and that's, in
the long term, that's what I
wanna do is just focus online.
Even now with brick and
mortar, we were actually
doing quite well with our
brick and mortar store up
until about January this year.
The shop's been open for
about two years, and but
just over the past three or
four months really noticed
things have actually slowed
down with the door sales.
The online sales probably
dropped by about 5%, but
they're coming back now.
It's hard.
You can only learn by
experience, but yeah, I
would've maybe just focus
on the one part rather
than try to do too many
things, but I needed to
do that for cashflow.
Rod Bland: So you've got
a lot of stock to manage
and I've been in situations
where there's been a lot
of stock to manage and one
of the hardest things I've
found was having stock that
devalues quite quickly in
the computer memory business.
So you have to make sure
that you aren't holding any
old stock and that you are
rotating it efficiently.
Nick Savaidis: Yeah,
I suppose we are lucky
in that degree because,
sneakers are sneakers.
They don't really
deteriorate and they
don't go out of style.
I mean, It's a
classic sneaker.
People have been buying
that sneaker of ours.
yeah, since 2007.
So it's not that we've got
that stock that's sold,
but yeah, I suppose one
mistake I probably did
was I actually expanded to
too many different lines.
I introduced round
neck T-shirts.
Then I introduced
V-neck T-shirts.
Then I introduced long
sleeve t-shirts, and then I
introduced singlets as well.
I think that was
a bit too much?
I don't think my
wife's gonna hear this,
but she was telling me
quite early that I should
just focus on footwear
and yeah, on reflection,
I think she was right.
I should have just
focused on that part.
But what I find with Etiko
is that people aren't
buying our products because
it's a shoe or a t-shirt.
They're buying into the brand
ethos, our brand values.
And so we do get people
buying sneakers, buying
t-shirts, buying hoodies,
buying underwear.
They're buying into
the whole brand.
But, if you were talking
about what would've been
easy as far as running a
business then I thinking
having a smaller range
would've been a lot easier.
I'm actually even thinking
about starting to cull
some lines as well,
and just to focus more
on just a few lines.
The ones that generate the
most income for us as well.
But then you get customers
saying, oh, can you do this?
Can you do that?
Yeah.
We introduced, so a couple
of years ago and now socks
are one of our best sellers.
Rod Bland: Yeah.
I think you win some,
you lose some, don't you.
You get customer feedback
and you iterate and you
try it out, and some things
work well and some don't.
And the hard part for I think
for a business owner is to
take those things that you
did try, that you thought
were really gonna work well,
but didn't once you've tested
them, is to then back it out.
Nick Savaidis: The other thing
is, I also learned is that
it's one thing to actually
have the products, but the
other thing is actually
to market those products.
Yeah, I know our singlet's
actually quite good products.
But we've never really
marketed them as such.
We've never done any PR or
kind of any work with any
influencers or done any kind
of fashion shoots or Yeah.
Rod Bland: Yep.
Nick Savaidis: But I suppose
I've got a version of ADHD.
I get bored quite easily, so I
want to do different products.
And even now I'm looking
at expanding our footwear
into vegan leather.
So I'm not sure whether you
know much about the vegan
leather market, it's quite
substantial, not just in
Australia but internationally,
but most of the vegan leather
products sold in Australia
are made from plastic.
So I've been wanting to
do an eco-friendly vegan
leather for many years,
but it's only just now that
a genuinely eco-friendly
version of vegan leather
is coming to the market.
The problem is it's not cheap.
So I'm not sure whether
I should just go down the
path now and just sell
it at a premium price or
should I wait until the
price has come down a bit.
I know there is a market
there and I'm finding it
hard not to jump into it.
Rod Bland: Was it because it's
gotta be made from recycled
bottles and the technology had
to catch up to make something
that really was like a leather
product, but obviously not.
Is that why you had to wait?
Nick Savaidis: Yeah, basically
we had to find material
which was compostable
and and therefore had to
be plant-based as well.
And about five, six years
ago, some companies introduced
pineapple leather and then
someone introduced an apple
leather, and then someone else
introduced a cactus leather.
But they was still only
about 30 to 35% plant based.
The rest of it, the material
was still polyurethane, so
you couldn't compost it.
It was still largely plastic.
The past year there have
been some companies, one
of them, which Andrew
Forrester's just put a lot of
money into, so he obviously
sees a lot of potential.
Andrew Forrester, the
mining magnet, he also
the owner of RM Williams.
So yeah, I can see RM
Williams going down this
path pretty soon as well.
We've made samples.
We are ready to roll.
It just question is whether
we should do it when we have
to retail the shoes around
$300 a pair, which we're gonna
have to do if we sell 'em now.
Rod Bland: I suppose it's a
catch 22 and there's gotta
be sufficient volume there
for the manufacturing cost
to come down so that then the
retail price can come down
And at some point, somebody,
somewhere has gotta start
selling them because otherwise
nothing's gonna happen.
Nick Savaidis: And I'm
worried that if I don't
do it now, someone else.
Rod Bland: Yeah,
Nick Savaidis: gonna,
a lot more resource is
gonna come along and be
the first in Australia.
So I've just talked
myself into doing it.
Yeah.
Now I've just gotta
find the capital.
Now I've just gotta find the
a hundred thousand dollars,
which I think is gonna cost
me to get it onto the market.
Yeah.
Rod Bland: Wow.
Yeah.
Nick Savaidis: About between
70 and a hundred thousand.
Yes.
I think it'll cost
me to actually do it.
Rod Bland: Golly.
So looking back over the
years, since 2003, as far
as your marketing goes,
what do you feel was
your best bang for buck
with the different things
you've done over the years?
Nick Savaidis: I
dunno, I suppose
building our community.
We've got about 27,000
people who subscribe
to our newsletter.
The reality is only about
11,000 of 'em are active.
But I built up that database
by going to festivals and
doing presentations and
getting the people to sign up.
We don't have a lot
of people dropping
out of the newsletter.
It's a pretty miniscule amount
of people who unsubscribe.
But that's been a pretty
good investment as far as
the return on investment.
Other stuff is networking.
Maybe it's an advantage of
being first on the market.
But because I've done a
few presentations and been
around for a while, we've
been featured in quite a few
high school and university
textbooks and still are.
And these are national
textbooks as well.
I know at the beginning
of every year we're gonna
have quite a few young
people looking at our
website, largely because
of these textbooks.
But how do you put a value
on something like that?
Rod Bland: A pretty
good piece of evergreen
marketing though, isn't it?
Textbooks stay around,
they get recycled.
Nick Savaidis: Yeah, they
use that as a case study.
We are featured in the high
school design and technology
textbook as a case study
on sustainable design.
We are featured as a social
enterprise in the high school
business studies textbook.
I have been featuring quite
a few university textbooks,
marketing textbooks in case
studies on guerrilla marketing
or ethical marketing.
Yeah.
Yeah, so they've all
been a good investment.
I also made quite a few
postcards that over the
years that I've given out
at different events with a
discount code and we continue
to give them out in our
shop, our side of our shop
at festivals or when I do
presentations and they've
been good value for money.
Rod Bland: Yep.
Nick Savaidis: We've done
Facebook advertising and
Google ads and in the early
days, in the good old days,
and if I knew then what I
know now, I would've put a lot
more money into Facebook ads.
But I can remember doing
eight, ten times plus
returns on spend for some
of the Facebook advertising
we were doing years ago.
But yeah, building your
own kind of community
your own kind of fan base.
So we've got lots of
people who've been buying
our products for many
years and they've been
our best ambassadors cuz
they spread the word.
And it's not just the B2C
business that's brought to us.
A lot of those individual
fans that we've got have
also encouraged their
workplaces to source from us.
I'd yeah.
Encourage people to
actually trying to build
up their own community
of advocates or fans.
Yeah.
Or passionate fans.
We've built a brand that
stands for something
And that's, we stand for
something that a lot of other
people believe in as well.
It's not just a fashion brand.
Rod Bland: So there's some
good advice there for people
who are starting out as well.
So do you have any other
perhaps a final piece of
advice for someone who's
thinking about starting
a business fresh and they
want to have the ethical
and sustainable aspects of
manufacturing to be part
of their business too.
Have you got any advice
for somebody who might
be just starting out?
Nick Savaidis: I think it's
a lot easier for someone
who's starting out to go
down this path than there
is for an established
business who will need to
change the way they operate.
So if you could start afresh
from the very beginning.
Find your suppliers
but make sure they
have got accreditations
that are credible.
The other thing I'd
encourage people to do is
to build a team of people
around them rather than
just relying on yourself.
Cuz as you grow, it's
actually really hard to
do everything on your own.
And over the years I've had
some good people working
with me but I wasn't able
to retain them because I've
never been in a position to
be able to pay them the rates
they deserved or wanted.
On reflection I should
have worked out other ways
of retaining good staff.
What else?
Yeah, the other thing I
mentioned to you before
is, I'd encourage people
to go down this eco ethical
path, but don't believe that
all the hype that there's
a huge market out there.
Do it cuz it's in
line with your values.
Yeah.
Rod Bland: Yep.
Nick Savaidis: And the other
thing is also you can't rely
on this whole eco ethical
aspect to generate business.
You've gotta give
people some other reason
to buy your product.
Years ago I remember coming
across a book called The
Myth of the Ethical Consumer.
The author's name was a
guy called Tim Deviney.
And I met him at a marketing
conference, where I was
asked to give a talk
on guerrilla marketing.
And he did a
presentation on his book.
And I was pretty depressed
after sitting through his
presentation because he
basically explained the gap
between what people say during
the research and what they
actually do as consumers.
And I said, look, based on
what you've just told me,
I might as well give up
and go back to high school
teaching because, I can't
afford to risk my family's
future on some dodgy research.
And he said no.
What you gotta do is you
gotta give people some other
reasons to buy your product.
So you've gotta make
them affordable, which
is different from cheap.
So you might have to
charge a bit more, but
don't charge a lot more.
You've gotta make
it accessible.
You've gotta make it easy for
people to buy your products.
And in the early days, if
it wasn't for the internet,
if it wasn't for online
sales, I would've been
in trouble years ago.
Cuz we struggled to
find any new retailers
to stock our products.
So the online marketplace is
where we've been operating
for quite a few years.
So you've gotta
make it affordable.
You've gotta make
it accessible.
You've gotta make it good
quality because they might
buy it once, but if it's
crap quality, they're
not gonna come back.
And it's much cheaper to get
a repeat customer than it
is to find a new customer.
And then finally you
gotta make it cool, you
gotta make it appealing.
So that's one thing I've
been trying to do with
the Etiko brand for quite
a while, is actually to
make it a cool brand.
I think we've still got a long
way to go in making it a cool
brand, but I look at some of
the other brands that have
come and gone and we get a
lot of positive feedback about
the appearance of the brand.
Yeah.
Rod Bland: So Nick, if
people have questions and
they want to get in touch
with you what's the best
way for them to do that?
Nick Savaidis: You'll
find me on LinkedIn so
you know more than welcome
to reach out to me.
But we've got our
website www.etiko.com.au.
And we're on Facebook
and on Instagram as well.
So feel free to
message me either way.
And finally, if you're ever
in Brunswick on Sydney Road,
Brunswick, we're at 536 Sydney
Road, Brunswick, so you're
more than welcome to drop in.
Rod Bland: Nick, your time
today is most appreciated.
Thank you very much for
coming on the show and
being my guest today.
Nick Savaidis: Thanks
for the opportunity
to share our story.
Rod Bland: Thank you so much
for watching or listening.
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