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Eugene Ravitsky_Incremental Growth for Long-Lasting Success

Incremental Growth for Long-Lasting Success with Eugene Ravitsky, FactoryPure

November 22, 2023

Overnight success and exponential growth may sound appealing to every business owner, but incremental growth is the true key to long-lasting success. Eugene Ravitsky from FactoryPure brings his first-hand experience with growing his business. He talks to A.J. about the importance of incremental improvements, how to deliberately build your infrastructure, and why consistent check-ins with your team go a long way.

About Eugene Ravitsky:

Eugene Ravitsky is the Co-Founder and President of FactoryPure, one of the fastest-growing eCommerce companies in the United States specializing in heavy-duty items such as generators, air purifiers, and water filters. He’s the type of entrepreneur whose passion for business started early on, back when he was in fourth grade, selling fireball candy to his classmates. 

Fast forward many years, he and his brother co-founded their first business together. Even though it wasn’t an instant success, it still turned out to be a defining moment for the brothers, who persevered and eventually discovered their niche. That’s how FactoryPure was born. The company has consistently grown since then, doubling sales every year and earning a spot on the INC 5000 list for five years now.

The advantages of incremental growth in business

There’s a good reason we say that slow and steady wins the race. Incremental growth is a more effective strategy than chasing overnight spikes that skyrocket your sales. While exponential growth may sound like a dream come true to every business owner, it’s important to understand that it comes with great challenges. For instance, this kind of growth can be hard to maintain and even set your business back while you’re trying to adjust and keep up.

Incremental growth, on the other hand, is a more consistent and deliberate approach that lets you do the right things for the right reasons. It allows you to build a firm foundation, make intentional decisions, and align your business goals with your core values. In addition, as you scale up your systems gradually, you become more resilient and ready to overcome challenges as a team. Finally, incremental growth is a gift that keeps giving, given that it is sustainable over the long haul and leads to a long-standing legacy, not just an overnight triumph.

Key Insights:

  • Always be ready to pivot your business. You need to be ready to change direction if needed. Sometimes, it’s needed when there’s too much competition in your current niche, when you hit the growth ceiling, or when your customers aren’t responding to your offer as you expected. Eugene is a great example of how understanding customer preferences can help you identify a unique opportunity in the market and recognize that it’s time to pivot. (01:47)
  • Effective employee management is crucial for your growth potential. As your company grows, employee management becomes more critical and challenging because its growth depends on its employees. You need to establish clear communication channels, address issues proactively, conduct regular coaching sessions, and have consistent check-ins with your team to create a supportive environment. (06:33)
  • Take a deliberate approach to personnel expansion. This will give you a unique opportunity to engage in their training personally, understand the nuances of each team member’s personality, and tailor your management style based on individual responses. Ultimately, you will create a culture of open communication where every employee is committed to the company’s long-lasting success. (08:30)
  • Build your infrastructure proactively. Solid infrastructure is vital for a growing business because it helps lay the foundation for scalability, efficiency, and sustainability. This helps the organization handle increased demands and adapt to changes in the market, setting the stage for incremental growth and longevity. (11:32)
  • Make automation your ally. When business becomes more complex and requires more time and resources, automation can minimize the effort. It helps streamline repetitive tasks and saves a lot of time. Most importantly, it improves efficiency, a key element for managing the complexities of growth. This ultimately allows the employees to focus on more strategic and high-value activities. (13:37)

Eugene’s best advice for entrepreneurs:

“It’s like with anything else, the experience helps. So when you’ve been doing it for so long, a lot of the problems tend to be similar or at least the same, so you can see them a lot farther out. ” (06:20)

Connect with Eugene:

Resources Mentioned:

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Transcript

A.J. Lawrence: And I apologize I meant to ask you that right before. But I was kind of excited about this because Eugene and his brother started a really cool company that’s a mix of e-commerce and drop shipping called FactoryPure.

And they’re in a really great place of what they’re doing with it. But the conversation I’ve been having with Eugene is about sort of his use of Google AdWords, the type of infrastructure they’re putting in place to help grow the company. So I thought this would be really a lot of fun to dive into what it means to be growing a company.

Because we talk with experts and we have stuff, to actually have someone who’s really in the thick of building their company and what they’re doing and how they’re going about it, I think, will be a lot to learn from. So Eugene, thank you so much for being on the show today.

Eugene Ravitsky: Pleasure to be here, A.J. Thank you for having me.

A.J. Lawrence: We were just talking and like how to say this without sounding too dopey, but FactoryPure, as someone who’s now after having lived in New York city and then lived abroad for a few years, now that I have my own home, FactoryPure sells what I like to call boy toys. The types of thing that every male homeowner kind of wants to have.

The generator. I can take on the end of the world and have this. So how did you guys decide on this approach and what you’re doing, and then let’s kind of talk about your journey as an entrepreneur.

Eugene Ravitsky: So when we started out, generators weren’t actually our first step. So we initially were selling air purifiers, which is where the name FactoryPure came from.

A.J. Lawrence: Okay.

Eugene Ravitsky: So cautionary tale of boxing yourself in with the business name. But we quickly realized that air purifiers, it was a tough niche. There was a lot of competition, everybody sold the same item at the same price. So there wasn’t really a way to differentiate yourself from the 50, 60 other retailers that have been doing this for much longer than you have.

So we pivoted several times and the reason why we landed on generators at the time, it wasn’t as much competition because people didn’t really want to get into all these heavy items and a lot of the manufacturers, they want you to stock the inventory. So we had kind of like this mixed model where it’s half dropshipping and half stocking.

So we initially pivoted to refurbish products. We thought we could separate ourselves that way. And then the next step was what products do people not so much care how they look because sometimes refurbished products can be a little scratched up or dented. And the first thing that we thought of was generators.

So we figured, well, people get generators, they’re a little nicked up, nobody really cares. And that’s how we pivoted into generators. And now that’s probably about 70% of our business.

A.J. Lawrence: Was this something like you and your brother said, Oh, let’s start an e-commerce company, or was this just like, hey, this looks like a cool idea and then just kind of built up from there?

Eugene Ravitsky: So he’s seven years younger than I am. His name’s Mike. When I was in college, I some point purchased a cell phone for a girl that I was dating at the time and it ended up arriving it was a little bit scratched up. And I had taken so much time to find a good price that I figured, well, instead of returning it to the seller, maybe I can just resell it on eBay where I bought it.

And so I resold it and we made a little bit of a profit on it. And so we’ve started seeing this opportunity, we started buying cell phones little by little reselling them. Eventually we threw up a very basic website and kind of took off from there.

We were selling wholesale at some point and eventually we got into some legal trouble because the carriers at some point didn’t want you to sell their products anymore. So that business worked for a while and then it went away. And by the way, that was before Shopify and before a lot of these other platforms now that make it much easier.

So back then it was pretty hard to throw up a website and manage it. When that downfall came, we thought, well, we need to find something else to do. We wanted to keep doing the entrepreneurial journey and figure out something else, and we realized, well, we did figure out e-commerce, we figured out ads.

There’s a lot of components that we learned about and ultimately what you sell doesn’t matter as much. And so we decided just to continue on that e-commerce journey.

A.J. Lawrence: You’ve been doing this for 15 ish years, give or take, in e-commerce, phones, and then to FactoryPure. As an entrepreneur, where do you see yourself on your journey?

Eugene Ravitsky: So I don’t particularly see myself as a serial entrepreneur. I think this business has a lot more growth to do so we’re kind of in the middle of it. We’ve been growing very, very quickly, especially the last five years. A lot of personnel changes, a lot of structural changes. We have plans right now to open up another website or start another website that just sells generators to kind of focus on that niche since that’s the majority of our sales.

Still going to be running FactoryPure, but we think it’s just going to evoke a lot more trust with, especially our demographics, if we just sell generators. So we’re kind of in the middle of it where we talked about before we were developing a lot of internal software to help us as far as structurally to grow and scale.

A.J. Lawrence: That kind of growth you’re facing, how have you seen your ability as the entrepreneur behind this change adapt as you’re now growing? I mean, in a sense, it’s like that old sports thing. Does it feel like it’s getting not slower, but like when the pitch comes in, are you being able to see issues as they happen? Plan ahead? How’s your sort of ability to work on the business, not in the business, but work on the business changed?

Eugene Ravitsky: Yeah. I mean, it’s like with anything else, the experience helps. So when you’ve been doing it for so long, a lot of the problems tend to be similar, or at least the same, so you can see them a lot farther out.

And there are some that change. So as you grow and you have more employees, you have to connect with a lot of different personalities and characters. I think that the employee management is probably one of the toughest parts of it because most of the business aspects of it are very similar. They’re magnified, but they’re the same as they were five years ago. It’s just a lot more of them.

But the employees who, before I was on the front lines and now I’m not on the front lines. And so it’s easy to get disconnected if you’re not in tune with the employees. And so you want to put them in a position to succeed and you want to put them in a place where they can let you know, they can be your eyes and ears. They can let you know when there’s inconsistencies.

So what we’ve focused on a lot is having those policies, having those talks, having those coaching sessions with employees to let us recognize when there should be problems or when there should be inconsistencies. And then you have different personalities where some you need to be a little more stern with and others that the stern approach doesn’t work very well.

So that’s more what we’re managing now is the people as opposed to the business and the day-to-day tasks.

A.J. Lawrence: Even getting to that point, what helped you? Like, some of the people were coaching, some of the people were more directing, stern. How did you kind of get there?

Because I know from my experience and when I talk with a lot of entrepreneurs, first, you kind of have a process that works for you wherever you are. As I used to call it, I was very good at management by walking around. And then all of a sudden as I kept expanding, I was like, wow, I’m still doing this and it’s taking more and more of my time and less and less gets done. How do I have to adapt?

How did you kind of move and what helped you move to that more of a coaching approach to getting the team ready to be able to do the way you wanted it to be done?

Eugene Ravitsky: While we haven’t grown quickly, our personnel hasn’t as much. Even right now we have a team of 20. So we bring people on slowly and it gives us a chance to personally kind of train them or be involved in the training and see what their personality is and how they react if they make a mistake and we approach it, let’s say in a kind of a lighter playful way.

Do they correct it or do they- so to summarize, we don’t start out with the stern approach. We start out light hearted and see how they react to it and then kind of adjust. So it’s more of a guess and check with each individual person.

And then we have our operations manager so he’ll have monthly check ins with them, 30 minutes to an hour, to see how they’re feeling. Are they happy? What frustrations they have. And then our customer service manager will have those even more often, maybe every couple of weeks. So we’re small enough where we could see if somebody is off or if they’re unhappy. And really it’s just a guess and check for each individual person on how they react.

You start being nice and sometimes that gets the result out of it. Then you start to be a little less nice and it’s, it’s different for every person but you really just have to read them and you have to have those check ins because people don’t voice concerns, unless you give them a private place to do so.

They’re not generally just going to come into your office and say, I don’t like how we’re doing it. You have to really make them feel comfortable to tell you those things. And sometimes it’s unpleasant to hear those things. And so managers might stay away from that, but you have to have those tough conversations.

A.J. Lawrence: Yeah. And I think sometimes it’s like, you have to ask the question sideways. You have to ask in a way where if you ask them straightforward, are there any problems? You get kind of like, no, no. But if you ask about other things and how they’re facing, and then all of a sudden you hear something and you can get so much more. So that is really cool that you’re going through that.

And I just wanted to say one thing. You were saying, Oh, we’re not that big, 20 people. It’s like, look, 20 people, INC 500 five times, all of this. And having also been in a similar size company when we were there, it feels like it’s small because we’re comparing ourselves with the people right above us, but you’re in the top 5%, if not even higher, of business sizes in the country. It just feels so weird because we hear so much about larger companies.

Something you were saying earlier when we were chatting before the interview, you talked about the infrastructure you’re building and how it helps support some of the things was finding the time to kind of keep that focus on what you needed while also running the business. How do you decide on one, infrastructure you’re building, and how do you go about doing so?

Eugene Ravitsky: And that could be the toughest part of any business that’s growing quickly because it seems like there’s never a perfect time to do that infrastructure, because there’s always a thousand other things to do and everybody is wearing many hats.

So we took a conscientious effort, maybe just a year, a year and a half ago to really build out that infrastructure because we grew much faster than we expected. And it really was hard to find the time and resources to build that out.

So in the last year and a half, and I will kind of summarize what our pain points were. So our order volume grew very heavily. So we were having a lot more orders. And when you have a lot more orders, it’s not just sales calls. It’s also two weeks later, people were having problems. The item’s not working or it arrived damaged or whatever else it could be. So you’re not just having that initial spike of more people wanting to place orders. You’re having weeks, if not months handling returns, handling everything that goes with something that arrives not as expected.

So we didn’t really have a way for our customer service reps to be organized. We didn’t have a task manager that they use. We try to get some off the shelf task managers and they were just kind of clunky and complicated and they didn’t sync with Shopify very well. So it’s hard to have our reps, here’s an issue, let me go to this other screen and type everything out manually and then keep track of it in a certain way.

So what people were doing even up until a year ago, or even less than that, they’re just writing it down on a notebook. So if a customer calls and there’s an issue, they would write down the order number, they’d write down the issue. They would reach out to the manufacturer because a lot of times it’s dropshipped. It’s not us particularly that’s taking care of it.

We have to reach out, we have to wait for a response. So as you’d imagine, especially when it got busy, it was very difficult to manage. So that was probably our biggest pain point is the order volume as we scale.

So we hired a couple of developers in the last year that have been great and basically built out our own software that syncs with Shopify for the task management. So if we get an order and the customer service rep is at Shopify, they just have to click one button and it creates a task and it pulls all the customer information, all the order information.

They can select what the reason is. They can even email the manufacturer and the customer directly from that task manager. And then it creates like a calendar where they can push it out for two days and then it’ll alert them if something is overdue. So it makes it very easy to keep track of. So that was something that we did. We’re trying to essentially automate as many things as we can, or at least remove manual data entry.

On the Google Ads side, as you scale, there’s also a number of issues that can happen. One being sometimes for no apparent reason, your ad spend just spikes for certain products and by the time you notice it, you’ve spent hundreds, if not thousands of dollars.

It can happen and, and it could happen the other way where for whatever reason, a great selling product, just traffic goes down, maybe you’ve got undercut on price or perhaps there’s something else in the algorithm.

So we created some software too that syncs with our AdWords and it’ll alert us for one, if we’ve been undercut on price, so it’s a price scraper, but it’ll also alert us on the skew level if ad spend over like a one or two-day period spikes up and we can change that. So we can do it on a seven day period, we can do it on a month period.

So you can see, okay, these skews for whatever reason, traffic went up a few hundred percent, but conversion did not. So if they’re going in opposite directions, then we know it’s either something algorithmic that’s wrong with Google or something else, but at least we know that it’s an issue so we can go and adjust that before we’re spending hundreds, not thousands of dollars, before we figure that out. And then the other way, if we stop getting traffic for a certain item, we can go in and see why that is and correct it quickly.

A.J. Lawrence: Google suggested automations for their Google Ad platform causing problems, I can’t ever see that happen. Isn’t this like the most easiest platform ever? Really? Not.

Eugene Ravitsky: Yeah, it’s hard when interests aren’t always aligned, right? I mean, their goal is to have you spend more on ads and your goal is to have a higher conversion rate and a profitable ad spend. So it’s not 100% aligned there, obviously.

And we had that same issue with agencies. So when you use an agency to manage your ads, they just take a percentage of ad spend and they don’t really care what your conversions are. So you’re not aligned there either.

A.J. Lawrence: Back when I had my agency and then I do it sometimes take a percentage of profits above an ongoing baseline. That way the money I spend for my clients, I get back only if we make profits. But yeah, it is really hard. It’s a harder type of relationship to get something more than that basic.

If you just want easy, most of the agencies are just going to like, Hey, we make our money because we spend your money. Like anything worthwhile, you have to find that extra level where you can kind of build a logic to it and that, it’s more work.

I like how with the alerts, because I know when I talk with folks, they’re seeing their SEO goes up but their impression levels on their ad spends disappear or vice versa, or all of these things. And it just seems like there’s no real straightforward way of how they’re displaying information. They’re trying to keep it more to the system. So by having these alerts, are you going through APIs, third party tools? How are you going about creating these to gain access to the Google data?

Eugene Ravitsky: So it is an API connection between Google and our custom built platform. And then so our developers just kind of tailored the alerts and the screens and what we can toggle and see. We have over 4,000 products in Google now so if one or two of them have some issues, either spiking up or spiking down, as you can imagine, it’s going to take us probably weeks before we even figure that out.

So this just lets us organize high to low. So we can organize, okay, what are the top 10 products that have a highest percentage up or highest percentage down, and on the same screen we’re able to see if in that same time, conversion rate or revenue went up or down for that product. So if it went up as the traffic spikes, then you’re okay. That’s what you want. But if it stays the same or it goes down as their traffic spikes, then something needs to be adjusted there.

A.J. Lawrence: Since we talked about the infrastructure and so that process of incrementally getting there, you have a background in doing Google ads and then you’re starting to get your team working on it. You guys are growing in the past couple of years, when did you decide, and has this been incremental or was this like, oh, we have an internal product that does this for ads? How did this come about? How are you building it over time?

Eugene Ravitsky: So when we brought on our developers, it wasn’t particularly for anything like this. We just have our internal conversations and we discuss how can we improve things, how can we improve efficiencies.

For me, since I’m the one that manages most of the ads, I just threw out some of these kind of far out there ideas that I had that would help me not knowing if this was doable or not with that API connection.

And they told me, yeah, it should be no problem. So we created our first version of this several months ago or maybe almost a year ago. And we realized that we need those alerts. Because without the alerts, it also kind of becomes this jumbled thing where you sometimes have time to look at it, sometimes you don’t.

So every morning now I get alerts on the price cutting tool that we have. So it’ll say essentially, if we were the lowest price yesterday but we’re not today, that’s going to come up on my alert list.

There’s some products that we just can’t compete on price so there’s no reason for those to keep popping up. So it’s only if it gives us a change. So it’ll tell us if yesterday we were the lowest, but today we’re not so we can go and see maybe one of our competitors undercut us on price.

And same thing on the AdWords tool. So the first iteration, we didn’t have a custom timeframe that we can do. I think we just did maybe one day over the following day. And so we’re like, Hey, it’d be nice to have maybe look at a week at a time or even a month at a time and see.

There’s two reasons really why we have this tool. One is we want to catch in real time if something spikes or something drops. So on that, it’s good to look at that every day. But then we also want to look over a long period of time. This product sold really well last month as a whole, but this month it took a big hit or the opposite. Why is traffic going up?

So we were able to look at really any period of time that we want and so we can extract trends from it to see, and it even can help us look on a product category level that, okay, these product categories have been spiking for the last several months, so more and more people are looking for them. So whoever does our procurement or picking up brands that we sell, we can tell them, Hey, let’s take a closer look at brands within this product category.

A.J. Lawrence: That’s cool. You said something and I’m curious always about like how these events occur. When you were saying, Oh yeah, we were talking about ways we could improve, are you using a system? Do you have a learning organization? Is this part of the foundation of how to do this? Or was this just sort of like we had a meeting, Hey, what can we do? Do you follow a system like EOS or is it just was this ad hoc?

Eugene Ravitsky: Yeah. So, well, we don’t really have a system per se. Our developers use linear to keep track of all of our projects, but we have a weekly dev align meeting. And so that meeting is twofold. So one is just to discuss ongoing projects and see what state they’re in. And the second part is collectively, so it’s our developers, it’s our CFO and it’s our operations manager, our COO, collectively seeing what’s been done and how we, in our individual processes that we handle, what can be improved upon.

So we’ll basically just share what our pain points are and see if there’s a solution that we can all come up with. So that’s how we’ve come up with most of what we’ve envisioned. We didn’t bring on developers with most of these projects in mind. It’s just been, we have our weekly meetings, okay, this project is ending. What else can we do to improve on?

And then we have to kind of prioritize based on level of importance, but also based on, they’ll give us an estimation on how long the project should take. So we’ll might want to do these low hanging fruits. Okay, these maybe aren’t as important, but they can knock them out in a day or two. Let’s do that before we tackle a product project that’s going to take a month or two.

A.J. Lawrence: Yeah, l always agree. I was like, look, let’s plan for the longterm align with it but let’s go hit the low hanging fruit first because it always feels nice to get a couple of wins, even if they’re not going to be big long term. It’s nice to have that like, Hey, we just made a few extra dollars.

You said earlier, you don’t see yourself as a serial entrepreneur. The evolution was, well, okay, express was there were problems with the business model of like what you could sell so you kind of moved into more generators. You have the new site. How are you looking to define success for yourself as an entrepreneur? Because you’re, like we said, 15 plus years into this. You’re doing some really cool things. You’re being able to work with your brother.

I used to have my brother and I worked together. It was a lot of fun and then we’d both decided to go to different things. So how are you looking to define your own success? Not FactoryPure or not the other business, but your entrepreneurial success. What does that look like for you?

Eugene Ravitsky: It’s probably a couple of different ways. For one, I think something that’s given me a lot of joy and pride is coaching individual people and seeing them grow in our company and seeing them be able to make more money and provide to their families.

That’s been pleasurable to watch and we have more people that we’ve seen grow in it. It’s very, it’s gratifying for me. I think the other side too is just to me, what defines success is just to have the freedom in life to do what you want to do. So for me, that’s the freedom to keep building and growing this, which right now, I don’t see any end in sight for that.

Then I want to be able to do that and not worry about the financial aspects of it, but worry about the actual structure and the people managing, and are we better than our competitors. I think for me, it’s more of a competition than it is that I’m trying to enrich my life at this point. And if that’s going away and starting a family and doing that, I’d like to be in a position where I have the freedom to do what I want.

A.J. Lawrence: Well, it seems very much that if you’re not there, you’re pretty much close, directionally at least, just from watching it. So that is very cool.

I love that you’ve kind of talked about this, oh, it kind of happened, but it feels very deliberate, at least in listening to it so we decided to become a little bit more specific in how we talk to our people.

You had these incremental and then some big jumps, it seems. I like that approach. It seems like you’re really approaching this in a way that is going to give you the type of business and the type of journey as an entrepreneur. That will be a lot of fun. So I’m really curious to see where you go with this.

This should be a lot of fun. We’ll have to bring you back down the road and see once after the new site and the new product, you’re the generator king. We’ll come up with some phrase for it, but yeah, have to have you come back on.

I really think it’s really cool what you’re doing. What’s a good way that people in the audience can learn more about what you’re doing, learn more about FactoryPure, follow you online? How should they do that?

Eugene Ravitsky: The best way is just to go to factorypure.com. We don’t really do too much with social media right now, unfortunately. It’s probably another area of improvement, but if you’re interested, take a look at our website, take a look at our about us page and give us a call. I think one of the things that we pride ourselves on, which most of our competitors don’t do just because they’re super, super large is when you need something, if you call us, we just pick the phone up.

So you’re not pressing one for sales or two. If you call our phone number, somebody just picks up and customers tend to really like that. So we’re always available. The group of people that we have now, they’re just exceptional people who actually care and want to make your experience better. So we try to add that personal touch.

A.J. Lawrence: Alright, cool. We’ll make sure we have the website and the business on the show notes, email when we send it, and of course our socials, when we talk about this, I have to say in a couple of weeks coming out.

Eugene, thank you so much for coming on the show today. I really appreciate it.

Eugene Ravitsky: It was a pleasure, A.J. Thank you.

A.J. Lawrence: Cool. Well, hey everyone. I think there’s a lot of fun because it’s always cool to hear from an entrepreneur who is in the middle of the journey, really building a cool company. Because sometimes when we bring on people who’ve already exited, the rosy glasses, Oh, back in the day, sort of like I talk about parenting now that my kids are going off to school. I kind of look back on all when they were little and I realized, Oh my God, that was a lot of work. But I keep saying it was fun.

Going through and building up a company to where Eugene and his brother have it now is really difficult. It’s a huge success just to get where they are and they’re continuing their growth. So it’s something to like really be able to hear someone in the middle of it versus someone kind of talking from the armchair. So thank you again, Eugene. I can’t wait to have you back on.

All right, everyone. Everyone on my team always make sure to ask me to ask you, if you enjoyed today’s episode, please give us a review on your podcast listening platform of choice. That way, other people can find us and we can get other cool entrepreneurs like Eugene on the show.

So everyone, I hope you have a wonderful day. And I can’t wait to talk to you again. All right. Bye bye.

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