Ecom Business Hacks w/ Rod

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.

If you found this episode
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