IAM2148 – Founder Shares the Strategy Behind the Global Product Sourcing

Sebastian Herz is an electrical engineer with experience in a Fortune 500 company. In 2014, he started his first e-commerce business and soon built a second brand, selling on Amazon, Shopify, and in over a thousand retail stores in Germany.

Sebastian and his partner founded Zignify Global Product Sourcing, one of the largest sourcing companies in the e-commerce industry. They are involved in various other ventures, including an e-commerce event company and networks for sellers and service providers.

Moreover, Sebastian emphasizes the importance of understanding revenue generation and optimizing costs in business. He shares valuable insights on how his company helps clients save money by finding manufacturers worldwide and optimizing purchasing costs.

Website: Zignify Global Product Sourcing
LinkedIn:
Sebastian “The Connector” Herz
Yulia Blinova

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Sebastian Herz Teaser 00:00

We don't only look for two or three quotations, but we usually look for up to about 30 to 60 potential producers in order to get as many quotations as reasonably possible because the target is not just to find any supplier, but the needed quality and the best price for that.

Intro 00:16

Are you ready to hear business stories and learn effective ways to build relationships, generate sales, and level up your business from awesome CEOs, entrepreneurs, and founders without listening to a long, long, long interview? If so, you've come to the right place. Gresh values your time and is ready to share with you the valuable info you're in search of. This is the I AM CEO Podcast.

Gresham Harkless 00:43

Hello. Hello. Hello. This is Gresh from the I AM CEO Podcast, and I have a very special guest on the show today. I have Sebastian Herz. Sebastian, excited to have you on the show.

Sebastian Herz 00:51

Gresh, same over here. Thank you so much for the invitation. I'm honored.

Gresham Harkless 00:56

Yes. Definitely. The honor is all ours. Sebastian is doing so many phenomenal things. And before we jump in, I want to read a little bit more about some of those awesome things so you can hear more about him. And Sebastian is by a university degree in electrical engineer and stayed for 12 years with one of the Fortune 500 companies of industrial automation. In 2014, he started his first online e-commerce business with his first brand, then soon built his second brand and sells both on Amazon as well as Shopify, and also in more than a thousand big box retail stores all over Germany.

With his better half, more beautiful half, Yulia Blinova, he started building Zignify's Global Product Sourcing, one of the largest sourcing companies in the e-commerce industries, if not even the largest one by now. Besides those businesses, they are part owners and investors in e-commerce event company, help other brands to get into the media and big box retail, are building a network for e-commerce sellers as well as high intensity partnership networks for other software and service providers, for which some of the e-commerce startups call him “The Connector” of the e-commerce world. And one of the really cool things I read about Sebastian before I was preparing for this is that he's done over 2500 sales presentations, which I think is pretty awesome. But I think that we got a little bit of the taste of him being a connector.

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He's definitely somebody that leads first and is always about connecting people. So I absolutely love that. But one of the things I read is that the craziest thing that he's done was a 242-day motorcycle adventure from Singapore to Germany while building his online business and raising money for children in need. So, Sebastian, man of many talents, excited to have you on the show. Are you ready to speak to the I AM CEO community?

Sebastian Herz 02:34

Absolutely. Thank you very much.

Gresham Harkless 02:36

Perfect. Perfect. Perfect. I guess to kick everything off, I know I touched on a little bit. Let's rewind the clock, hear a little bit more on how you got started, what I call your CEO story.

Sebastian Herz 02:45

That's a good question, for sure. I guess it all started when I was still employed, and it was ABB, a world, industrial leader or a leader in industrial automation. And I went for them to China and later got another promotion to Singapore. And it was that in the end of the time in China, I had so much overtime that I got a couple weeks off. And I didn't have anything to do but going to Chinese class, finding alert learning some Chinese. But at the same time, I bothered my better half probably too much. And she said, Sebastian, listen to that podcast. And back then, it was, here's a shout out to Scott Volker, the amazing seller back then. And he told about how to sell products in Amazon. And I was like, hold on. I'm, like, right at the source here. Right? So I'm in China. I get that stuff within a day and get the first samples.

And that was the origination of at least the product businesses. And my wife, she's been doing sourcing. It means, like, finding manufacturers all over the world her whole life long already. I should not say 20 years. She always tells me it's only 19 years. That's big. I would always slap left and right, for making her older than she is. But she later asked me, like, hey, Sebastian. You're, like, so close with all those e-commerce sellers. Don't you wanna join? And we start doing sourcing for them. And I said, no, no, no. Just keep doing this on your own. I'll build my brands. You do your sourcing. And you know what? You can't ever say no to a woman. Right? So I ended up, and I'm in. That's how the big sourcing company started.

Gresham Harkless 04:14

Nice. Absolutely love that. And I definitely see why it's your better half as well too. And I'm sure she's saying, I told you so. I told you so. I told you so. And I'm glad that she was right because you're doing so many phenomenal things and being able to make an impact. Cause I think so many times, people don't understand about that sourcing part and what that entails.

Sebastian Herz 04:30

Absolutely.

Gresham Harkless 04:32

Perfect. Perfect. So I wanted to drill down a little bit more, hear a little bit more on how you're working with and serving the clients. Can you take us through what exactly you're doing at Zignify and, of course, with your other brands and how you're making that impact?

Sebastian Herz 04:43

So you probably know the phrase that the real money is made in purchasing, not in sales. For sure, you do make money in sales, but the better you buy it, the better you purchase, the better quality you have, the better payment terms. One of the big things to think about and of course, the purchasing cost for a product, the better you have on those. And there are many, many other factors, like how much bound capital do you need, how many how frequently can you purchase and how much again, capital bound, how big are the orders. And that's what we do. We find, for example, for starters or for established brands, we find manufacturers not only in China, of course, in China as well, but worldwide. And then we don't only look for two or three quotations, but we usually look for up to about 30 to 60 potential producers in order to get as many quotations as reasonably possible.

Because the target is not just to find any supplier, but they need a quality and a best price for that. And the other use case is that for the ones who have, whether it's consumer goods founders or industrial producers or machine builders or, yeah, Fortune500 industrial electronic companies. They need raw material. They need chips. They need steel. They need concrete or they need ready made products. We go in, find those manufacturers, and or optimize the purchasing cost. And that's, I think, the biggest lever for everyone. We've saved our clients no more than half a billion with a B dollars in savings. And imagine, what could you do? This is not your expenses, but it's your savings. What could you do with additional $500B? That's a lot. That's a big lever for most of the people, of course, to grow businesses further.

Gresham Harkless 06:23

Yeah. I would say 500 and 50 billion is a little bit of change that you can do some amazing things with. When have you seen in these conversations that you've had and experience that you have? When is a good point? I don't know if that's the right word to start having those conversations, to start evaluating the revenue that you're generating, seeing if there's a better way, or do you start that from the beginning and always open up those lines of communication?

Sebastian Herz 06:45

What I would suggest for anybody to say, I don't necessarily wanna sell our business, but we we're happy to teach and show and how all of this is done. So especially when it comes to sourcing to be open, to be honest, do it yourself once, twice, three times, like any other thing you do in business. Go through it on your own. Do it because you must learn it. You must get the understanding of how much effort is it, how difficult is it, what are the tripwires where you could have a problem just to even to understand us. Okay. That was a lot of work. Can I afford to hire it out to somebody to do that work for me, whether it's a new employee, or it's a freelancer, or it's a sourcing company, or if you need to continue doing this on your own? So from the very beginning, go through those things on your own. Don't, in my opinion, don't give anything out until somewhat of the effort it will be.

But when it comes to optimizing your cost, to be honest, in the very beginning, when you say, okay. I wanna see take the product, throw it against the wall, and see if it sticks, maybe not. It's you don't need to fully go in if you wanna test the market. But as soon as you see, oh my god. There's something. People are buying it. Okay. I can produce again. Alright. Let's go in, and let's start thinking there's demand. Why would I be spending more money? Focus your time, certainly, of course. What is the most important thing? I believe as a founder, especially in that stage, to focus on revenue generating activities, sales and marketing. And anything else you can put out there to say, I hire people, I get people, I ask somebody else to do it, but at the same time optimizing your cost, huge leverage straight from the beginning. As soon as you see it, you've got an idea that people want.

Gresham Harkless 08:30

Yeah. I appreciate you expanding upon that. Do you feel like that's part of your secret sauce? Just being able to connect the dots. Like, Steve Jobs said, he connect the dots looking backwards. Do you feel like your ability to see the whole there is this opportunity that people are looking for chips and look at it and find it in a different way. Do you feel like being able to bring those things together as part of your secret sauce?

Sebastian Herz 08:48

I don't think I'm a real expert in this yet, but I do believe this is a huge part of the joy of being an entrepreneur because I'm getting goosebumps here really right now. Because there are it's not happening every day. Some of those days you just sit and you feel it's like, holy cow. What if that and this actually and for example, I build partnerships for once. At the same time, those partners, I help them getting into podcasts as well or bringing them into YouTube channels or anybody else. Maybe I'll bring you a few more speakers.

At the same time, they benefit from this, which will then reflect help us and grow here. And it's like, oh my god. Yes. The joy I do believe very often is whether it's a business opportunity or a marketing opportunity or just a simple thing of understanding how things work and have effect on one another, that's a man, that money can't pay that. This is a feeling oh my god. Switch, mate. I'm a level further, so let's go. It's I do believe you can hear it in my voice. It is true pleasure.

Gresham Harkless 09:58

Yeah. Yeah. You don't sound passionate at all. Sounds very bored by doing that. And, of course, I'm just joking because I think it's so powerful. So I wanted to switch gears a little bit, and I want to ask you for what I call a CEO hack. So this could be like an Apple book or even a habit that you have. But what's something you lean on to make you more effective and efficient?

Sebastian Herz 10:15

Personal training, personal development all the time. Right now, I have to say I have a lazy time. So for some people, this may still, like, getting up at 06:00 or 06:30, maybe early for some of them. For me, this is extremely late. One of the things and when you're in the flow, I read a lot, do audiobooks a lot. I usually get up at 04:30 in the morning, put my headphones on, as beautiful headphones as you have there, and go for my morning walk, enjoy a sunrise like beautiful right now at this time of the year, and just focus no running, but focusing on this, and worst case, taking my telephone out and taking the notes of what I'm learning every single day. Again, there will be times there are ups and there are downs. I think one of the most important things is you as a person must develop yourself and learn the next level. Don't stop where you are. One simple example is, like I said earlier, I'm an electrical engineer by university degree. I stayed 12 years somewhat an engineer. It was more sales and marketing business development.

But that means I'm really more of a doer, and I had big issues giving things away, letting others do things, trust others. And I've heard it in one of the audiobooks where it said I think it was Dan Martel, buy back your time. If others will not do a 100% of what you achieved, that's absolutely normal. But what he said in there is, like, 80% is done, that's a 100% awesome. And learning to do this, and by now, I'm getting addicted of hiring more and more people for also all the companies that we have, and building those processes on the next level of not being me the engineer anymore. My better half is the MBA, and she knows how to hire people and train them and give things away and give responsibilities. It took me years to get to the level where I am right now, and I'm by far not done. So develop, put money, focus into learning, into reading, into audiobooks, into yourself.

Gresham Harkless 12:06

Yeah. I absolutely love that. And so what would you consider to be a little bit more of what I call a CEO nugget? This is more of a word of wisdom or piece of advice. I like to say it might be something you would tell your favorite client. Or if you hop into a time machine, you might tell your younger business.

Sebastian Herz 12:18

Work with partners. Background reason is and I think I'm quite obsessed with partnership, with helping one another. Another great book, Bob Burg, The Go-Giver. And I'm chatting with Bob Burg, the author, every now and then. And I read this book, and I found this book, and I understood it. And this is part of me. Finally, I start to understand myself a lot better. It's about helping others, giving them without requesting anything in return. You will either go to sleep with a very good feeling or you will get something back in return. And implementing this to partners, helping others succeed. That's pretty much the same as sales, right? Sales is not selling. Sales is helping somebody else achieve the next level for what they need. And if you have partners who work on the same clients who do complementary services, who, if you help them succeed, don't ask for anything.

Then you will be for sure, they will want to reciprocate what you do. Back then when I was in ABB, I've seen this, and I think the number is like 400. I think they had system integrators who bought their software and their hardware and everything and implemented ABB solution. I think there was an army of 400 companies out there selling their product, making them the market leader. If you have 400 partners around you promoting you or even if it's just 10, that's 10x you. Help them as well. Work with partners. Bring them help. Bring them media exposure, social media exposure. Bring them client, and they will do the same for you. And if not, so what? You've helped somebody.

Gresham Harkless 13:54

Yeah. I mean, that's so powerful. And so I wanted to ask you now my absolute favorite question, which is the definition of what it means to be a CEO. And our goal is to have different quote unquote CEOs on this show. So Sebastian, what does being a CEO mean to you?

Sebastian Herz 14:06

By now, I do see myself that's coming actually as a I like this question. It's coming to me over the last weeks or month more and more. As in the beginning, you're building the business. In the beginning, that was with the zignified, we have about 60 or a bit more than 60 ladies in the company. And in the beginning, you do everything pretty much on your own. And then all of a sudden, you see is, hey. There's a machine running there. There's a well oiled machine getting better and better, and you're not the person doing it anymore. So to be honest, as a CEO, I become I don't wanna say the servant, but I'm becoming the support. So what we're doing is we're like the small support wheels. Maybe as a comparison on bicycle, right?

So you have the support wheels to bounce and get them straight up, and then you build systems. And I have it here on my build systems, build processes, and deliver solutions for the team. So help your team, your company, bring in the right solutions that makes their life easier. And especially, please remember, they must be happy in your company as well. Otherwise, they may leave. So being a CEO, I think, means I'm probably the hopefully, the greatest supporter of my company.

Gresham Harkless 15:17

Nice. I love that. So truly appreciate that. Of course, I appreciate your time even more. So what I wanted to do now is pass you the mic, so to speak, just to see if there's anything additional that you can let our readers and listeners know and of course, how best people get a hold of you, find a portfolio, some things you and your team are working on.

Sebastian Herz 15:32

And you can for sure reach me, I think, quite well on LinkedIn, Sebastian “The Connector” Herz with a few Chinese characters behind there, or the company itself, it's easy. It's zignify.net, and the beginning is z and end at y in the end, zignify.net. My better half, same thing, Yulia Blinova. You'll find her. I think we're most active on LinkedIn and Facebook so far.

Gresham Harkless 15:54

Awesome. Awesome. Truly appreciate that, Sebastian. Of course, to make that even easier, gonna have the links and information in the show notes as well too so that everybody can follow-up with you, connect with you, find out about all the awesome things that you're doing. I truly appreciate you for taking some time out. I hope you have a phenomenal rest of the day.

Sebastian Herz 16:08

Thank you, Gresh, for having me. And thank you, Jasper, for all the work in the background.

Outro 16:12

Thank you for listening to the I AM CEO Podcast powered by CBNation and Blue16 Media. Tune in next time and visit us at iamceo.co. I AM CEO is not just a phrase. It's a community. Be sure to follow us on social media and subscribe to our podcast on Apple Podcast, Spotify, Google Podcast, and everywhere you listen to podcasts. Subscribe and leave us a 5-star rating. This has been the I AM CEO Podcast with Gresham Harkless Jr. Thank you for listening.

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