Redefining Ethical Shopping: The Impactful Dropshipping Model of Simple Switch | EP. #96

In today’s market, consumers are more interested in shopping ethically than ever before. On this 96th episode of The E-Comm Show, Rachel Kois, the CEO & Founder of Simple Switch, an innovative online marketplace that sources sustainable products from a network of ethical suppliers. Learn more about how Simple Switch is redefining ethical shopping with their dropshipping model, the impact this has on consumers, and how you can work with them and make a difference.

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Redefining Ethical Shopping: The Impactful Dropshipping Model of Simple Switch 

SPEAKER

Andrew Maff and Rachel Kois

CONNECT WITH OUR HOST: AndrewMaff.com  |  Twitter: @AndrewMaff | LinkedIn: @AndrewMaff 

Jake Karls

Rachel Kois is the CEO & Founder of Simple Switch the online marketplace for ethical and impactful shopping. (Like Amazon, except every product has a positive social or environmental impact.) They're on a mission to make values-aligned online shopping easy for businesses and individuals. Rachel loves rock climbing, craft beer, her vegetable garden, backyard chickens, and honey bees. Her first entrepreneurial venture was a Hogwarts-scarf-knitting business, and she traveled to 28 countries. She’s a stubborn idealist committed to authenticity and making a difference. 

Transcript: 

00:02

Our goal is really to bring together the brands that are already making this impact. And we call our supplier's impact partners. For that reason, we really are working to partner with them to make more impact in the world by bringing them more sales and showing them alongside each other, and curating them better.

00:17

Hey Everyone, this is Nezaar Akeel of Max Pro, Hi I'm Linda and I'm Paul, and we're Love and Pebbles.

00:25

Hi this is Lopa Van Der Merch from RASA

00:27

you're listening to and you're listening, and you are

00:29

listening to The E-Comm Show. Welcome to The E-Comm Show, presented by BlueTuskr, the number one place to hear the inside scoop from other ecommerce experts, where they share their secrets on how they scaled their business and are now living the dream. Now, here's your host, Andrew Maff. Hello,

00:58

everyone, and welcome to another episode of The E-Comm Show. I'm your host, Andrew Maff. And today I'm joined by the amazing Rachel Kois, who is the CEO and founder of Simple Switch. Rachel, how're you doing? Ready for a Good show. Great.

01:00

Yeah. Thanks for having me. Yes.

01:12

Super excited to have you on the show. Show. Love talking about sustainability. I've had a lot of different brands in the sustainable space on this show. But yours is a very different approach. But I don't want to spoil it. So I will do the stereotypical thing. I will let you kick us off a little bit here. Tell us a little bit more about yourself more about simple switch. And we'll take it from there. Definitely. Yeah. So

01:33

as you mentioned, my name is Rachel, I'm the founder and CEO of Simple Switch. We are the online marketplace for ethical and sustainable products. So I'm guessing that the reason you say we're a different approach is because we have so many different products. And because we're kind of a one-stop shop model, right? We get nicknamed Amazon with a heart or sustainable Amazon. Because my whole mission in starting the company was to make it just as easy as it normally is to shop online from companies like Amazon, this show in particular, the listeners would be extremely familiar with the ease and convenience of E-commerce, but also all of the tech that goes into the back end there. So making sure that we have the same model and ease we say ease without apathy. So that shoppers and now also businesses, not just individual customers can get products that are in alignment with their social and environmental values. I think a fun fact I've been sharing a lot lately is that a trillion dollars was spent online for the first time last year, and the amount of world problems social and environmental, you know, climate crisis, world hunger, things like that, that could be solved with a trillion dollars of funding annually is pretty damn high. So we you know, we love that we get to help shift some of that consumer spending, it's money that's already being spent money that's already line items for businesses or household expenses. Things like toilet paper, coffee, so you know, anything like that, and help push it towards the positive impact that it can be made that the normal, we should be funding those things all the time.

03:11

I couldn't agree more. The interesting thing about your model, I have I've been preaching this for years of Amazon is just this. Well, actually, let's backtrack. You think like way back when right? You had like the Walmarts and the targets. And then everyone kind of got into this, like, No, you should shop Mom and Pop and, you know, support local businesses. And we got away from that a little bit as much as we could. And then I saw, you know, Amazon started to become this big thing. And I was like, Okay, we're doing the same thing, just online now. And I've always said, what's going to end up happening is we're going to see all of these different marketplaces start popping up that are more specific to a certain community. And so you obviously have gone in that direction and far surpassed what I thought was gonna end up happening. So that's awesome. What gave you this idea to start building out a marketplace as opposed to, you know, kind of like your own brand, or what you see most people end up doing online?

04:12

Yeah, it's a good question. I think rather than starting my own brand or something we'd be doing online or even like white labeling our own product type of thing, which you know, isn't out of the question in the future, but is that I was already buying these products from a lot of brands that were awesome. No need to reinvent the wheel. No need to create a forest. Yeah, our best seller is toilet paper, sustainably harvested bamboo toilet paper, and you know, the eight bamboo toilet paper company is going to be significantly less impactful than just me making it way more accessible for consumers to get the bamboo toilet paper alongside, you know, the gift that they need for their ants. And whatever else you need. We started I had the idea for this actually in 2015, which was eight years ago and it was because I, I had my wheels turning about kind of what I could do for social environmental impact because I was a business consultant in South Africa for a short time. And the clients that I was working with were just super talented, super innovative, you know, amazing entrepreneurs even, you know, with everything that I've learned about entrepreneurship since then, absolutely. They would compete, you know, if they were here, and so I got really frustrated that they didn't have the market share that I would have, like you said, you know, they don't have necessarily the market share of the people who are gung ho about the mom and pop shops and shopping local and things like that, just by nature of, you know, the city where they lived, or the community that they had access to. And I knew my way to help was not going to be, you know, moving to South Africa and changing the economy, I like to say, for multiple reasons. One is that I was young, I didn't have the skills and you know, couldn't do that on a large scale yet, but the other is for you know, white savior complex, I just don't need to be some gal from Denver, Colorado is thinking that she can go to the African economy, that's just not my role. Um, and for me, I decided, okay, well, I don't know what I'm gonna do yet. But I can at least be this kind of consumer, right? If my frustration is that they don't have access to the market and that businesses that I would be proud to support around the world, or even in my backyard, don't have access to customers, then I should become that customer. Like, that's the least I could do. Right? I think a lot of people have that thought and decided to be kind of more conscious consumers, especially around climate these days, and environmental sustainability. But if you, which I'm guessing a lot of listeners and probably yourself have, it is super complicated. And you would think, right, in our age of good SEO and Google that the best answer is to rise to the top and it just is not that simple. It's just not easy. And so as I was shopping for normal things that I needed, my everyday essentials, you know, self-care, personal care products, to a pair of pants would take me hours to figure out, you know, not only the impact of the certifications but also product specifications. And then even when I did find those brands, I would have 12 tabs open to make 12 purchases. And that just felt very frustrating. I tell I tell this relax, I think it really highlights my frustration in that moment that Amazon was doing their easy buttons at that time. So you would put one year you want and when it runs out. It didn't really ever last, I think because we have an easy button, like in our pocket with a smartphone, right? Um, but the stark difference between how much time and energy I was putting in to try to be a conscious consumer and how I could literally just smack a button and get a product but one that I knew nothing about. I didn't know if the people making it were being treated well, and I didn't know if you know if it was exploiting natural resources, which often unfortunately, they are. Um, so that is what drew me to that and why making it easy is really, I feel like my problem to solve because the great thing about something like Amazon or walmart.com is the ease right? It just makes it easier. And That's nothing to be ashamed of. We shouldn't like martyrs ourselves to have to be this. You know, super busy putting all our time and effort into picking the right products kind of person. It's just not necessary. It should be easy, but it should be easy to do it in a values lightweight. So that's been my founder obsession for a long time.

08:33

Nice. So let's say I'm a sustainable brand. How do I work with you? Do you have limitations? What's that whole process like?

08:43

When I was looking to see if I wanted to be on the show, I saw you have several brands who could work with us so you can let them know this. And we have kind of three major funnels for new brands coming in. It used to be when I started as you can imagine just a lot of research from my side going to find, you know, products that we wanted to add and finding the best sustainable brand. I still do quite a bit of that. But our customers are also often conscious consumers that we just are making their life so much easier. So if they are coming to us, they will be shopping from us, they'll sometimes suggest their favorite brands and then we bought those. And then for we actually our biggest pipeline now is companies who apply to sell with us and there's an apply to sell with us link in our About Us tab on the website that you can fill out it's just a screener. This is not our vetting process, but it makes sure that we find out a couple of key things. So since this is the E-commerce podcast, I'll get a little nitty gritty here with it. But you do need there to already be an E-commerce presence with the brand because we are not we're not warehousing. We're not buying wholesale in bulk and then you know taking those products and turning them into skews and selling them out. We are totally software-based and dropship. So the company needs to already have that e-commerce ability. strong preference for Shopify. because it just makes everybody's lives so much easier. But we can do some other platforms as well, they just might cause a little bit more headache. Um, and then there needs to be already a US sales presence as well we get requests, sometimes from brands around the world who are seeing us as their ticket to kind of expand into the US market, which I would love to be someday. But that just, you know, we aren't the ones dealing with things like the shipping and logistics and customs. In my perfect world, I mean, you just heard why I started the company. So in my perfect world, I would love to enable that someday or maybe have some kind of accelerator for brands like that. But it's not what we have the capacity for now. And then they do need to do a bit of summary information about what their impact is. And just give us an idea of that, because we, first of all, want them to read into the kinds of brands that we will take, we vet for something like 52 metrics, and now, we've met really simply for the UN Sustainable Development Goals, there are 17 things everywhere, from employment practices to clean water, really a lot of really important things. But then we also have our own lists and our own, call it an algorithm, if you will, that we've asked for. So we try to make sure brands go in there, poke around and make sure that they would self-select into those categories before they even email us. Because we have that screener, we very rarely get a brand that isn't the right impact fit, often we'll get, you know, product discrepancies, or are those more kinds of like logistical things, or maybe they don't have, we err towards businesses with a year in sales. So that's another thing is I think, occasionally, we get kind of mistaken for something like an Etsy model where someone's like, oh, I can start a sustainable brand next week. And then I would wear that's not really the goal. Our goal is really to bring together the brands that are already making this impact. And we call our suppliers impact partners for that reason, we really are working to partner with them to make more impact in the world by bringing them more sales and showing them alongside each other, and curating them.

12:13

Nice. Do you get any questions around like, competition? Like if you're offering, you know, multiple different types of products that are in similar categories? How does that work itself out? Yeah,

12:26

great question. I'm primarily with us, it works itself out because we are looking to have as many of these brands as possible. So and we make that pretty clear, we occasionally get questions about it. But I think all the brands, you know, if they've looked around our website, kind of understand that we don't actively search out new brands, in categories where we already have a great, you know, option. But this happens to us a lot in apparel and accessories, bags, and things like that. Because those are really popular industries for impactful products, especially when you're looking at kind of empowerment through employment, which is our term for a company, you know, that's giving a more fair wage job in an area where there's a lot of risk for exploitation or human trafficking, things like that. But I think because we're trying to bring in a wide range of consumers, it's great and good for us to have a wide range of products. So we haven't really run into that as a big issue. But I kind of giggled when you asked that question because we're just getting to the point. And I mean, we went from 300 to, you know, nearing 10,000, rapidly nearing 10,000 pretty quickly. So it's definitely something we've looked at, I would say, rather than the competition issue, it's more of just the merchandising, like making sure everything gets shown. And as we're doing marketing, making sure everything gets put in there. But we actually are considering launching some in-page like advertising as well. So that if brands do want to kind of be seen first in you know, a certain collection or in a gift guide or things like that, that they're able to do that we've been extremely set it and forget it for our brands up until now. And we still will give that as an option. But that way if brands are especially motivated and excited to be found on our site, and you know, they want to put some time and money behind that, but we want to give them that option. And that's a request we've been getting for brands which is fun, fun to have brands say hey, we would so that's nice.

14:25

So you're nearing 10,000 products, right?

14:29

From about 80 brands, and like I said a lot of brands applying to sell with us. We're actually we're trying to have we're calling it something super cheesy like sales and Palooza Summer, summer sale, Athan something like that we're trying to be really sales-focused this summer across our whole team. So we're actually putting a pause on bringing on new brands until the end of June at least but potentially longer unless we have a specific request from a Is this customer, just all product, in which case we'll seek out those, but we just want to make sure we're getting the sales in the door for the brands that we already have. And then we'll start batching, either monthly or quarterly, adding new brands again.

15:12

You and I are clearly on the same wavelength right now. Because I keep things like, Oh, I know what I want to ask. And then you kind of like allude to it right away. So I was thinking, I was. I was thinking from the b2b side because you're a dropship model, can you do a wholesale option? Basically, where? Because I would imagine like there are countless hotels and restaurants and things like that, that really like to kind of go to the forefront? The sustainability side? How do you set that up with like, a dropship? Model?

15:46

Yeah, so, it technically looks really similar. So we will still, I mean, looking at it from a, how does the sale actually get made prospective, it's still very dropship, it just turns into wholesale almost as if we are enabling the business to make a wholesale order. So you, we still, you know, get that bulk pricing and, you know, the potential for customizations things that you you know, kind of the benefits of wholesale. And then our margin first looks slightly different, which, frankly, is like the bane of my existence right now is just sorting out all of those. It's, it's just, I spent the last you know, four years putting together these great automations. For our b2c where, you know, software API is bringing in the sale, we have the margins clearly laid out, and then you're able to, you know, just, I never touched the order, right, it comes in, we get a margin, the order goes out fulfilled by the brand. Yeah, that's amazing. And especially for subscriptions, super helpful. In my first year, I was doing all of that manually, like copying and pasting. I don't think a full year, but at least, it was terrible. And I just got involved, or an entrepreneur who's still doing that, and I like to change her life by making her aware of these software APIs. And I was so thankful to tell her that because it was terrible doing that it was so obnoxious. Um, but with b2b sales, where it gets a little tricky is that we have a little bit more flexibility with purchasing, right? If we, you know, are selling to a hotel, which you are, again, on the same wavelength, selling hospitality and hotels is a big win for us. So for instance, from a revenue perspective, we'd be going from like you buying a shampoo bar from us, which is awesome, but it's like $12, or something like that, right? But this hotel that I'm working with now would be buying $10,000 worth of shampoo a month. So that's great for revenue for us. But then also, instead of just, you know, saving the bottle, my shampoo bar last six months, so you'd be saving probably two plastic bottles a year, they would be saving 96,000 plastic bottles a year for this hotel. So we're stoked about the impact that we're seeing with b2b. But with that said, with a hotel, I actually have some of the products sitting here because I have been working on this proposal for them. But they we sell like, just because I already said that. I don't even know if you air your video or not. Or if we just do it for fun we do. Yeah, we have a, you know, like battery tax. And so with hotels, everything's usually on a cadence with their cleaners, or their property management company, right? So everything from their linens to their batteries for smoke detectors to their shampoo and conditioner to coffee, depending on the hotel and kind of how nicely they treat their customers. We can have more flexibility in pricing, because if they're going to buy $10,000 worth of shampoo from us, you know, we might be able to flex on the toilet paper or something like that, right? And so figuring out that process and what's you know, best for us to make sure that the clients getting the best deal, but that we're still making the margins that we need has been an interesting challenge for me, as we've moved into b2b I It seems to be going well so far. But it is significantly more complicated than just a set flat rate that we have.

18:57

So when you're in a drop shipping model, the thing that I always see, and I'm sure you as you're aware of the margins become such a challenge. And so you often see a lot of drop shippers, they'll find out like, okay, these are my top products, and they actually start to house them themselves and fulfill them themselves. It's kind of in a wholesale direction. And obviously being able to cut in on that margin, have you considered going in that direction at all? Or are you thinking your additional revenue is the advertising side?

19:29

Yeah, I think the additional revenue for us would be more of the advertising like content marketing, where we're starting to run some ads where we'll split you know, advertising costs on METAR on Google with our brands because we're both getting some margin. But the other thing is we have I didn't actually even know that this was true until I started fundraising from investors. But we have about double the typical drop ship margin for a marketplace. And I think it's just because we have really awesome relationships with our brands. It was a margin And then I just worked out with my earliest brands, you know, based on negotiating at the beginning, telling them that we'd be set it and forget it like we really try to make it something that they're not going to have to touch. And so it really just does bring in. So, for me, I'm less worried about margins. For that reason, obviously, because of the cost of doing business. And you know, getting that advertising out there is expensive, things like that would be great to have higher margins, but we're not seeing a ton, I actually make a slightly lower margin, typically, on the big wholesale, like, if we're just looking at percentages, obviously, volume-wise is truly better. But actually make typically a slightly lower margin when we're buying that book and doing that wholesale with our b2b clients. So but yes, I get asked this question a lot. And I could see us doing warehousing for maybe our top 10 subscription essentials. So I think for us, it would be less about margin and more if we ever start running into logistics or kind of supply chain issues having a little bit more, we haven't thankfully had a lot of issues with that. But having a little bit more control over those things would be my motivation to do that. Rather than margin. warehousing, it's great to get work. Working from my house, which, you know, my office is free. It's great. I Airbnb out my business. So actually, my office is making me money while we talk. You know, that's nice.

21:25

That's a way to do it. You mentioned that some of your brands are chipping in on some of the advertising what is your marketing approach just in general, for the business,

21:35

primarily, we don't focus on advertising, we're just kind of starting to scale that back up again. We know that we want to have a presence, especially for things like search ads, if you search, you know, sustainable home products, or sustainable business products, especially we want to make sure we're out there. But primarily, our marketing approach tends to be around content partnerships. So working things like this, I mean that, you know, getting our brand out there with my, my voice and my storytelling is a big thing that helps us right, if I can speak at a conference or things like that, we tend to do really well. And then we have an ambassador program. So we're able to send, you know, products as gifts for people to review. And we so far have stuck with a really kind of small and scrappy, what people would maybe call it micro-influencer, right people in the three to 5000 range do really well for us, because they often are actually friends and you know, connected to the people who follow them. So it becomes less of a, and we're so overwhelmed with ads. I think these days that if you can make it a little bit more personal, it's more effective. Um, yeah. I mean, it's like 1000 things with marketing that we have to juggle.

22:45

Yes, exactly. Welcome to my world. Absolutely. Yeah. Rachel, thank you so much for being on the show. Obviously, really appreciate I won't take up too much of your time. I know you're super slammed, but I would love to give them the opportunity level to know where they can find out more about you and of course more about the simple switch.

23:02

Definitely. Yeah, you guys can find Simple Switch on Instagram is where we're kind of most active occasionally TikTok@simple.switch. If anyone can get in touch with that simple switch account, it's just someone who's like, you know, they got it a long time ago and have since left the internet, I guess. But not so much on Instagram. Or if you want to follow my journey I'm it's @RachelFromSimpleSwitch. And that is you'll get some things like this about ecommerce and such. But also my my backyard chickens are big stars at that account. So just be warned if you go there. Um, simpleswitch.org is the website on Android and on the Apple App Store. It's simple switch or simple switch ethical shopping, either one should bring you there, and then see, am I missing anything else? Feel free to connect on LinkedIn. I know there are a lot of E-commerce people who listen to the show. Also, if you're listening to this, and you thought it was great, yeah, I hope you'll go make a purchase. And I'd be happy to give a discount code to your listeners. We didn't really talk about that ahead of time. But

24:03

Debbie got one

24:04

video, that Ecommshow is kind of the better

24:08

notes, let's do The E-Comm Show. And I'll add it to the show notes to make a

24:13

percentage offer that tThe E-Comm Show and just go in there. And yeah, it's like putting something on a subscription to make your sustainable life a little easier. And looking forward to hearing your feedback.

24:23

Beautiful, Rachel, thank you so much. Obviously, everyone who tuned in thank you as well please make sure you do the usual rate review, subscribe, all that fun stuff, or listen on whichever podcast platform you want, or head to theecommshow.com to check out all of our previous episodes and make sure to tune in for our 100th episode live on August 30. And I will see you all there. Rachel, thank you again, and everyone else. Thanks for tuning in. We'll see you all next time. Have a good one.

24:50

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