1741 – the E-commerce Gold Rush in Latin America with Ramiro Velasco

Josh (00:00:05) - Hey there, thoughtful listener. Would you like consistent and predictable sales activity with no spam and no ads? I'll teach you step by step how to do this, particularly if you're an agency owner, consultant, coach, or B2B service provider. What I teach has worked for me for more than 15 years and has helped me create more than $10 million in revenue. Just head to up my influence and watch my free class on how to create endless high ticket sales appointments. You can even chat with me live and I'll see and reply to your messages. Also, don't forget the thoughtful entrepreneur is always looking for guests. Go to up my influence and click on podcast. We'd love to have you. With us. Right now it's Ramiro Velasco Romero. You are the co-founder of Go of Vans. The website is Go of Anscombe. Go, Aviva. See, Ramiro, it's great to have you.

Ramiro (00:01:15) - Josh, thank you so much for having me. And honestly, that was a great plug. Thank you. Right from the top.

Ramiro (00:01:20) - It was beautiful.

Josh (00:01:21) - Yeah yeah. So listen so here's what I know about thoughtful entrepreneur listeners is it's kind of like going to a really good event. Like it's cool to learn stuff. It's cool to get inspired. But the best events that I go to are the ones where I make serious connections. So interestingly enough, what we've learned about our audience is a lot of people are researching topics and finding you, and I'm excited to talk about this topic because here we are in 2023 when we're recording this at the very end here. And what a great space to be in and talk about how the trends have been moving in your direction. You want to explain what Go Vance does?

Ramiro (00:01:59) - Totally. So we figured out how to get brands into Mexico and Latin America. And why are we looking at this? Because there's a buzz. There's a buzz. Josh, you and I were talking about it off camera, but there's a buzz around Latin America right now. Be it insourcing, be it an outsourcing, be it in, you know, shipping.

Ramiro (00:02:16) - There's there's some interesting people doing interesting things with taxes, right. Holding stuff in special economic zones. There's e-commerce growing like unbelievably fast. You have nearly 700 million people that are potential customers being digitized day over day, right? So no matter what point along the supply chain you are like, no matter what point of e-commerce or in general commerce you're occupying, what we're seeing is there's a buzz, there's movement and there's excitement. So we figured, hey, let's try to help brands sell in Mexico. So there's a ton of roadblocks. We can talk about that later, but there's a ton of roadblocks to get into the country and selling. And in consumers hands, we said if we can make that easier, then it is an easy value add for basically everyone involved. And I'll talk about a little bit in a second about like, what the e-commerce platforms look like for consumers and how we're getting, you know, basically scammed every single day with sort of the existing resources we have available. So that's what we're really aiming to tackle with on our end.

Josh (00:03:20) - Yeah. For someone that hasn't been paying attention, Ramiro, can you maybe talk about some of the trends, namely, I think that, you know, in over the past decade, there's been a lot when we think about E-comm and obviously, again, there are people that are way more involved in this world than I am, like yourself. But I think that, you know, in years past, there's been a lot of interest in doing business in China, right, as both, you know, kind of fulfillment, sourcing, that sort of thing. And trends have been from, you know, conversations I've had have been really moving toward the opportunity of near shoring. And, you know, particularly for an audience or someone business leader, that is, in the United States, for example, there is a huge opportunity and there have been a lot of incentives to encourage Latin American business. Can you give us a little bit of a higher level overview? I did a pretty poor job of explaining my observations.

Josh (00:04:15) - You can kind of fill it in for me, though.

Ramiro (00:04:17) - That was fantastic. Yeah, absolutely. What we saw, I think, during the pandemic was supply chains be disrupted across the board. And, you know, every single port that was bringing stuff in from China into the US was backed up. And, you know, we all had products that were there like upwards of like a month, two months, just because, like the ship was ready, but there were no appointments to get it off the ship. Right. So that brought into question a lot of the status quo that was already established. It was like, all right, I go on Alibaba. I find a product that I like, I'll bring it in and I'll sell it. And suddenly we went, wait a second, that's not working anymore. And a lot of these brands that have established supply chains from China just went, wait, I don't want this to happen again. And those sort of the view started broadening and we started looking to either side and went, wait, we have a massive land border with Mexico, right? That cannot get backed up by appointments to bring stuff in.

Ramiro (00:05:11) - And when brands started digging in, what they found is reliable partners. In Mexico, for example. And this is just the manufacturing side of things to go. Oh wait, lead times are much shorter. Wait, freight costs are much lower. Right? Or you know what? Let's call them comparable. For the time being. Manufacturing is comparable. And just the convenience of it became really appealing. So what we're seeing right now is the biggest northern city in Mexico, Monterrey. Freight costs are going up like crazy. Warehousing is going up, of course, still within manageable ranges, but hitting peaks because we're seeing record exports from Mexico to the US, obviously in the form of manufactured goods. What we're seeing is Mexico overtaking China as the US's number one trading partner. Right. Which is just monumental. Like I like to joke like it should have happened before. We're right here. But but what we're seeing is this strong shift towards some legitimacy in the Latin American market as. Not only consumers but also as manufacturers, also as like strong pillars for your supply chain.

Ramiro (00:06:20) - Now, if I can back up a little bit more, we're also seeing a huge amount. We saw this with the rise of remote work. We're seeing a huge amount of Mexican workforce joining US based companies for a lot of these remote jobs. Right. So that's also what that's doing is that's bringing basically they're getting paid in US dollars that's coming into the country and that's raising the purchasing power of your middle class. Right. So it's a feedback loop where you're seeing on one hand like let's call it a once in a lifetime event. Hopefully. On the other hand, we're seeing sort of this like digitization of work. And then on third hand, we're seeing positive business environment being created. Right. So like Tesla just set up a Gigafactory here in Monterrey. Right. Because it's the same idea. Government is now bidding for these giant corporations to come in and establish themselves, as, you know, let's call it legitimizing of the market. So in my personal opinion, over the next five, ten years, we're going to see a gold rush in Latin America.

Ramiro (00:07:26) - As you know, we're seeing brands like sort of hit their cap in the more established markets as we're seeing borders open up, as we're seeing we're having conversations with people that are saying, hey, I already manufacture in Mexico, but I'm not licensed to sell there. And it's like, oh, we can help you with that, right? Because there's a lot of flow of capital, information, infrastructure, everything sort of happening at once to where I think this is just the beginning.

Josh (00:07:52) - Yeah. So talk a bit about where go of an fits in who you work with, what that looks like.

Ramiro (00:07:58) - Totally. If you want to sell in Mexico, you need a Mexican business entity. I think this is quite straightforward. Um, this happens all over the world. If want to sell in any country, they're going to say, all right, well, I want my taxes. What's going on? Historically, we can get around that, right? Like on Amazon, we have North America, the remote fulfillment program, medical delivery, global selling.

Ramiro (00:08:17) - You have Shopify stores shipping to Mexico. And this has been going on for for years and years and years. But it's not scalable and it's not scalable because what you're seeing is if I'm going to buy an $8 product, do I want to pay 16 in shipping? Probably not. We're all used to next day shipping, maximum two day shipping. If I live in the mountains in Mexico, it's an easier country to get to. Like I know the US is to is today generally Mexico. We're also closed. It's next day for the most part. So when we're looking at that, it's like, do I want to wait six days for delivery? So a lot of brands think they're like, oh, we're selling in Mexico. And my immediate question is, wait, how much are you paying in fees? What are you what are your consumers actually paying because they're paying for delivery on top of that. And all these questions come up. And then the immediate response is how okay, how do I sell in Mexico? And that's where we come in.

Ramiro (00:09:06) - Right? And we figured it out from a couple of points. Obviously importing in logistics. You have to get really good at it. You have to know how to import, you know, comply with regulations and all these things. But we actually approached it from a different angle, which is, I'm Mexican, I live here, and I'm so used to getting ripped off and having to pay three x to type the cost of a product, because there's some drop shipper that figured out that, you know, like, hey, if I order it, my mom can get it in the States and ship it down and I'll just make that extra commission. And that doesn't feel great. Right. And that's actively hindering the growth of e-commerce, right, in Latin America. So what we figured is we can help brands come in, we can be the distributors of the product, right. And then use Amazon expertise that we've built up over the past eight years to really dominate the market. Immediately we're hit with a roadblock, which is sure.

Ramiro (00:09:58) - What does the Mexican market look like? Yeah, right. Because you're selling an unproven market and I'm.

Josh (00:10:05) - Better have a good partner. I mean, you know, talk about risk, right?

Ramiro (00:10:09) - It's exactly even, you know, the way we're doing it, like what you end up looking at is going, I don't know if my inventory is going to sell in one week or 100 weeks or, you know, like, what if it's just going to sit there gathering dust? Like, I have no idea what the market looks like. And for most business owners, that doesn't represent only a capital risk, but it also represents a time investment risk where you're going, how much am I going to break my head over trying to get into a market for it to just never lead to anything? There's only a set amount of hours in a day. Everyone listening to this podcast is infinitely too busy. Right? And then the question is. Do I want to dedicate resources? Like I said, not only capital, but time and attention and back and forth to on something that might not work.

Ramiro (00:10:50) - So what we figured is we got to make it as easy as possible and as headache free as possible, because I think that our philosophies that is a number one currency, my number one currency is how many emails can it get through in a day. Right. It's hard. So we said, hey, we'll do importing, we'll do logistics, but we'll also do market management, right. Like we'll do the SEO, ad management, like all of these things that need to happen. And the way we figured the incentives out on that is we actually work off commission because we need to be incentivized. I'm a big believer in win wins, right. Doesn't any good system has to work when people don't really want to work? Is my philosophy on system building and process building. So here we said, all right, we need to be commission only to justify, right. Like the market because we know it's an unproven market. You know what, maybe five years from now we can say like, yeah, markets huge.

Ramiro (00:11:43) - Like we'll charge a ton. No, let's try to make this work. Right. And if it works for you, it works for us and we're all happy. So I mean, after you're an agency for that long, you just trying to make win wins, man. Like you don't want people mad at you. Yeah.

Josh (00:11:56) - For sure. Yeah. How would someone know that they may be ready for you? Like in terms of, like, you know, what's going on in their business, you know, what kind of volume they currently have, what their objectives are, what would be like a very typical use case for you, just given who they are.

Ramiro (00:12:12) - That's a great question because it is so variable and it varies based on market and varies based on what your competition is doing, which is what a lot of people won't tell you. Right? It's very easy to come in and say like, oh, we'll do 15% of your US sales within the next three months. And it's like, got it.

Ramiro (00:12:27) - It's a possibility. But the question is, what's the competition doing? Because we've had cases, we actually have clients right now that are getting demolished in the US game. Just absolutely they're like we cannot compete in the US. But they looked at Mexico faster, so they moved to Mexico faster. Right. And here they're actually matching their US sales because in the US they're a small piece of the pie. And in Mexico they are most of the pie. Right. So the question other than sales, which I will answer in a second, is what's your competition doing. What's the market doing. What price points can we hit? What are your margins like in such a way that they can sustain this? We generally aim to beat North America and remote fulfillment program to north. We aim to beat their margins because they oh, if you go into your Mexican account and you start looking at the fees, you will be surprised. And sometimes you aim to hit the the American market margins. Now, in terms of volume, we have to be aware that this is an expansion project.

Ramiro (00:13:28) - This is somewhere where you're going to go in and actively invest. So you need an advertising budget comparable to the market now is is Amazon Mexico and McAllen, Red acres, little CPC literally 83% cheaper. Yes. But still there needs to be a cost benefit analysis on that front. Right? But in general, we are mostly aimed at medium to large businesses where obviously multinationals like Coca Cola has a Mexican entity. We're you know, we're not for them. Who for whom? It is not worth quite yet to do it all in house. Yeah.

Josh (00:14:04) - Yeah. Ramiro your website go live. Anscombe. Someone's been listening to our conversation. Where do they go from here? Like conversation. Do you have any resources you'd recommend that they take a look at?

Ramiro (00:14:16) - Absolutely. Honestly, this the absolute hubris on my part. My calendar is open and on the website, which, as you may imagine, is getting me in a little bit of trouble. But I would recommend you book a call because we were really set on making sure that, you know, we're working with people for whom it makes sense.

Ramiro (00:14:33) - So the first, you know, when we chat, we get to chatting. It's just like, hey man, what's your product? What's it look like? What's it look like in the States? What does the competition look like? And we do this all in the call, and then we can be like, you know, we're doing basically assessments like viability assessments to go like, oh, actually this could work. And this is what your competition is doing in sales. And we can get started within X amount of time depending on the, on the category, because, I mean, I spent a year before launch breaking my head over a ton of these nuances, and I wouldn't feel comfortable just telling someone to go out and, you know, like search, you can book a call, you can send an email. My email is also there, and we have a team of people that are trying really hard to, you know, make sure you get the right information.

Josh (00:15:18) - All right. Ramiro Velasco, co-founder.

Josh (00:15:21) - Go of the website. Go advance. Go and see. Ramiro. It's been great having you. Thank you so much for joining us.

Ramiro (00:15:30) - Josh, thank you so much for having me. And I think, you know, we went really fast, like we talked really quickly. But I think we got a lot in which makes me very happy.

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