$400K/Month – Building an Australian Party Supplies Brand – Dean Salakas of The Party People
INTERVIEW VIDEO (Length – 1:00:03)
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Dean Salakas, Co-founder of The Party People, shares the story of taking over the kid’s party store business that his mother had started and establishing it into a household party store brand in Australia with successful brick & mortar and e-commerce operations.
Dean Salakas shares the journey of The Party People, a party store business that started as a kids party store and grew into a successful brick-and-mortar and e-commerce store. Dean discusses the size and layout of their stores, the evolution of their sourcing and supply chain processes, and the changes they made to their e-commerce process to capitalize on the growth of online shopping. He emphasizes the competitive advantage they have in the Australian market due to their wide range of products and optimized operations. Dean also discusses the role of AI in their business, the challenges of online marketing, the benefits of appearing on Shark Tank, and the importance of effective management and strategic planning. He also shares insights on productivity tools, the potential of augmented reality in retail, and the value of personal branding. Overall, Dean highlights the growth and success of The Party People and offers valuable advice for entrepreneurs.
- 00:00:00 In this section, Dean Salakas shares the background story of The Party People and how he got involved in the party store business. His mother started the business as a kids party store, and Dean helped launch it online in 1998. After working at a supermarket chain, Dean and his brother decided to buy the business from their parents in 2007. They saw a gap in the market and focused on growing the e-commerce side of the business. They faced challenges and made mistakes along the way, but have successfully grown the business and continue to do so.
- 00:05:00 In this section, Dean Salakas discusses the size and layout of their brick-and-mortar stores, comparing them to the Party City stores in Canada. The Party People stores are larger and offer a wide range of products under one roof, making it convenient for customers who want to get everything they need for their parties in one place. They have deep product categories, offering hundreds of SKUs in a single category, which caters to customers who want to host Instagram-worthy parties. Salakas also talks about the evolution of their sourcing and supply chain processes. When his parents initially started the business, they sourced locally, but as the business grew, they expanded their sourcing to include imports. They have since implemented management structures, systems, and processes to improve efficiency, and Salakas, with his background in process improvement, played a pivotal role in streamlining operations. Additionally, Salakas mentions how they embraced e-commerce early on when the concept was still new, and how they have witnessed the evolution of e-commerce over the past 15-20 years.
- 00:10:00 In this section, Dean Salakas discusses the changes he made to his e-commerce process and how his business capitalized on the trend. He explains that when they launched in 1999, there were no e-commerce platforms or much technology available. They built something that could be seen on the web with the help of IT students. In 2003, they became Google Australia’s first advertiser and later became Bing’s first advertiser as well. They were able to grow and innovate with the growth of e-commerce and offer convenience to customers. Salakas also shares that his mother’s idea to launch a website was based on the simple thought process of making their products visible to people across Australia who didn’t have access to them. They also catered to individuals who didn’t have time to go shopping during regular business hours. The convenience for customers remains an important aspect of their online business.
- 00:15:00 In this section, Dean Salakas discusses the early days of building his online store, The Party People, and the challenges of expanding internationally. He explains that his focus is currently on the Australian market, where they have a competitive advantage in terms of scale and efficiency. Salakas also discusses the value proposition of his business, which includes a wide range of selection and a focus on customer service. He acknowledges the increasing competition in the marketplace but believes that by understanding their target market and optimizing their offerings accordingly, they can continue to attract and retain customers.
- 00:20:00 In this section, Dean Salakas discusses the competitive advantage of The Party People in the Australian market. He mentions that while there are many competitors selling similar products, none of them have the breadth of range that The Party People offer. Salakas believes that their success comes from their well-drilled systems and processes, business efficiency, optimized margins, and experience in the industry. He notes that being a first mover in the e-commerce market and the ability to adapt quickly to market changes have been key factors in their success. Additionally, Salakas emphasizes the importance of experience in making accurate forecasts and staying ahead of competitors. He acknowledges that while being smart and cheating may be challenging ways to win online, being first and adaptive are their competitive values. Salakas also mentions the potential impact of AI on the business and how it may change the dynamics of intuition-based decision-making.
- 00:25:00 In this section, Dean Salakas discusses the use of AI in his business and the potential opportunities and challenges it presents. While they are experimenting with AI and recognize its massive opportunity, he doesn’t see AI automating the entire process in the short to medium term. He believes that AI-based decisions still require some level of human input for data filtering and emotional decision-making. However, he acknowledges that AI is a risk and an opportunity for businesses, emphasizing the need to quickly understand and utilize it to compete. Salakas also ponders the uncertain future of AI and its impact on web optimization and marketplaces like Amazon, highlighting early mover advantage but also expressing concerns about perfect competition and pricing pressure. Ultimately, he believes that AI will lead to consumers having perfect information and businesses needing to adapt accordingly.
- 00:30:00 In this section, Dean Salakas discusses the changes he has seen in online marketing over the past 20 years. He explains that when they first launched online in 2003, it was much easier and cheaper to market their products. However, now with a saturated market and high advertising costs, it has become more challenging. Salakas emphasizes that their approach has always been focused on profitability rather than chasing volume. They have a formula that works for their advertising budget and conversion rates, which has helped them maintain a profitable business. While they do focus on building their brand and allocating some money towards it, their main goal is always chasing profit rather than just increasing sales. Salakas also mentions that they advertise in various places such as social media, search, email marketing, and marketplaces. He concludes by mentioning that their brand recognition in Australia is quite strong due to their long-standing presence in the market.
- 00:35:00 In this section, Dean Salakas discusses the brand recognition and exposure that his company, The Party People, gained from appearing on Shark Tank in Australia. He explains that the rationale behind going on the show was not only to raise capital but also to benefit from the marketing and publicity it would provide. Salakas reflects on the success of the show, with over a million people seeing the first run and it still receiving views on YouTube. He also talks about the evolution of his team and the division of responsibilities between himself and his brother. Salakas handles areas such as finance, marketing, and e-commerce, while his brother manages operations. The biggest part of the team is the operations team, with his brother having around 30 out of the 40 staff members reporting to him. Salakas mentions that his team is managed directly by him, and he has a more direct contact with them compared to his brother. He highlights the differences in management style and the flexible, remote nature of his support team. Salakas also discusses the importance of his brother’s role in understanding the business and ensuring growth does not harm it. Lastly, he mentions that their marketing is not done in-house but with the help of an agency.
- 00:40:00 In this section, Dean Salakas discusses the challenges of using agency models for support and the fulfillment aspect of their e-commerce business. They currently fulfill orders in-house and use a third-party logistics provider (3PL). The average customer basket is quite large, allowing them to pick in-house more efficiently. However, they are also exploring ways to automate processes and become more competitive with the 3PL. Regarding returns, they have a smooth process with minimal returns. They charge customers for shipping, as offering free shipping would not be a profitable decision. As for future plans, they are open to diversifying their business and adding new product offerings or categories, but they are also committed to growing their customer base in the Australian market.
- 00:45:00 In this section, Dean Salakas explains how his business, The Party People, constantly evaluates whether to make changes and focus on new ideas or stick to their core business. Salakas mentions that as entrepreneurs, they often get excited about new ideas but have learned to consider whether they will be a distraction or a viable opportunity. They had success with pop-up stores but decided not to restart that business due to the risk and distraction it would create. Salakas also talks about a new venture they are trying, an augmented reality mirror, which has a potential for great synergy with their core business. They are willing to give it a try to see if it works and will evaluate the economics and viability of the project. Overall, Salakas highlights the challenges and subjective nature of deciding when to pursue new ideas in their evolving business.
- 00:50:00 In this section, Dean Salakas of The Party People discusses the importance of planning and forecasting in business growth. He highlights the mistake they made in the early days of not being prepared for the rapid growth in orders, which led to problems and even temporarily shutting down their website. Salakas emphasizes the need for entrepreneurs to move away from the mindset of figuring things out as they go and instead focus on anticipating future needs and potential risks. He also shares a personal learning experience about not getting too focused on individual tasks and missing the bigger picture in the business. Salakas explains the challenge of balancing immediate firefighting with long-term solutions and the need for processes and procedures to scale the business effectively.
- 00:55:00 In this section, Dean Salakas emphasizes the importance of having a business partner who keeps him on track and focused on the right things. He recommends the book “The One Minute Manager” for its insights into managing different people differently. Salakas also believes that augmented reality will be a hit in the e-commerce retail and tech landscape. In terms of productivity, he suggests using a project management or task management tool like Asana to help manage teams effectively. Salakas mentions Julie Mather as an entrepreneur in his industry whom he looks up to for growing an eco-friendly brand. The best business advice he received was to focus on personal branding, as it has helped him gain media exposure and promote his business effectively. Salakas encourages entrepreneurs to put their ego aside and promote their work to others.
People & Resources Mentioned in the Episode
Book: The One Minute Manager by Kenneth Blanchard Ph.D
What You’ll Learn
Interview withDean Salakas of The Party People
|[00:00:08] Introduction to Treptalks and guest Dean Salakas.|
|[00:00:57] Dean’s background and the founding of The Party People.|
|[00:02:32] Transition to e-commerce and early growth of The Party People.|
|[00:03:27] Buying the business from parents and initial challenges.|
|[00:05:00] Combining e-commerce with brick-and-mortar retail stores.|
|[00:06:00] Offering a wide range of party products to cater to different needs.|
|[00:07:00] Sourcing products and managing supply chain processes.|
|[00:08:00] Implementing systems, processes, and automation for efficiency.|
|[00:09:00] Early adoption of e-commerce and utilizing platforms like Google and Bing for advertising.|
|[00:11:34] Early adoption of e-commerce and overcoming challenges.|
|[00:13:25] Bet on e-commerce in the early 2000s and its rationale.|
|[00:14:55] Building systems and processes in the absence of platforms.|
|[00:16:23] Focusing on the Australian market and foraying into international markets.|
|[00:18:00] Navigating competition, managing costs, and evolving value propositions.|
|[00:19:00] Identifying target customers and optimizing for specific market segments.|
|[00:21:00] Competitive advantages and complexities of sustaining a successful business.|
|[00:22:19] First mover advantage and the accumulation of benefits over time.|
|[00:22:25] Winning in the online space: First mover, being smart, or cheating.|
|[00:24:00] Adaptability as a competitive edge and thriving during COVID.|
|[00:25:00] The role of AI and automation in business.|
|[00:26:00] Balancing AI with human intuition and expertise.|
|[00:29:00] Evolving marketing strategies and adapting to changes.|
|[00:30:00] Focusing on profit over chasing sales.|
|[00:32:00] Navigating the complexities of modern marketing.|
|[00:34:00] Measuring brand recognition’s impact on business success.|
|[00:34:27] Measuring Brand Recognition’s Impact on Sales|
|[00:34:58] Participating in Shark Tank and Its Marketing Impact|
|[00:36:00] Team Structure and Responsibilities|
|[00:37:19] In-House Marketing vs. Agency Approach|
|[00:39:00] Balancing In-House Fulfillment and 3PL Services|
|[00:41:00] Handling Shipping Charges and Returns|
|[00:44:10] Considerations for Business Diversification|
|[00:46:00] Evaluating Opportunities and Avoiding Distractions|
|[00:46:09] Introduction and Impact of COVID on Business Model|
|[00:46:27] Balancing New Ventures and Core Business|
|[00:47:00] Decision-Making Process for New Ideas|
|[00:47:31] Challenges of Identifying Risks and New Ventures|
|[00:48:00] Exploring Augmented Reality Mirror Concept|
|[00:48:55] Trying New Ideas and Scaling Opportunities|
|[00:49:18] E-commerce Platforms and Website Development|
|[00:50:10] Importance of Forecasting and Planning|
|[00:51:00] Balancing Short-Term Firefighting and Long-Term Growth|
|[00:55:00] Rapid Fire Round and Personal Branding|
In this segment, the guest will answer a few questions quickly in one or two sentences.
Dean Salakas of The Party People
- Book recommendation that you would make to entrepreneurs or business professionals (Response: The One Minute Manager by Kenneth Blanchard Ph.D)
- An innovative product or idea in the current e-commerce retail or tech landscape that you feel excited about (Response:)
- A business or productivity tool that you would recommend (Response: ASANA)
- Another startup or business that is currently doing great things. (Response:)
- A peer entrepreneur or business person whom you look up to or someone who inspires you (Response: Julie Mathers – Founder of Flora & Fauna)
- One networking tip or building and sustaining valuable professional relationships
- Best business advice you ever received.
(Response: Spend time focusing on your personal brand)
Sushant Misra of TrepTalks: Hey there entrepreneurs. My name is Sushant and welcome to Treptalks. This is the show where I interview successful e commerce entrepreneurs, business executives and thought leaders and ask them questions about their business story and also dive deep into some of the strategies and tactics that they have used to start and grow their businesses.
And today I’m really excited to welcome Dean Salakas to the show. Dean is the co founder and chief party dude at The Party People. The Party People is Australia’s largest party store, selling balloons, decorations, costumes, novelties, confectionery, theme party wear, and anything else anyone could possibly want for a party.
And their goal really is to help people have the best parties of their dreams. And today I’m going to ask Dean a few questions about his entrepreneurial journey, and some of the strategies and tactics that he has used to start and grow his business. So, Dean, thank you so much for joining me today at Treptalks.
Really, really appreciate your time. [00:01:00] Thanks for having me, Sachin. So, uh, very interesting store. I’ve never interviewed, uh, someone who’s, uh, you know, who, who owns a party store. So, can you share a little bit about your background story? Um, what motivated you to get start, you know, get involved with this kind of a business?
And, you know, what were you doing before starting this business? And how really you got the idea? And what, what was your motivation to, to start a
Dean Salakas of The Party People: business? Um, it’s a long story actually, but I’ll try to keep it short. So my mom started the business. She was a clown. Um, she used to do kids parties as an entertainer and she, um, decided to open up a kid’s party store.
And, um, yeah, I mean, the business grew from there and. Um, we launched online in 1998, uh, or she, she decided to build the story in 98. I think it launched early 99 and, um, we became Australia’s first party store. We also launched with click and collect, which I believe we were the [00:02:00] first Australian business to have click and collect.
And from there, and I mean, I was in high school at the time. My mom. Asked me to work out how to do this thing. So I worked with some uni students and we built the site um After after school, I went to university and then after university I went and worked at um at a supermarket chain woolworths In logistics, I didn’t really have much interest in getting into the family business to be honest I wanted to do my own thing Create my own life for myself and, um, love the challenge.
So I just wanted to get out there and do my own thing. Um, yeah. And then my parents decided to sell, uh, in 2006 and they had a buyer on the table and my brother and I decided to buy the business, um, because we didn’t want to see, we thought it was a good opportunity. Didn’t want to thought it was going to sell too cheap to be honest as well.
And, um, yeah, we just saw a real gap and we thought our complimentary skill sets would work really well, which is kind of how it’s played out. We, We, we made that [00:03:00] decision pretty quickly. We, we bought the business in 2007 and we, we changed a lot pretty much overnight. And, um, then we saw massive growth and, um, you know, we, we, we, we focused on the digital and, and, and grew the e commerce side of the business.
And, um, yeah, we’ve had a lot of fun along the way, made a lot of mistakes. Um, but you know, we’ve, we’ve kept growing and, um, you know, very happy with where the business is today and we continue to grow.
Sushant Misra of TrepTalks: So it seems like this is this this was a family business and so you were not involved before buying this business at all like you were doing your own thing you’re you and your brother and so when you said that you bought this purchase uh business from your parents like can you share a little bit around that you know did you have to spend your own money and was it kind of like a significant investment
Dean Salakas of The Party People: Um, yeah, so we bought it.
Um, we had worked in the business our whole life. I guess that’s probably one thing I would say, like, even when I was, when I went off and worked at Woolies, like, you know, we helped the [00:04:00] family out. It was very much a family business. And when they needed us, we were there, you know, and quite often I’d work on weekends for extra money, especially when I was at uni and, and things like that.
So yeah, I definitely still, my brother and I still sort of, uh, always, always worked in the business. I guess, um, yeah, when we bought it, we had to get a loan to do that. And, um, and, you know, my parents were very, you know, very sort of big on not giving us stuff, um, because that sets the wrong motivation. So, um, they did make us pay for it.
Um, which is fair enough. I mean, they earned their retirement. So, I think, um, that, that, that’s, that’s, you know, they just didn’t want to give us a freebie and us not appreciate something. So, um, we did get a loan and bought it. and pay that off pretty quickly. Actually, we, we did really well off straight away.
As soon as we took over, we had, we’re running on around 300% growth in that first couple of years was, was really good. So right
Sushant Misra of TrepTalks: now is your business completely e commerce or do you have like [00:05:00] retail stores
Dean Salakas of The Party People: as well? We’ve got two bricks and mortar stores, um, two large format stores. Um, I believe you’re in Canada, so it would probably be similar to a party city.
Um, I’ve been to lots of party city stores. We definitely are on the larger end of what a party city would be. Um, I know they’ve got a range of store sizes, but we would definitely be a large. I forget the conversion metrics between feet and, uh, and, and meters, but, you know, our, our store, one of our stores is a thousand square meters and the others, 1800 square meters.
So, as you can imagine, they’re quite large stores and, um, you know, they, they do quite well and we, and we pick from those stores. So we have our e commerce operation as well, and they draw that stuff from those physical retail outlets. Um,
Sushant Misra of TrepTalks: can you talk a little bit about the products that you sell and and how does your business really help, uh, people in in terms of, uh, you know, getting the party supplies and and.[00:06:00]
Really organizing their parties and
Dean Salakas of The Party People: things like that. Yeah, look, I guess the key thing like there is like I mentioned that there was a large format story. We have all the products you could need under one roof. I mean, uh, similar to Canada in Australia, you can, um, you can go to a discount store. You can go to a supermarket.
You can go to a department store, essentially, and get your party supplies. Um, we go deep on the category. So, you know, if you want to go to the store. Yeah. Yeah. The local discount store to get some frozen party supplies, you might find at best 50 skews, maybe 100 with us, you’ll find, you know, 3400 skews in that one category.
And, um, you know, if you’re really going to have a party where you want to get everything all at once, and I mean, we’re dealing with a category where it’s low value. Um, so people don’t want to be shopping around for every little bit of peace they want for their party. They want to get it all under one roof, get it all done.
Um, I mean, you have different, different types of buying behavior. You have that person who just wants to get it all done. You have the person who, um, is a bit lazy and just can’t [00:07:00] be bothered and just doesn’t care about what it costs. I just want to get it done as easy as possible. Um, and then you’ve got that person who wants it to be, you know, an Instagram worthy party.
And again, by having the depth of range, we give them the options they need to be able to create that experience for their, you know, for their friends and family.
Sushant Misra of TrepTalks: Uh, in terms of, um, The items themselves. I mean, it seems like the, so the business was started by your mom, uh, before, uh, before you, um, I mean, it seems like, you know, she probably created most of the supply chain processes around, you know, where, you know, she buys the products from and things like that.
Can you talk a little bit about that? Um, where do you purchase the product from to manage your costs? Is it mostly really China, you know, Southeast Asian countries? And how has your processes changed over time? Are you also manufacturing something
Dean Salakas of The Party People: on your own? Uh, well, when we took over the business, it was literally my parents who worked in the store with one employee.[00:08:00]
Um, so it was a very small operation. They’re very small and there were no systems and processes. That’s for sure. Um, you know, everything was done on just, just how they did it. There was no, there was no procedure manuals or anything like that. Um, And in terms of sourcing, everything was sourced locally when we took over again, too small, no scale to be able to draw from overseas.
But definitely when we took over, um, you know, I think about 40 employees. Um, so, you know, we definitely have management structures in place. We have. Systems and processes, which are documented and people understand how they work. We have every most things are automated to some extent. So we spent a lot of time.
I’m a business. So when I said earlier, I went and worked for was what there’s a business analyst. I was in process improvement essentially, um. And, you know, I brought those skills into the business and, and, you know, worked on the, the business itself, my brother’s job, uh, as my business partner. [00:09:00] So my brother and I are business partners and his job was operations.
So his job was to keep the business running while my job was to, you know, improve things and find better ways of doing things. And like you mentioned, they’re about sourcing as well. Um, looking at importing where it’s appropriate and how we fund and manage that, how we unload containers and all those, anything that’s a new process that fall under my, um, my purview, I guess, to make sure that as we, we do these things that the business was able to, to manage them and get through them.
Sushant Misra of TrepTalks: So early 2000, mid 2000, that was kind of really the beginning, I would say almost of e commerce because at that time, you know, there weren’t e commerce platforms. There wasn’t really a lot of, you know, social media, but just getting started out. Um, can you talk a little bit about whose foresight it was to bet on e commerce at that time and how have you, um, experienced e commerce evolve?
You know, through the [00:10:00] last 15, 20 years and how, you know, what changes have you made in your e commerce processes and businesses to really, uh, capitalize on, on, on this, uh, big,
Dean Salakas of The Party People: uh, big trend. Yeah. So with the, um, so we, we launched in 99 back then, like you said, there was no platform. There wasn’t even really much technology around for it.
It was. You know, we didn’t, there was no e commerce people. There were IT people that knew how to code things, um, which is what, who I worked with. I worked with a bunch of two IT students that built me something that could be seen on the web, essentially. Um, that, that’s, that’s, that’s how it worked. In 2003, I mean, I left this part out of my story, but we actually became Google Australia’s first advertiser.
Um, I did a, while I was at university, I was doing my, my final year, and in that final year, I did a bunch of, You know, assignments on the business, uh, you know, thesis and stuff like that. And, um, I look [00:11:00] specifically at the process improvement. Um, and, um, you know, with that, Google just happened to be launching in Australia in 2003.
And, uh, we became their first advertiser. Um, Bing came. I think a couple of years later, and we also became their first advertiser, um, in Australia. So we, we kind of got on the bandwagon early, I guess, for everything. When, you know, as e commerce grew, we were kind of already there. Um, back, back when we first launched, you know, obviously in, in 99, we were getting one order a month, I think, or something like that.
And, um, you know, it really wasn’t. Not much happening, but as e commerce grew, we were kind of, um, there to soak up that growth and, um, you know, a lot of people talk about us and how we’ve innovated and, um, you know, that sort of stuff and, um, You know, we, um, sorry if just, I’m just gonna pause it for a second.
Is that all right? Okay. Yeah, no worries. Hey, may, I’m interview, [00:12:00] I’m in interview. Is that alright if we pause it? Okay. You to cut that out?
Sushant Misra of TrepTalks: Sure, sure. Yeah, no worries. Do you want, do you want me to pause it or?
Dean Salakas of The Party People: No, no, no worries, no worries. So my wife was there and lights were clanging and I like, man, no worries,
Sushant Misra of TrepTalks: worries.
Shall we, shall we continue? Yeah.
Dean Salakas of The Party People: Yeah. Do you wanna ask the question again and I’ll, um, I’ll answer. Sure, sure.
Sushant Misra of TrepTalks: Um, so.
Early 2000s was really the beginning of e commerce, right? And it’s, it’s, it’s such, it’s, it’s so, it’s so interesting that, you know, looking back now, you know, if somebody is looking at e commerce now, it obviously makes sense. Yes. You know, e commerce the way of the future, but back then, you know, when the internet bubble was, you know, bursting and, um, A lot of people probably thought that, you know, internet was some sort of, uh, you know, fad that maybe would go away.
Or, you know, what, what is e commerce? Why would someone want to pay online? [00:13:00] Um, at that time, I mean, you bet on the, on the e commerce, right. And, and you kind of got started on this. So can you share a little bit about your thought process on, you know, was it at that time, you know, whose foresight was it to say that.
You know, online we can sell online. That could be another channel and you know who took that bet and You know, how have you evolved
Dean Salakas of The Party People: since then? Yeah, so as you I don’t know how it was in uh in canada But in australia, um, there was a thing we had called yellow pages, which was a directory people used to find businesses um You know that that was where you just spent all your money That’s how it worked back then in the 80s and 90s.
Um, usually advertising the directory and, um, yeah, my mum’s idea was to launch a website. You know, her, her thought process was, was, was quite simple. Like you said today, it seems very obvious, but at the time her thought process was just, [00:14:00] there’s people around Australia that don’t have access to the products we have.
So let’s, let’s, let’s make it visible to them and give them a way of, of buying those products. We often did mail orders and things like that. So that’s kind of part of it. Um, you know, people, you know, she was a working mum, obviously running the business, um, while looking after two kids. She didn’t have time to go shopping and she also thought there would be a lot of other people in a similar boat, um, that would be working full time, have no time to, to buy the stuff they needed and, um, needed to do it after hours, needed to do it at night, uh, when we weren’t open.
So, Um, that was a simple sort of, uh, thought process around why to launch an online business, and it still applies today, really. Um, it, it, nothing’s changed there in terms of why we did it and the convenience for the customer. Um, and obviously we were able to exploit our, our sales as a result. I mean, like, you know, back then there were no platforms, there were no, um, you know, there were just two IT, you know, when we built it, we just…
Um, my mom said, [00:15:00] you figure it out. There’s some I. T. students here that know how to do I. T. stuff. Can you build something that people can see on the worldwide web? Um, and we did, uh, for about 10 grand, which, which at the time was crazy. Like you mentioned back then, after the dot com just crashed, no one bought anything online when dot com took off in the, you know, in the eighties and nineties.
And. And then we decided to do it after that crash. Um, and yeah, I mean, I think my mom was sort of very innovative in her thoughts to do that. And then when we, um, you know, when we started looking at it, you know, obviously everything we had to invent, there were no platforms. So we had to build like, I mean, I was a business analyst at Woolworths and I.
Yeah, it was very savvy with Excel and macros and things like that. So I’ve built my own, you know, shipping software out of Excel. I’ve built my own inventory software out of Access, Microsoft Access. And, you know, all these things back then I had to build myself. Now we’ve got a bunch of plugins today that do it way better than I did it.
But, you know, the very basics of getting us off the ground [00:16:00] and getting an MVP, you know, viable, you know, proposition there was. Um, you know, it was essentially me building stuff myself, uh, in, in tools like Excel and Microsoft access.
Sushant Misra of TrepTalks: Are you right now selling mostly in Australia or, uh, have you expanded in any other country or are you planning to expand it or just, you know, just focus on one market and really just
Dean Salakas of The Party People: capitalize on that Yeah, pretty much that.
We’re focusing on Australia. I mean, we had a little foray into international. Um, we found it very difficult because, you know, we have competitive advantage here. We have scale. We have focus. We found the international markets at this stage were a distraction for us. Because, you know, going into other markets would be, you know, Canada is an example.
We did go into Canada a little bit, um, but, you know, it’s very hard. We’re competing with party city and we’re not on the ground there. They are, um, they have efficiencies. We don’t, um, so to be able to compete with them, we really don’t have a, um, a factor that makes us stand out from the [00:17:00] local options, um, which would give people.
You know, a reason to buy from us other than us advertising better than them, which doesn’t really make sense. We, you know, we need to have a better value proposition for the local market to make it worth, you know, getting the synergies and the value out of our advertising in the local market. So we pulled away from that.
We focus on Australia and, um, you know, we’re focusing on doing what we want when we think there’s still more market here to grow with. So, um, that’s the focus for now. Okay.
Sushant Misra of TrepTalks: Um, so your value proposition in the Australian market. So you said number one, you know, you kind of have the wider range of selection.
So if somebody could go to your store and they can get basically everything they want, so they don’t have to chop around that kind of a big value proposition. Um, now you have a certain scale. So I’m assuming, you know, your supply chain processes. And, um, I mean, are you buying from China now? Um, uh, I’m, I’m, I’m assuming that gives you a certain edge in terms of managing costs and [00:18:00] things like that.
Um, but, but given that you started in early, you know, 2000 and so forth. Now, I mean, these kinds of products. Probably, you know, there are so many competitors, even in the Australian market that are available selling it, people can go on probably Amazon Australia and buy these kind of things easily. Um, how has that changed your business in terms of, you know, your own value proposition being competitive in the marketplace?
What else do you have to do in order to continue to bring new customers and hold the customer that you,
Dean Salakas of The Party People: uh, that you have? Yeah, look, it’s a good question. And I probably don’t have all day. The answer, the answer would take me all day to explain it, I guess, because it’s very complicated in terms of managing the, you know, the dynamic between the customer need and identifying what that is and it, it sounds simple enough, but it’s, it’s really not, you know, we’ve figured out what our customer is and where they sit and it’s not as simple as saying anyone who [00:19:00] has a party to some extent, I would say, yeah, that’s, that’s our market, but you know, we really identify that.
That person who is, you know, is going who needs access to a wide range who is less price conscious but more interested in service and and range. Um, and, you know, we’ve we’ve kind of narrowed down what exactly that means in terms of what we do and it’s. Probably too hard to explain on the here without getting real technical, but that’s kind of what we’ve narrowed down is what is that, what is, what is the, the market and how are we going to fit to that market?
And it’s not everyone, you know, if the customer wants to have a party and they want a real budget party and want to save some money, that’s not us. We don’t run sales. We don’t run self peers at all. Um, because that’s not our customer. So we don’t do it. Um, you know, conversely, I mean, some customers, you know.
We’ll throw a party that’s, you know, hundreds of thousands of dollars. That’s not us, that’s not our customer either. You know, if they want that kind of a service. Um, we really found out what we focus on and we, we optimize for that. [00:20:00] And, you know, if there’s, there is a lot of competitors in the market in Australia and they’re all selling similar products to us.
Um, I don’t think anyone has the breadth of range we have, um, because it’s very difficult to do as well. Um, you know, the competitors in the market have struggled to find how we make our business model work. And it’s almost impossible for me to explain that on this, this podcast, but it’s very hard to make the numbers all work.
You know, I mean, everyone who goes into our industry starts off by saying we’re going to be the biggest and the best. Um, then they realize there’s cost implications. Of that, you know, of providing that and it makes it very hard to be profitable. If you don’t, you don’t have your systems and processes very well drilled and you become very efficient.
And like you mentioned earlier about importing and, um, you really have to have the margins, you know, you have to really have the business efficiency worked out and the gross margins worked out, um, and being optimized to then be able to compete on a level. So I’d say at the moment, you know, we’re ahead of our competition [00:21:00] so far that.
They struggled to compete with us because they can’t get to where we are. I mean, anyone could do what we’re doing. Um, but to get there is very, very difficult and they would have to invest a lot of money and lose a lot of money to get there. Um, and it’s not all like, you know, I mean, they could do what we’re doing and offer the same type of range, but then they’ve got to have the systems and processes, you know, my brother and I have the skillsets that compliment each other to help us get there.
It’s very hard to get a business that has all the right. You know, the right things working to get it to where it needs to go. I don’t know if I explained that well enough. It’s a very complicated question to answer. No,
Sushant Misra of TrepTalks: I think, I think I understand. I mean, to me, it seems like it’s more of the first mover advantage, right?
So you got into the e commerce market and your mom started this business, which was kind of, you know. Maybe one of a kind in Australia at that time or, or something like that. And, and of course over time, as you grow, you [00:22:00] achieve that, you know, the benefits of scale and you know, the experience and, and, you know, you build up the customer base over time.
So I think that’s the, um, that kind of all accumulates, uh, to, to, to create that, you know, uh, competitive advantage in the marketplace, which is difficult to beat in, in this kind of a commodity based business.
Dean Salakas of The Party People: Yeah, I guess I guess like just adding to that, I guess to keep it simple, you’re right. First mover is very key to for us.
Um, you know, I, I do speak a lot of events and I, you know, I always talk about how there’s, you know, there’s three ways to win online and it’s being first, being smarter or cheating. Um, now cheating is no, not a good way to go. You get, but being smart is pretty hard even for us. I mean, I like to think we’re pretty smart, but then, you know, you’re competing against large I’m competing in party against.
All my department stores that have teams of people that are the best of the best. Um, you know, I’m competing against very smart people. So it’s pretty hard to be smart. What we do have is where it’s more medium sized business that can be agile and be first. And [00:23:00] that’s our competitive edge, particularly in retail.
Um, being adaptive is very, very important. The market changed very quickly. We just had COVID, you know, we were able to adapt to that at lightning speed. Um, and extract the most out of that situation, and that’s another story for another time. But, you know, we, we went from being 98% down to beating prior year through COVID, um, through some, you know, innovative adaptations during that period.
And I think that’s a key is in business, you need to be flexible and adaptive. And if you can do that, you definitely can, um, extract value. And like you mentioned, you know, we’ve had 20, what is it? Since, uh, 2098. We’ve had 25 years online to learn and adapt. Even if someone replicated our business today, um, they don’t have, and they were very smart.
They don’t have the experience to execute. Um, a perfect example, and I’m probably getting a bit deep here, but, you know, squid games came out last year and. Um, we bet real big on it. We went real, real deep, you know, we went real [00:24:00] big on the range, real big on volume. And, you know, probably the average layperson would have thought we’d been crazy with the numbers we were talking in terms of getting stock.
But we just, we’ve been in the business 25 years, we’d seen these types of movies, releases. You know, come out and what they’ve done. And we were able to apply that experience to, to make a, you know, a forecast on something that’s almost impossible to forecast. Um, and we got it pretty right in the end. And, you know, squid game was huge and Halloween came and everyone was buying squid games, everything.
And, um, and we were the only one in Australia that had the stock. And I think, you know, experience is, is, is also quite a major factor of why we are where we are. I wonder how
Sushant Misra of TrepTalks: AI is going to change that, you know, the whole scenario that you, you know, the whole scenario that you just described is almost like, you know, what right now when people manage a business like this, it’s almost like an intuition that you have, right?
So you can [00:25:00] see some trends in the market and things like that. But when, you know, AI is there. And AI of course, has access to, let’s say, the, the, the, all the internet and the news and, and AI can recognize these trends on a very, uh, early levels. Um, and, and that’s somehow connected to e-commerce and supply chain processes.
I wonder how that’s going to automate, you know, AI recognize the trends and, you know, orders the product. What’s the product on on the store? And if, uh, yeah, I think it will be very interesting. Are you using in your business at all? Or have you started playing with some sort of technology in your business?
Dean Salakas of The Party People: We are, um, we are experimenting and I probably don’t want to talk too much about the secrets, uh, that we’re currently sort of cutting edge stuff that we’re doing at the moment, but definitely AI is something that we are looking at quite heavily. I mean, one, one caveat I would say is that I don’t, not for the short to medium term.
I don’t see, you know, [00:26:00] like what you mentioned that the AI will be automating the process. So, you know, I don’t think we’d be saying to AI, Hey, figure out the trend and order the stock. And make it happen. I don’t see us getting to that point because AI can make mistakes based on the data, you know, based on the data input and data inputs need some, you know, level of filtering.
And I think at the moment, only a human can do that and make that emotional decision. So I think at the moment, you know, definitely we’re not seeing a risk of, you know, automating that sort of stuff, but I definitely think like AI is a massive opportunity for any business in any category. It’s about, you know, I mean, anything like we’ve seen, you know, our business has innovated all the way along the journey and, um, we just see change as an opportunity, not as a problem.
So I think AI can be seen as a bit of a risk for a lot of businesses, but it should also be seen as the opportunity that needs to be tackled very quickly. Get an understanding of it and get an understanding of how you can best use it to compete because yeah, I really [00:27:00] don’t know where it’s going to go.
It’s really hard to see how this is all going to play out with AI because, you know, I’m using it and yeah, I might be first mover, but when everyone else is using it the same way I’m using it, then what level of advantage do I have? I mean, just that simple example, you know, if I get AI to create a web page for me.
But everyone does that, then we’re all going to have the same web page or, you know, it’s all going to be, it’s not even if we, even if we can get AI to write all those web pages different and everyone gets a different web page, it’s still going to be optimized. So how is, you know, if we’re all writing SEO web pages using AI, how is Google going to.
Outrank one versus the other when, you know, we’re all writing perfectly optimized content, you know, so I, I’m really not sure how it’s all going to play out, but definitely at the moment, since everyone’s not using it, um, I think those businesses that are using it will get massive gains early on and potentially first mover advantage in certain areas.
Sushant Misra of TrepTalks: Yeah, it’s, it’s, it’s very early on, still early on [00:28:00] and, uh, yeah, it’s difficult to predict what’s going to happen. Uh, you know, maybe it will lead, lead to the perfect competition where, you know, uh, Every consumer gets the best pricing and the best product for them that they want. Um, and maybe that’s going to level playing field for, uh, you know, for, for a lot of businesses.
Dean Salakas of The Party People: I mean, it’s certainly not going to help the race to the bottom, um, on pricing. That’s for sure. Um, which is what we’re seeing, um, more of here in Australia. We’ve, you know, we’ve got, you know, Amazon here now and, um, marketplaces are having a major impact on the retail market. Um, And more recently, I mean, I think, uh, America and North America are much more mature than us in that, in that department with Amazon.
Um, Amazon’s only been here, I don’t know, a couple of years now, and they really haven’t made huge inroads. Uh, eBay’s still our number one marketplace here in Australia. So, um, you know, I think [00:29:00] AI is going to really mess with that whole model and that’s going to be in the next frontier. And I really, yeah, I think you’re right.
We’re getting to the point of consumers having perfect information. Um, and and how that impacts business. I’m really not, not, not thinking that far ahead at the moment, but it’s definitely some, it’s where it’s going for sure. Do
Sushant Misra of TrepTalks: you sell on marketplaces at all? Like, um, Amazon,
Dean Salakas of The Party People: eBay, et cetera. Yes, we do. Yep.
Yep. Yep. And it’s a, it’s a reasonable market for us as well. Okay.
Sushant Misra of TrepTalks: Um, can you talk a little bit about your marketing? I know, uh, at the beginning you talked a little bit about, you know, you were the first advertiser on Google and Bing and so forth. And now with more and more competitors in the marketplace, how has your marketing evolved?
And, um, how has your cost of customer acquisition changed over time and what is working now as [00:30:00] opposed to what
Dean Salakas of The Party People: was working in the past? Yeah, tough question. Again, I could talk all day. Since we’ve been online so long, it’s changed so much over the last 20 years. But look, when we launched online in Google in 2003, Um, they, it was one cent a click, you know, I mean, people listening to this will freak out when they hear that.
Um, so it really wasn’t difficult to market. It was like market to everything we could, even things that we didn’t sell with market to, it was so cheap. Um, so back then it was very different, you know, now we’re looking at much, much higher cost to advertise. It’s a saturated market. Um, many competitors willing to lose money to, to get market share.
So it makes it very difficult. I mean, our approach has always been more of one of consistency of a business model that’s profitable. Um, so we don’t chase volume, we chase profit. And so, you know, we have a formula that works for us in terms of our advertising budget and spending and conversion rates. And, you know, we do all the math to make [00:31:00] sure that everything’s paying a profit.
Um, which I can tell for sure that. Some competitors in my category or not. And as a result, um, yeah, they might be getting the volume, but they also, I mean, the obvious, the obvious, um, the obvious statistic is when you see how often they appear in the top position, those, those guys that advertise in the top position, as an example, like you, they might appear in the top position, but they only appear there 5% of the time because their budget caps out.
Um, which means it’s not profitable, you know, where for us, we appear in that average of around position three, I would say, um, but we appear like 95, 98% of the time. Um, and that’s just because our formula works. So we’re just happy with position three. I look, I’d love to be position one on every, every keyword that we advertise on or every social campaign we run.
But at the end of the day. It’s not profitable. So we don’t want to, we don’t want to do that. Um, so we’re happy to sit in the position that actually is profitable. And that’s, I think, have been another sort of key to our longevity, is that we’ve always run a profitable business and always chase [00:32:00] profit over, you know, we just have no desire to chase sales, only, only a desire to chase profit.
Um, Yeah, I think that’s, that’s one thing in terms of how it’s changed, obviously, like over the time, social media, um, has become a bit of a factor. Look, for me, it’s a bit easier to say this as I’m bigger, but a startup would have a little bit more of a challenge negotiating the difference between building a brand versus building, um, you know, focusing on conversion.
Um, you know, we’ve We, when we first started growing online, our focus was conversion only, um, you know, more recently we do focus a little bit more on brand and some, you know, he doing this podcast with you as one example, but, um, you know, we definitely focus on Brandon and some money goes towards the brand because there is a, um, an understanding of, uh, you know, a payback over time.
So. Look, it’s very, again, very difficult question because marketing is a very complicated area today than it was when there was only yellow pages for us 30 years ago. But, [00:33:00] um, yeah, I mean, we advertise in a lot of places and again, it’s just about making sure that everything meets that formula, whether it’s email marketing or social media, or even just marketplaces.
I look at marketplaces more than advertising, more of a marketing play than a, um, than, than a volume play, you know, and I think. You know, keeping that in mind and making sure that everything hits that formula. I mean, marketplaces back to that, like, I mean, it costs us, you know, a percentage to give the marketplace money to advertise that product, which means that to me, that’s an advertising spend to pay their fee.
Um, so, you know, just, just making sure that everything is profitable is, is, is a key factor in terms of marketing for us. And we’re, we’re in a lot of places, um, whether it be social. Search email marketing. I don’t know what else there is. We’re doing a few other things. Marketplaces. Um, yeah, I mean, when you talk social, it’s again a very deep topic, whether it’s posting on groups, whether it’s how you manage your page and [00:34:00] what you’re posting on your pages.
Um, all those things are slightly separate factors.
Sushant Misra of TrepTalks: Um. In the last 25 years, I’m sure, I mean, you probably do have a certain level of brand recognition in the Australian market. Do you do some sort of a study to kind of measure, uh, uh, that brand recognition and, and, uh, what benefit it brings to your business?
Because I’m sure, you know, people who recognize your brand, you know, That kind of sales to your marketing dollar, right? They see your ad and they know, yes, there’s a certain trust there. There’s a certain brand value. So they can click on your website and come and shop.
Dean Salakas of The Party People: What do you do? We don’t do anything to measure it.
Um, we don’t look out for it. I mean, we’ve been around so long and in Australia. We’re quite well known. Um, look, it’s very rare. I mentioned someone where I’m from and [00:35:00] they don’t know the company. It almost never happens here in Australia. Um, most people say, Oh, I’ve heard of you guys before, even if they don’t use us or haven’t used us, they still have heard of it.
Um, we do a lot of PR, a lot of brand marketing, if you want to call it. Um, So I mean, we appeared on Shark Tank, uh, quite a Shark Tank season one here in Australia as an example, and a few million people in the country saw that, which is given we only 30 million people is quite a large percentage of the population has seen me on Shark Tank.
So, yeah, we’ve, we’ve, we’ve got some pretty good, um, brand recognition here in the local market. So
Sushant Misra of TrepTalks: what was the rationale behind going to Shark Tank? Was it really purely just for the views or how did you, how did you end up, uh, on Shark Tank?
Dean Salakas of The Party People: Yeah, no, that was that was good fun. I mean, we were interested in raising at the time.
In hindsight, we probably wouldn’t have been able to raise. But at the time, you know, the rationale was to try to raise some money and we received an offer and we turned it down because we didn’t think it [00:36:00] was good enough. But, um, you know, I guess. Yeah, look, as a mark, look, I mean, definitely there was some thoughts that there would be some, some, some marketing out of it for sure.
I didn’t realize it would be as big as it was. Um, you know, over a million people saw the first run of the, the, that it went and then it reran three times and now it’s still up there on YouTube. Um, it’s still getting views by the day. So, um, yeah, it’s been, it’s, it was a great marketing exercise as well as, yeah, we thought we’d raise capital.
I’d say in hindsight, we wouldn’t have got it done with what we’re expecting from the show, but, you know, we were a bit naive at that point was quite many years ago.
Sushant Misra of TrepTalks: Awesome. Um, can you tell, talk a little bit about your team? I know you mentioned that, you know, when your parents were running the business, they only had one person.
Um, and you shared, you know, You and your, your brother kind of manage different areas [00:37:00] of business operations versus you’re more of a business person. Um, how has your team evolved and, um, what part, what area of the, or your, of your team is, you know, it’s, it’s, it’s the biggest, is it really the marketing? Is it operations?
Is it, um, you know, the store management?
Dean Salakas of The Party People: Yeah, definitely the operations, which is what I’d rather managers is the biggest component of the team. He’s got, you know, I think something like 30 something of the 40 staff within the company report somewhere through to him. Um, he has, he has 1 person that reports to him technically, but obviously he’s, he’s quite heavily involved in what happens below that.
So, um. Yeah, that’s that’s the bigger part of the team is operations. I’m support if you want to call it that everything that’s not operations is the easiest way to explain it. Um, so, you know, finance, marketing. Um, e commerce, that, that growth, that all sort of comes through me. Um, so the division of responsibility is quite, quite clear.[00:38:00]
Um, yeah, obviously with a bigger team, with my team, they report directly to me, each of them. So, um, none of my team really manage anyone. So I manage them directly. I mean, you know, my accounting and finance team have some people under them. But, you know, otherwise most people report directly to me. So I have more direct contact with my team.
I mean, my brother in operations, you know, he’s an operations manager, yes, store managers, um, underneath that is the, you know, the people that execute and, um, yeah, it’s very different, very different set of management that, that happens between us and, and team building, um, very different type of team. I mean, I’ve got a support team, which, uh, if you want to call it head office type team, which, you know, half of them work from home.
Some of them work from different stores on different days. It’s a very different, flexible, um, remote style of, um, team I have. Um, and I, I say some regularly, I say some hardly at all. Um, like my e commerce [00:39:00] guy, I hardly see him. I might see him once a year, once a year, maybe twice a year. Um. But, you know, and then my buyer and my inventory manager, I see almost every week.
So, you know, it’s very different style for me with him, you know, he’s managing operations. So it’s much more, um, hands on with the senior team. And then, you know, they’re rolling stuff out to the local team and then he’s trying to get out there and see what’s actually happening and try to make sure he understands what’s happening from a business point of view.
So that when I come up with these fun projects that I come up with, um, from a growth perspective that he’s, you know, got his finger on the pulse that can help. Make sure that I don’t destroy the business in the process of trying to grow it, essentially, I think that’s a
Sushant Misra of TrepTalks: that’s a good partnership. Um, you know, someone who can actually see the business at a higher level and someone who is actually managing the business.
Is your marketing, is it in house? I mean, it seems like if you only have one person or are you working with like agencies who kind of execute your marketing?
Dean Salakas of The Party People: No, it’s all in [00:40:00] house. Um, I mean, with, with people like Google and things like that, you do have account managers at Google. Um, so, you know, we do have some support from the service provider.
Um, but yeah, it’s all in house at the moment. Something we’ve looked at agency, but I just, I just, I just struggle with the agency model, to be honest, in how you, you pay someone that you’re trying to be competitive on something that’s already marginally squeezed in terms of outcome. Um, and to have to pay someone in between is very difficult.
Sushant Misra of TrepTalks: Yeah, for sure. I mean, yeah, agency that’s like for some businesses where some for other businesses doesn’t and it’s, uh, yeah, it’s definitely very challenging, uh, relationship and topics, um, in terms of your, I mean, e commerce business, the big challenge is, of course, the fulfillment aspect of it, right? It’s like, especially with the kind of product that you’re selling, which is kind of like the low, you know, Value [00:41:00] kind of items, right?
Are you, um, I’m assuming you charge the customer, uh, the shipping expenses, right? Um, can you talk a little bit about your, uh, fulfillment and logistic and, um, And how does everything run in your business?
Dean Salakas of The Party People: It’s a good question you’re asking. Look, it’s very, it’s very much a moving target right now. Um, we currently fulfill in house from store and we also fulfill from a 3PL.
Um, we fulfill our website volume from store because our average order basket is quite big. Um, you know, customer comes in and having a frozen party or a. Disney princess party or whatever it is, they buy, you know, an average of 15 items and they put in their basket and they check out for an average of about 100 with a marketplace.
The average basket is about 1 to 1. 5 or something like that, depending on the marketplace. So the average person basically buys one thing, [00:42:00] um, and. You know, we’re talking about orders that are averaging around 20 to 30, um, very hard to make money for us without the way we operate. Um, so as we see it, you know, we, we’ve got a level of competitive advantage to be able to pick large baskets, but, um, we don’t have the sufficient, yeah, we can’t beat an automated warehouse.
Um, to pick individual SKUs for individual orders. So, you know, we leave that to the 3PL because they’re, they’re not, what they charge us is less than what we can do in house. Um, but, you know, we figured out that we can pick in house much more efficiently than the 3PL will charge us. So, we keep that volume.
Um, but it is changing. We are looking at, at, you know, some automation and processes that we can bring in house, um, to make us. Competitive with a 3PL in terms of cost to pick. Um, and if that is the case, then we will, we’ll bring it in house because obviously from our owning the customer and the service point of view, we, as much as we can have in house, the better.[00:43:00]
Do you, uh,
Sushant Misra of TrepTalks: in this business, is there, um, do you have a returns policy and do you, is there a big return? Um,
Dean Salakas of The Party People: no, not much. No, no, no. Very small. Very small.
Sushant Misra of TrepTalks: So, so you do charge the customer for the shipping for the
Dean Salakas of The Party People: most part, right? We do. We don’t have a free shipping option, actually, which some people think is crazy, but in my industry, it’s, um, It seems to work, work for us again.
Like I mentioned, you know, we chase profit, not not sales. So, I mean, you’re definitely having free shipping would increase ourselves, but I can’t do the math on how free shipping would be a profitable decision for us, given how much. You know, as an example, I think if we give up free shipping, you know, for every 100, 000 of shipping, we recover, you know, we still have to generate a million dollars more in sales, um, which I just don’t, I, I just can’t see that happening.
We’d have to offer [00:44:00] free shipping, and I just don’t see that being the outcome. Okay. Um,
Sushant Misra of TrepTalks: given that now you have a certain level of skill, um, and you know, customer base, do you ever think about, um, diversifying your business or adding another, you know, uh, another website with a different, you know, Kind of, um, adjacent product offering or maybe adding other categories.
Um, how do you see your, your business evolving in the future? And, you know, let’s say five years down the road. Do you still want to continue focusing on the same exact products, same business and really just getting more customers in the Australian market? Or do you, are you thinking about like, uh, Diversifying or changing your business in any way?
Dean Salakas of The Party People: Yeah, it’s a challenging question. I’d say, look, we’re [00:45:00] always looking at the way we change our business. A hundred percent, you know, it’s, it’s involved. It’s an evolving business at the moment, and it’s really hard to say it’s very, it’s a very much a subjective decision that we make ongoing on different aspects of the business, whether they’re core business or.
Peripheral and whether we need to focus. So, you know, often we’re asking ourselves the question about whether we should be, um, cutting something because we should be focusing more on other parts of our business. And, um, you know, as entrepreneurs, we’re very guilty of new ideas being exciting and we ask.
You know, being excited and pumped and having the desire to do them, but then, you know, given a few days and a few conversations, we start realizing that they potentially, and given our experience of, we’ve tried so many things over the years that, you know, the question always comes up, is this going to be a distraction for us?
And, um, if the answer is yes, like a great example is, um, pop up stores. We did a Halloween pop up store with Halloween Alley there in Canada. [00:46:00] Um, we did a JV with them and, and did some pop-up stores here in Australia. They, they, they were good and they were, they were a fantastic business for us, and they, they were working really well.
Um, COVID, to be honest, killed that business. Um, because we, we just got the model right just before Covid and then Covid came along and, um, meant that we couldn’t do it for three years. Um, now we’re at the stage whether we wanna ask ourselves, do we wanna restart that business model? And, um, the amount of energy and strategic.
Um, distraction that it would create for now. The answer is no. Um, as much as we would really like to, I don’t know, we would benefit and we would make money from that venture. The answer is no, because it’s just a distraction to the core business where there’s a huge, you know, a big opportunity at lower risk.
So, um, yeah, it’s very hard to decide when, when not to do new things and, and. Yeah, I really don’t have a, have a scientific answer for you on how we make those decisions. It’s more about just going through the motions of, you know, first of all, do we [00:47:00] think this is a great idea? And quite often the answer is always, yes, how big, how, how much of a good idea?
And then usually we start looking at the risks and, um, that’s where it really gets sorted out of. You know, is this something we really, or how, how close to core business it is, you know, we often look at businesses that are completely outside our, you know, our industry and go, well, we can make that work.
We could do that, but it’s just a distraction and it’s not core business. So we, we don’t, we don’t go there, you know, it’s a really hard one to answer that one.
Sushant Misra of TrepTalks: Yeah. Yeah. I mean, um, identifying. You know, when you have something working, it’s difficult to think about, uh, risk and, you know, new things. So yeah, it’s definitely difficult.
Dean Salakas of The Party People: Um, I mean, you constantly got to ask yourself the question of what’s, what’s, what’s, you know, new things and testing. And I mean, we’re trying an augmented reality mirror, um, coming up. So, you know, we’ve ditched the, the concept of a pop up store, which obviously we’ve tried and we know works for us and still not deciding not [00:48:00] to do it.
For some reason, we’re trying this augmented reality mirror. Where people can try on costumes in a shopping center and then our e commerce will fulfill, um, you know, fulfill that order. So they stand in front of the mirror. They try on their costumes just by waving their hands and virtually tries it on them, um, on the mirror.
Some people might’ve seen these augmented reality mirrors, but, um, I believe it’s a global first to be, uh, So the mirror, you can check out on the mirror. Um, and then we’ll ship the item to your home. Once you get home from the mall, it should be there, hopefully, depending on how long you’re at the mall. Um, you know, and we’re trying something like that.
That’s a, that’s a, you know, that’s kind of a distraction in a way, but at the same time, we see huge upside, huge scale opportunity. Um, great synergy with the core business because really it’s an e commerce back end in terms of fulfillment. Um, so really it’s just about deploying mirrors with a separate team.
Um, so we’re giving it a go. I don’t know. Will it work? Will it not? I think it will. I [00:49:00] think it’s pretty cool. But, you know, we don’t know until we try and see if the business model stacks up and see what the economics are of this project. Yeah. So this Halloween, we will be, we’ll be going ahead with that and giving it a trial in one shopping center.
So that’ll be pretty fun. Maybe we’ll touch base after that. I’ll give you an update.
Sushant Misra of TrepTalks: Definitely. I mean, that sounds pretty cool, to be honest. Um, I know we’re kind of running out of time, uh, every entrepreneur has, I wanted to ask you very quickly. So your website, are you running on Shopify now or is it still kind of your custom developed site?
Dean Salakas of The Party People: No, we’ve probably redeveloped two, maybe three times over the years. Um, that still is another very old site that you see there as much as I say that it’s an old magenta one site. Oh, wow. Magento one enterprise, which is uh, no longer supported. So we are looking to migrate. Um, Sometimes soon to a to some sort of new platform.
I’m not really sure where we’ll end up We’re definitely looking [00:50:00] at platforms like shopify plus magento to big commerce I’d say they’re the they’re the front runners at the moment in terms of the ones we’re looking at. Okay.
Sushant Misra of TrepTalks: Um In every entrepreneur’s journey, there’s always mistakes made lessons learned, uh, you know during your You know, running your business, growing your business.
I mean, of course you have more than 25 years experience with this business. What has been maybe. I mean, I’m sure there’s so many things you can talk about, but
Dean Salakas of The Party People: you can say it. You can say there is 25 years of mistakes. I
Sushant Misra of TrepTalks: mean, let’s, let’s, let’s talk about it in this way, like your own journey as an entrepreneur or a business person, let’s say. Right. Um, I mean, you’ve had to grow over time to be able to, you know, uh, run a growing business. What have you, uh, what have you had to, what kind of growing experience as an entrepreneur you have had to [00:51:00] go through?
That could be people management, that could be, you know, anything. Uh, that, you know, that was kind of a learning experience that was that you were not doing before, but now you had to evolve or learn in order to become the next next level of water.
Dean Salakas of The Party People: Yeah, let’s say, um, I’ll probably go through two separate things personally and in the business.
From a business point of view, probably the biggest learning experience we had was to play. I know it sounds so fundamental, but. Um, forecasting and planning is something we didn’t do to start with. And I don’t think many small businesses really do. They just say, look, I’ll work it out as I go. That’s an entrepreneur.
That’s how your entrepreneurial brain thinks, right? It’s just like, I’ll figure it out. You know, I’ll figure it out as I go. That’s how your brain works as an entrepreneur. And you’ve really got to get out of that mindset. And you’ve got to start saying, okay, where is this business going? Uh, what do I need in the future?
And have I got it? What are the risks? What happens if we do better than I expected, which is what happened to us in the early days when we’re doing [00:52:00] 300% growth. We weren’t ready for that growth and that killed us. That hurt us big time. We had to shut down the website at points because we’re getting too many orders and it was a disaster.
You really need to start thinking ahead and planning. And it’s easy for me to say, and I think most people will probably disregard what I’m saying and then get stuck on the same, have the exact same issue. And they’ll be like, Oh, that’s what that guy was talking about. But, um, you really need to plan. You really need to forecast ahead.
And you need to stop because as an entrepreneur, you’re so busy. You’re always chasing the next thing, or you’re trying to get ahead, or just, you’re always going to be doing more than you can possibly need, and you just don’t have time for planning. You have to, if you don’t, um, you will get caught out, and that’s what happened to us a couple of times, and we learned our lesson the hard way.
Um, that’s probably from a business point of view, from a personal point of view, it’s probably on a similar tangent, which is, you know, as, as an analyst, and I’m the techie geeky guy in the, in the business, it’s very easy for me to have the blinkers on, focused on what I’m doing, which is why I can be good at doing what I’m doing is because I don’t get distracted by [00:53:00] the noise and I can, I can, I can work through a problem, um, by focusing, but that also creates blinkers that I miss what’s going on around me.
And I can be spending weeks on, you know, you. Being driven to complete something and not missing what’s actually happening in the broader business, which is where my brother comes in. So that’s why it’s great that I’ve got that, um, that yin and yang we’ve got in our business where he’ll, he’ll pull me aside and say, what are you doing?
Get your head out of the sand and have a look at what’s going on around you. And it’s like, I’m too busy right now. I can’t. He’s like, no, no, you need to stop. You need to deal with. What’s going on in the operation. You need to fix that and then come back to what you’re doing. And, you know, it’s, it’s, it’s, it seems so simple, but it is really hard to do.
It is really hard to do when you’re focused on getting things done and trying to prioritize your workload and say, well, what, you know, I guess the probably. I’ve gone the long way around, but the idea of prioritizing between the future and what you’re trying to build versus fighting the fires of today.
And it’s really hard to work out when do you stop fighting fires and start [00:54:00] building long term solutions for those fires? And at what point do you just fight the fires? You know, and that’s really hard to do when you’re, when you’re in the detail. Sometimes you really do just have to stop and fight fires until you get to a point where you can get past them and then start working on solutions to those problems.
Um, but other times, you know, It’s unfortunate to say you might as well let the business suffer, um, for a short term so that you can get that longterm solution in place. Um, and as an entrepreneur, I guess that’s the hard part of that, taking it from a one or two man operation where you’re just doing everything and you don’t need to fight any fires cause you fight them yourself and you built and you fix things yourself to having a business that has processes, procedures, and he’s running by itself.
Um, You know, you need to build processes and procedures and you need to fix them when they break too. So, you know, you’ve got to focus on the business a lot and not, and not focus on fighting fires sometimes, but other times, you know, your business will go under if you don’t fight those [00:55:00] fires. So, um, I’ve got my business partner there to kick me in the butt when I’m, uh, when I’ve got the blinkers on and make sure that I’m focusing on the right, that I realize when things are out of control.
Sushant Misra of TrepTalks: Definitely. I mean, that’s, those are some great, great, um. Lessons for any business to know as well. Now. I’m going to move on to our rapid fire segment in this segment I’m going to ask you a few quick questions and you have to answer them maybe one one word or a sentence or so So one book recommendation for entrepreneurs or business professionals
Dean Salakas of The Party People: and why?
the one minute manager It’s a good book on managing people and managing people, different people, differently. What I explained earlier around some of my people work from home and some don’t, and some I see a lot and some I don’t, that a lot of that, um, understanding has come from that
Sushant Misra of TrepTalks: book. Awesome. And innovative product or idea in the current e commerce, retail or tech landscape that you feel
Dean Salakas of The Party People: excited about.
Oh, well, definitely the old method reality is going to be a heat, I [00:56:00] reckon.
Sushant Misra of TrepTalks: For sure. Sounds like a very interesting idea. Um, a product, a business or productivity tool or software that you would recommend or a productivity
Dean Salakas of The Party People: Definitely, I reckon people have to have like a project management task management tool.
We use Asana. I know some people use Jira and other things, but I think every business needs a tool like that to help them manage. You know, it’s really, I mean, we only got a short question, but to explain why you need it would be probably another webinar. But yeah, you definitely need it to help manage your team.
And my team, since we put it in place a few years ago, it’s made things so much better internally for us. Yeah, it’s painful to get it off the ground because people just don’t have natural use want to use it and changes scary sometimes internally. But, oh man, people love it now. Our team loves it.
Sushant Misra of TrepTalks: Yeah.
Yeah. I mean, uh, so many, so many business reviews on that. It’s, it’s, uh, I mean, it comes up again and again. Um, a startup [00:57:00] or business in e commerce, retail or tech that you think is currently doing great things.
Dean Salakas of The Party People: I guess I could get back to, um, I think another start. Yeah, it’s going to go take a pretty big finish. It’s going to go take as well.
Sushant Misra of TrepTalks: Uh, a peer entrepreneur business person whom you look up to or someone who inspires you.
Dean Salakas of The Party People: Uh, one, there’s many, I would say, many, many, and I, I like, um, I like small to medium retail in my industry.
There’s one here in Australia called Julie Mather. She’s a entrepreneur that’s, um, grown an eco friendly brand and, um, just keeps, just keeps doing amazing things and I’ve just seen the journey.
Sushant Misra of TrepTalks: Awesome. Final question. Uh, best business advice that you ever received or you would give to other entrepreneurs?
Dean Salakas of The Party People: Definitely the best advice I’ve received was about personal branding. Um, was to, [00:58:00] you know, spend time focusing on your personal brand. When we first started off, I didn’t care. And most, most people do that, that, that build a business. They’re building a business. They’re not worried about their ego or their personal view of what people think of them.
And so when I started out, we were the same. We just. Wanted to kick ass and didn’t really give a shit about what people thought of us or cared or didn’t even care to be in the media. I got advice to say focus on your personal branding and build your personal brand. It’s been great for my business because now I’m out there in the media talking a lot and putting my face out there and getting in doing podcasts whenever I can.
And that’s great for business. It’s, it’s, it’s fun. You know, it’s fun to have a chat with you today and, um, it’s fun to do it and it’s good for business. You know, people who hear this podcast, hopefully some of them come and buy some products from me. You never know. Uh, obviously that’s not the, the, the main, the main driver, but, um, you know, just, just being out there as much as you can and, and shouting from the rooftops, what you do.
Telling people about it is important for your business. Uh, and, and, and I would, [00:59:00] you know, tell entrepreneurs to forget the ego. Don’t worry about people thinking it’s about your ego. Go and shout it from the rooftops and tell everyone about what you’re doing. That’s,
Sushant Misra of TrepTalks: that’s such an interesting idea. I never thought about that because a lot of business people are kind of like, they want to, they don’t want to be the face of the business.
I mean, of course, the other side of it, you know, an entrepreneur like Richard Branson, who’s kind of, you know, the, who leads, uh, you know, from personal branding and being the kind of the cheerleader of the business, but, uh, but yeah, it’s very, very interesting advice. Um, well thank you Dean. That was, uh, that was awesome.
Really enjoyed speaking with you. Thank you so much for your time today, for sharing your story, for sharing, you know, how you grew your business, you know, your, uh, entire e-commerce journey, challenges, successes, and so forth. So yeah, thank you so much again for joining me today at Trep Talk and wish you all the very best.
Dean Salakas of The Party People: Thanks so much for chatting.
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