How Shipit CEO Allan Guiloff grew Shipit to $2.2M revenue and 800 customers in 2024.

guys there you have it ship it and a process in 2021 over 13 million dollars in volume from e-commerce sellers by helping them say okay where do you want to send that package of shoes we'll pick the carrier we'll send it their take rate was 25 well back then it was 18 per 17 18 today in 2023 because of macroeconomic conditions in Chile retailers you know higher interest rates less retail sales Etc they'll do about 6 million in gmv he did the hard work last year of downsizing from 110 employees to 25 they were burning 200k last year this year on track to profit 500k be able to make 1.3 million in terms of take rate on 6 million gmv hoping to just buy additional time here as they continued to scale 800 customers today because he lost 200 when he increased prices but that's extra margin to the bottom money he's bought himself more sustainability more longevity we'll see what happens next hey folks my guest today is Alan gieloff he's a commercial engineer from the University of Chile experienced in business incubation and a passionate entrepreneur and sports Enthusiast he co-founded ship it a successful business that achieved achieved over 12 million in annual revenue with a team of 110 folks operating in two markets uh focused on Tech logistics for e-commerce Allen you ready to take us to the top let's do it let's rock all right all right give me a customer story here name someone that's using you and how they're using you today all right so let's see today we have a customer which is called Semoran which is women's shoes and they have their stores set up in I don't I think it's woocommerce shop and they easily integrate with that platform like ourselves ship it to import their sales and will automatically choose the best current company to fulfill their Logistics needs either is it same day delivery next day or delivery for next week and after that we're gonna have two uh situations we are going to either send the carry company to the cup or for smaller companies we we ourselves we have a small operation we call them Heroes where we pick up the heroes the heroes yeah they go to our crosstalks and then the carrier company goes to our Cross Dock and pick up picks up there interesting how so I guess how much of how much have you hired internally for this versus or external contractors how many heroes are full-time on the team uh at the time being I'd say like 14 it's it's like a scalable we've tried to focus on a very scalable scalable operation so at the at the beginning there were like full-time employees for us but then we had them change to a like company contractors right yeah yeah yeah I guess why did you make that decision just you want to decrease your burn uh no it's it's I mean Chilean laws and actually like South American laws are very like employer hey sorry employee uh focused so it's actually very very hard to to have them in your in your in your payroll like it's gonna be expensive uh and it's and they also they also prefer to be as contractors so yep we've had like the freight forward CEO on freight web CEO on there they're connecting sort of shippers sorry you know e-commerce producers in Mass with sort of carriers you're you're really doing this on at a brand level more more detailed level would you would you agree with that statement or no uh what do you mean at the brand low yeah so you just gave the customer example what's a very specific brand right you mentioned I think a shoe company right and you're helping them I think find Space on whether it's trucks ships planes to ship their e-commerce Goods is that right or no no actually uh we are responsible from the beginning to the end of what happens to that parser to that package so we are going to choose which carrier company is the best according to the customers uh specifications so the customer might say on on the on the platform like give me my best alternative in the shortest times and we're going to choose and we're going to be responsible so actually we're going to connect those 12 million uh in Revenue we're going to collect the full parcel price have our profit and then pay to the carrier company so we actually have like a 25 gross profit and actually I called it GMB and then profit because it's a take rate of 25 yeah so just to write that that's very helpful thank you just to be clear the brand you work with never actually picks their carrier you just have your own internal Network and you're picking where to put that parcel of socks or shoes or whatever exactly yeah and I'm responsible of a negotiating contracts with carry companies so if they don't deliver in three days um they're gonna charge me for free and maybe I have a different SLA with the customer like fifth day it's gonna be for free oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot 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withdrawals of the Pension funds there was massive uh uh inflation with this inflation came along like uh interest rates are surging interest rates retailers so I decreasing their sales and my sales depend on the retail sales so basically a lot of retails went out of business a lot of them decreased their sales by half and many of them had to cut costs and like go and negotiate directly to their car company so uh this year to be just through a completely honestly this year we're gonna sell probably the same 6 million we did last year so well let's talk more about that in a second but I want to break down the margin profile here for a second so you did 6 million 2022 last year you're saying of the 6 million 25 of that is your take rate or your bottom bottom line no ticket okay yeah and let's use this year as an example for so we're gonna sell probably the same six million we have a take rate of 25 so that's going to be around 1.3 right yep and probably as an ebitda like bottom line like you say it's going to be like 500 thousand and look it's impressive that you're PR in this market it's impressive that you're profit or you're planning to generate profits I I it's it's a it's a long story Nathan because I mean we we're a team of 110. we had operations in Chile and Mexico but last year we were raising funds we had a term sheet signed with two VCS and they withdrew the term what was what were the terms how much were you raising and what valuation we were raising 10 million at the 13 pre-money evaluation and out of those 10 million five were for like uh working capital and five were four um to purchase a Mexican company wow but you were selling 40 of the company basically right I know I know and and I had a huge problem because my investors were like were our premium evaluation is too low and I was like I've been for the past six months trying to raise money this is the only attemption we have are we gonna is it or not and it took me like four months to like actually convince my investors to take it and once we once I get to that point like the Chilean economy had sunk and uh BCS withdrew the offer and but that by that moment we had accumulated a lot of debts like I I didn't realize I think I probably made a mistake there at the time being I'd say like we have a two million dollar debt yeah uh so it's a bank or what was the debt from the same suppliers like my car companies were my my loners so I have some Bank some suppliers and although a reasonable debt is going to be like one to two ebitda uh which is like because I pay in 60 days so I obviously I have like the opposite of accounts receivable accounts payable uh but it increased like 2.2 to 2.5 times because I extended this uh with my suppliers yeah it was like yeah the money is coming the money is coming it never came and I had to increase the team from 110 to 25 guys so you tell me how you did that Alan that's really really hard to do but you did it just imagine uh August 5th last year like 50 minute call with 40 guys at the time like uh it was it was horrible I probably spent the next two months like August September October it was horrible horrible like and we had to agree to pay their how do you say the when you fired someone when you fire someone you have to pay them some money like we had to agree with them like guys I don't have any money I need to pay this in the following six months because at the time being we're we're burning like 200k a month and it was kind of reasonable uh the VCS didn't have any problem with that but but and how much cash was in the bank at that point none we're just playing with money entering money leading and and at some point I went to my investors and actually this is like a kind of a sad story I went to my investors the day the new business withdrew their their term sheet I went to my investors I was like hey guys we have a problem we don't have a term sheet anymore uh but I made out a plan I need 600k to uh to do all the changes I need I need to close Mexico operation I need to fire people pay their pay their money so I need around 600k and my investors were like sorry not gonna happen a you should probably bankrupt the company I was like I'm sorry what I mean this is a company we have thousands of customers we're at the time being we had over 1 000 customers uh recurring customers and I was like I'm not gonna bankrupt the company and actually I I went Against All Odds by myself like with no money I had to like push every every debts every payment I negotiated with the carrier companies and told them hey guys so bear with me we've been working together for the past seven years I know I owe you a lot of money but if I go bankrupt right now I'm never going to be able to pay any of that I owe you but instead let me pay you day by day so you don't increase your liabilities like every day I'm gonna pay you for the same Services I used and that's the way I've been able to go through and since the changes I went from negative 200k to a positive 40K per month so probably that's not easy congrats thank you for telling us that story I mean that's there's so many CEOs that had to go through that are going through it right now but no one talks about it so they always think they're the only ones doing it and it's just not true a lot of Founders are doing this right now it's horrible I mean I I've heard so many companies go bankrupt and I've seen this on other logistics company in Chile in Mexico like now July they're telling me so Alan I have a problem similar to yours in like you had in August and I was like boy you're eight months late you should have seen this coming uh happy to help but you're kind of late I don't know if there's a way back yeah but so let me ask you a question I mean do you your current investors didn't want to support you when you asked for 600k do you turn the Tails and say well then let me buy back all of your equity for a super discounted price I did I did I I offer I I actually had two times but it's unbelievable because the the same investor that didn't want me to take the attention of the 30 million dollar free money valuation I was like okay so you don't want to put money you're okay for for the company to buy to go bankrupt let me buy the company I'll take all the liability on the personal on my personal name and they were like no and I can't let you do that I was like why not you're willing to monitor it's one or the other but it's something like some some ego I I don't want I I have no problem for you to fail but I don't want you to succeed like what the hell yeah and unfortunately so that that was the first time I tried in August last year and I actually tried again like um two months ago probably but unfortunately on the shareholders agreement we have the right of first refusal right so I actually made an offer uh but I I knew that this guy was would want to take over the company from me so I didn't actually so I spoke to my co-founder and told him don't don't just agree to sell the company to me obviously I had spoke to him and let's wait for the 10 days for for the expiration of of the L shareholders to actually like put an offer over the table because I know this guy hasn't hasn't read all the bylaws on all the shareholders agreement and stuff so he's gonna make a mistake he's going to make an offer when actually the my offer hasn't been approved yet so actually the writer first refusal would be applicable and that happens this guy day nine he made a 20 000 offer for the company and I was like I just knew it I just knew it and at the time being I'm stuck with my with this investor sign I I don't have the right incentives I gone through a lot by myself but you know water on the bridge I mean how much do you and your how much Junior co-founder owned today uh probably around 49 49 okay I see I see interesting well I mean are you seeing anything at a macroeconomic level in Chile that gives you confidence that maybe 2024 will look better for the company in terms of retail sales inflation Etc uh I'd say I'd say definitely yes uh because this year and last year where there was a lot of uncertainty because uh the people of Chile vote for a new constitution and the the constitutionalists the ones who were uh to write the Constitution we're a mess just a mess it's just a political it's not very PC where would they were Ms uh they were all left-wing extreme left wing and it gave the economy a lot of uncertainty basically the Constitution it wasn't approved and and the new constitution to be Rewritten is like super right wing and so you know that's pro-economy so probably next year although we have a left-wing government the new constitution is going to be like the one we have at the time being or uh right wing it gives so much confidence to the market so I hope it'll be better for business it's going to be better for business so hopefully 2024 is going to be better not much better than this year but we're not gonna have like the biggest recession we've seen in in throughout history but it's not going to be get worse than this probably yep yep yep interesting well this is a heck of a story I mean how many customers of a thousand you still have today ah well when I I actually last night I probably saw a video where uh surging prices is something like ah yeah actually it was from uh live presentation from a VC of your interviews okay where like raising prices is something Founders are super scared of and actually in January this year I was like okay so what's killing me is my cash flow so what if we turn into a completely SAS business so I went I did I did an interview to all of my customers and my customer said no way I mean I like what you offered me I like the the return I like the value proposition I was like okay so if you like it that much I'm going to increase my prices and I did and actually my take rate went from probably 18 19 to a nice juicy 26 which is obviously 40 increase and and that's because I searched my price is probably a 10 for my customer which actually means like more gross profit it's just neat income with no additional costs uh obviously I had to do some discounts but I went down from 1 000 customers through probably 800 and I had a turn of probably like seven percent Revenue so overall it was super positive uh it's great you need to have some guts and just dive in go for it yeah very cool very cool how did you I know you're a fitness guy how did you manage just your physical well-being just your energy levels your sleep your food your gym time while you're going through all this pain um sleep and sports that's like and one mistake I did a horrible mistake was not talking enough to my wife um probably in August I came one day and I said like uh women like the company might go bankrupt she was like what the hell how come like you didn't tell me anything of of the process right and it was like you're right and I I had to stick with all this by burden myself so my biggest recommendation is gonna be talk to your spouse to your wife to your whoever to your best partner um like don't be afraid of of talking these things happens you know and sleep stay at least seven hours a day I try to sleep eight so I wake up I start working at 7am so I try to uh go to sleep at tops 10 30. uh in the night I do gym after work and I do it with my wife and we're both very sporty so we have a very like and she's a consultant so we have a very strict day in regards of work then we go to sports together we eat together and then maybe we work a little bit more together and so it's a nice balance we've been together for 10 years and it works that's amazing that's amazing well okay take us home here last Famous Five number one favorite Business book uh probably my mantra today is monetizing innovation number two is there a CEO you're following or studying uh uh what you've done so Nathan Latka might be the name you watch a couple of the interviews yeah probably I'm gonna copy your business like this like you taught me you don't know if you're actually in a very good position to launch a embedded fintech company based off how you sit in the payment flows we can chat more about that later but okay um all right number uh number three what's your favorite online tool for building ship it online tool for ship it must be slack yeah yeah uh number well actually we know situation so Mary do you have any kids no kids no kids and how old are you 33 23. okay yeah got it got it okay so 33 and then last question something you wishing you back when you were 20 Alan um a I used to work in an incubator in Chile and there was like this model like money over the table take it that not always applies like choose carefully your investors I mean if rather be alone that with bad company so I can I I'm suffering this right now so Choose Wisely and always always hear your spouse because my spouse told me she told me do not take money from this guy and I was like you don't know him he has good intentions yeah right guys there you have it ship it at a process in 2021 over 13 million dollars in volume from e-commerce sellers by helping them say okay where do you want to send that package of shoes we'll pick the carrier we'll send it their take rate was 25 well back then it was 18 per 17 18 today in 2023 because of macroeconomic conditions in Chile retailers you know higher interest rates less retail sales Etc they'll do about six million in gmv he did the hard work last year of downsizing from 110 employees to 25 they were burning 200k last year this year on track to profit 500k but let's make 1.3 million in terms of take rate on 6 million gmv hoping to just buy additional time here as they continue to scale 800 customers today because he lost 200 when he increased prices but that's extra margin to the bottom money he's bought himself more sustainability more longevity we'll see what happens next Alan thanks for taking us to the top nice thank you one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back-end dashboards their expenses their revenue our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube the big red button and then click the little bell notification to make sure you get notifications when we do go live I wouldn't want you to miss breaking news in the SAS World whether it's an acquisition a big fundraise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this 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