Curtis Matsko, founder and CEO of Portland Leather Goods - a top 50 Shopify store with over $500M in total sales. Owns the largest leather manufacturing facility in North America.
Also on YouTube: youtu.be/nckQhAvYA-Q
"We'll have done over 500 million in total sales. We'll do 310 million in the next 18 months."
Curtis Matsko went from art festivals to a top 50 Shopify store by doing everything conventional wisdom says not to do. His company controls every step from raw material procurement to customer delivery, achieving top 50 Shopify status while maintaining 50% repeat customer rates on non-consumable goods.
Today he owns the biggest leather factory in North America and has some very strong opinions about banking, business clichés, and why most Shopify owners are doing it wrong.
Most valuable insight: Meta doesn't know when you run out of inventory - they just think your ads stopped working and charge you more.
Listen now on The Unofficial Shopify Podcast.
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Kurt Elster
This episode is sponsored in part by Swim. Okay, here's a depressing stat. 70% of shoppers who want your products never actually buy them. They browse, they consider, then they forget. That's revenue walking out the door. Swim Wishless Plus turns browsers into buyers. Customers save products they want, get notified when prices drop, or items restock. You can also engage them in personalized fashion through your marketing or sales outreach. It's like having a personal shopper reminding them to come back and buy from you instead of your competitors. And 45,000 stores already use it, and it only takes five minutes to install. You could try it free today for 14 days. Go to get swim. com slash curt. That's swimwithay. com slash curt. Turn those maybe later into sales today. Get swim. com Today on the unofficial Shopify podcast, I have the honor of speaking with someone who owns a top 50 store, a store that has been on Shopify since 2017. Uh and also Uh the founder has the honor of owning the largest leather goods factory in North America as part of this. We are talking to Curtis Matsko of Portland Leather Goods, PortlandLeathergoods. com. Uh just top a top fifty Shopify store. I can't believe it. That's no easy feat. I couldn't even tell you what the top ten stores are
Curtis Matsko
I only know that because we work with every major person out there and all the conferences and all the people and everyone's just like we know You know, the people like Neil Goyo, Disco, and everything, and he's like, he goes, I know 600 of the top 1,000 Shopify orders, right? And I said, well shit, man, where are we? We've got to be in there. And he said, oh, you're you're not only just top hundred, you're top 50. And then I've had that reconfirmed by a bunch of beauty. Let me give you a little idea, Kirk, because you don't really know who I am, but you're doing great so far, is in 2017 on Black Friday, we had one sale. Uh last year we had one sale every three seconds. Yeah, average order value of 128
Kurt Elster
And I've alright, so in my notes I have this described as a two hundred million dollar brand. Is that about right? Hold on, we'll do three hundred and ten million in the next eighteen months. How did this start? You know, how did you you don't just suddenly end up with a top fifty store? Where does it begin? Take me back.
Curtis Matsko
begins with my angst of my childhood and not knowing what I wanted to do with my life and being the youngest of four boys and having a chip on my shoulder. We started, uh my girlfriend had a bad job and I said, quit your job and we'll start up a hundred million dollar e-commerce code.
Kurt Elster
It's just that easy? I know too much. I know how difficult this is.
Curtis Matsko
We started at art festivals and broke every record ever at Art Festival. We're doing $40,000 a weekend at art festivals. We went on to Etsy and became a top 10 all-time Etsy seller in 2016-17. 2017 we went on to Shopify and found that to be Actually the easy part. Uh the hard part is producing three million bags a year at the exact right bag that you need, of the right length that you need at the right price, right and have that exactly when you need it. Where you need it. That's really the logistical part. The problem that you see, because you talk to all the Shopify people, is they come in from the technical side and said, I'm looking for my ROI and my ROA and I want my new customer acquisition and we're hooking it up to these apps. The company is holistic. It's what is your cost of goods? When is that product? What is your EuroPro? What do your retention products need? What is your how deep are your SKUs? Where is everything that runs on your website how are you testing every single thing how are you compounding how are you getting the entire system better because if you know this hopefully you know this meta does not know If you have an ad that is working for three state months and you're killing it, and all of a sudden you run out of some of your SKUs. Meta does not know you ran out of skews. They think it's ad fatigue and will start taking dollars away from that and start charging you more for that particular ad. Did you know that, Kurt? No, I did not. That comes directly from Meta as I was at Meta talking to them and I'm like, come on man, you don't know this. Oh we know we know and then we talked to some of the main pro and they're like, no, we don't know We just see that it's dropping off. So the algorithm kicks you in the ass. So what most people do is they put a bunch of products on there and all of a sudden they start selling out of their top products. Why? Because people want what they want And as soon as they start running out of this thing, the algorithm starts taking down. So now your your customer cost per acquisition. goes up and you start screwing yourself. I created and I don't know if you're you can see part of our factory right here. You can see the back of my office here.
Kurt Elster
It's huge. It's really cool.
Curtis Matsko
We can have a new a product back into stock from our SETIS, which uh can have 450,000 bags here in Mexico, in five days it could be in stock in uh the United States. So if you know that you're getting low, we send a truck over, it goes over, it hits the SETIS, is put into stock, and we never have to take anything down. Now creating up the largest manufacturing and figuring out all these systems and hiring all the people and doing that, that's the difficult part. The Shopify stuff. Yeah, that's not that's not the hard part.
Kurt Elster
You have the what's described as a cult brand. You have the like serious fan loyalty here. The thing I've not heard you mention is is brand building and brand story. Okay, like the that narrative aspect to your holistic approach here, and that has to be a part of it. Like tell me about it.
Curtis Matsko
Yes and no. I'm gonna tell you two stories. Number one, uh we just opened a store in Seattle. I was just there on Saturday, okay? And I drove up an hour before the opening. And I'm telling our people, is anyone gonna be there for the grand opening? We had people lined up from the front door all the way down an entire block, looped around, came back up that same block, and then down a third block. It took five hours to get into the store if you were in the line when the store opened.
Kurt Elster
What were they waiting for to see the grand opening of the store? There's no special drop here, no limited edition item, they just wanted to see it?
Curtis Matsko
Come on, Kurt. That's called a cult following, right? And it's not what people think it is. I decided to do our brand and we decided to do this TikTok video and blah, blah, blah, blah, blah. Here's the thing. If you're on Shopify, you promise somebody and you send them something in the mail when they buy it. Is that correct? Most likely that's how it works. And when they open that baby up, they have an expectation. And that expectation is either now your expectation is usually slightly lower. Amazon has taught us that what you're going to get in the mail is actually a little bit worse than what you're going to get in the What you're expecting, right? So you kind of got this like a good movie that your friend suggests that you watch. You're like, I don't trust my friend's opinion. It's just gonna be average. The key is when they open up the box, is it better than expected? We're going to spend $40 million in online advertising the share. And the number one way that people hear about our product is their friends and their family.
Kurt Elster
Hmm.
Curtis Matsko
So I didn't have to build the brand. I built the great stinking product that people love and they want to come back. I think that people Don't understand Shopify to the depth that you need to understand to be successful. We have a 28-person team that runs our marketing. And there's like, well, I hired an agency and they're putting ads out on Meta and I'm getting uh black, blah, blah. Yeah, that ain't it. Uh we have an entire photography team, we have an entire graphic artist team, we have an entire social media team. We have six people that are on Shopify every single day cleaning every single thing about it. We have uh A-B testing going on constantly. fixturing the smallest little things because it is compounding. It is compounding in the world. If you take two physical stores and you put them next to each other, And one is great and one sucks, maybe, maybe the great one will do ten times more than the than the crappy one, right? But there's still gonna be a little bit of a variance. If I can beat somebody 0. 01 on the computer and then continue to do this, I can make a hundred thousand times more than they do off of their Shopify store. So it's stacking up those little 0. 001s, 0. 002s, and having that team clean it, get better and better and better and better and better at the end of the year. We always do two-thirds of our money in the second half of the year, one third in the beginning half of the year. year. Everyone's like, that must be for Christmas. Christmas is nice. It's not. So we get better. We have new products. We have new hero products. We have new ad sets. We do this. We're testing. All of a sudden June, July, which always suck. We're going into August. We've learned from the first seven months. Now we're doing things that are more successful. Then you get your steam in September. Then you build up the pipeline in October. Bam, bam, bam. Then you hit to the end of the year and every year, every single year, we're twice as much in the second half of the year that we are at the first because we're getting better. Most people are like, well, I told my agency to spend more money on Meta. Well, good luck.
Kurt Elster
We're building internal teams. We're looking for constant iterative incremental improvement. Derisive about key performance indicators, ROI, ROAS, et cetera. What are there any KPIs we do like And so I my KPIs are a thousand different KPIs.
Curtis Matsko
But RLI and RLA ain't it, right? We work Mr. We work AMER. We work a lot. I give them a budget. I say if for every hundred million dollars that I bring in in gross revenue, why gross revenue and not net revenue? Because advertisers hate They say, hey, someone took the credit card and they paid for it. So that's a win for me. So that's what I get. I say, great. You to do $100 million, I'll give you $23 million to do that. You have a 23%. Now they have to choose what where that dollars go in the right way. And that's just the very start of it. They have got to work on retention. On our website this year, if I went pulled it up in triple well, Uh, it would say that I'm about 50% return customers, 50% new customer acquisition.
Kurt Elster
That's really good. Because you don't have It's not a consumable good. You know, that those kinds of numbers you would expect with something like coffee, golf balls, but with this, you know, a very durable item.
Curtis Matsko
Yeah, absolutely. So what that basically boils down to is I only have to sp spend 3% of my money on the return customers. In advertising. Now I spend more and it has to average out at 23 because that's at the end of the year that's where your profit is because as long as we hit that, we hit our market. But that doesn't mean that all we do is put out money to new customers. I'm creating new products. Those new products are for new customers, but the vast majority for return customers. I know that the first two bags someone's going to buy are not these other bags that our return customers should buy. But I'm still producing those in lower numbers and we're coming out with that. We had a hundred our 1930 new variants last year. We're gonna have over 3,000 this year that we design, sample, create, photograph, put online, make the SKUs, send it to the shipping, ship it out, do do returns. Do customer service and have our people own that. Why? Because it's just sheer profit on your retail customers.
Kurt Elster
Tell me about I want to know about this product development lifecycle. I want to know about your catalog. How big is this catalog? You know, how often are we retiring things, adding things? Where do we get the ideas from? You know, it's tough to keep that treadmill going of you know not new novel product releases.
Curtis Matsko
But the people who are watching can actually see that I'm in my office here in Mexico, okay? And if you look around this, you go around here and you look out to this big manufacturing. Now everybody thinks that's the key. That's not the key. The real key is over here. That is tables of the designs we have coming out in the next couple months. Next to me here are graphic designers. Designers, people doing samples, and all the new products that we have coming out. We have that planned out through February of next year So that is a constant process of lots and lots of people creating things. So they bring me thousands and thousands of ideas. So many different leather colors, leather types, leather thicknesses, new samples, offshoots, everything. And we're putting that into the system, coming up with numbers, testing that at constant time. I couldn't just buy this crap from the Philippines or Vietnam or China and expect for me to do it because I know how a manufacturing works. And they would say, we don't want to make $2,000 of this bank. as a one-off. We're only profitable if we can make twenty thousand. So we only want the ones that you want a lot of. But it's gonna take them nine months to make that, right? So you're I'm gonna put a PO in before I know what the people want, and all of a sudden in six months I'm gonna get it off of a thing and I'm gonna my people are gonna try to sell it. It's gonna be the wrong bag I can make the right bag that we need off of data that I run this week and have it there in a month in Dallas, Texas, because I'm using new data, not data off of the past. I'm creating the perfect marketing plan, not taking what we did in the class and multiplying it by two. There's a huge difference in how that all connects up and goes together. So yes, now here's the thing. I'm a marketing guy. We're a marketing company. The guy who runs it, uh, McCoy Merkley, is the best marketer out there in the business today. Talk to anybody that knows anything about it, they will know who McCoy Merkley is. And the guy is just spectacular We talk eight times a day because marketing and production and design and planning and logistics all work together. And if you try to separate 'em, you have a problem.
Kurt Elster
And you know, this a lot of what powers that I imagine is you've taken this vertically integrated approach where you know you are starting at the raw material, the raw hide, and then you know, going from there. Once you've got that rawhide, then you know eventually that is going to turn into dollars at the end of the day.
Curtis Matsko
I didn't choose to be vertically integrated. I did it because I found I could do each step better than somebody else and more efficiently to create an end product that was gonna scale better, right? So I don't wanna buy the rawhides. I don't want to. I want the tannery to buy them. But I can't trust the tannery to actually buy them because they could buy some good ones and some bad and mix them all together and then cover them up and deliver them saying, hey guys, these aren't as good as I thought they were. But they'll say, oh no, the O is a bad batch. No, no, no. I bought you the truck. I brought it. I paid for the truck. Here it is. Use these hides. Now there's no way to go against that because we have controlled that system. Most of the stuff that I've done is just I figured out we can do it better and more efficiently. and create more profitability and scalability in the system by controlling something that I now I like paying people to do things. There are some great agencies out there that can do A B testing that we use Right? So we're using the AG agency to do. Now we've used five of them and three of them absolutely suck. And we got rid of them. And two are good. So rather than hire the employees, train the employees, have the computers set up, do all of that infrastructure of everything that we do, we have them work with our six-person web team. that does just the website itself and they're always testing at all times the new things to just slowly get better over time. I had a, I was renting a place in a building. And I had an SEO guy. Best SEO guy in the world. Kurt, do you know how you know if someone's the best SEO guy in the world for Google?
Kurt Elster
No, how do you find the SEO unicorns?
Curtis Matsko
You type in SEO expert into Google and see who comes up number one.
Kurt Elster
But the cobblest children have no shoes.
Curtis Matsko
Uh I found the guy. Uh it just so happens that his wife knew who I was because she went to my high school in Montana. He happened to be in Portland at the time. He came over. He did a bunch of analysis for three weeks and said People, Google loves you. Like they love you. And I don't know why. You're this is when we were small. He said, pay me this much per month, and you'll need to have four of these buildings in the future. And you don't see that in the first month and you don't see it in the six months. You see it that the guy has been working on that for sixty-seven years. Every single day. Well not every day. He's Aaron's a little lazy. Every single month, every quarter, every year, and what anyone who starts tries right now and says, okay, we're gonna start building up and compete against these guys, hey, I got a six-year head start just on SEO.
Kurt Elster
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Curtis Matsko
You have to spend more time in where you're going than where you are. And that's employees. So they're just like, hey, hire somebody and give me an expert to take care of this. And you're like, okay, yeah, odds are Uh if it's a guy, he's overconfident and can't do half of what they really say they're going to do. If they're a talented woman, they're better than they think they are, and they got a chip on their shoulder and they're working to prove it, but you need to build their confidence. And the the overconfident guy, you have to do this. You have to like them. You have to be able to want to communicate them. They have to be able to talk with everybody else. They have to be a person who will expand to fill the role that is coming to them and not just where they are.
Kurt Elster
What stands out? What are you looking for other that like I enjoy that you you called out the gender gap in how people present experience? Cause there's studies that show this is true. Men will all will almost always overestimate themselves and women will underestimate themselves. And like we're just conditioned to do it.
Curtis Matsko
And both of those are amazing attributes, right? I know a lot of guys who are successful, not because they're any good, but they're overconfident. And it's been successful for that. Like, um, congratulations. Uh like that's awesome. Doesn't mean they're really, really good at what they do. Uh and the the women can do this. It's just I call that out because most of my top people are women in my company. And I never have to motivate them because they're always motivated themselves. They always think they're making mistakes. All I have to do is say, you're doing great. You're doing great. Keep it going. It's okay. You're going good. Other guys I have to say, oh gosh. Literally, you know, I've golfed with you. You couldn't beat Tiger Woods. I mean, I'm sorry. Like you really like just come on. I just Guys have that, but that's both of that's their strengths. And in everything, we're balancing people out. You're not going to find the perfect employee. You're going to find people who had struggles but were not broken by those struggles. And that that became a strength that they're going to have. And then you lassoed it together in a team and then you built that around which you're going to do. Just here in Mexico, I have 1,177 employees. So gives you a little bit of a clue of now I didn't interview all of those. But those teams are important. Right this week we're probably letting some people go 'cause when you're that size, you do. And I always say, sorry, you don't get to be a jerk. You don't get to be an asshole and stay working with this because you're surrounded by people and you're making it worshipment. You we are always upgrading our talent. I'm a big uh sports fan, and there's no sports team that ever said, gosh, Kyle, I just really like all you guys. I know you're not very good, but I just love this team and it's okay if we lose all our games. It's not. You upgrade talent if you want to win. And we're always upgrading our talent.
Kurt Elster
If I had a top 50 Shopify store and it had the size and scale that you had I would have to believe that people have tried to buy it from you. Just because you could, yeah, I could use a tool like Store Leads and figure out what the top 100 Shopify stores are. Like I what you've had offers, haven't you? Yes. And at that level, they gotta be pretty good. Have you thought about it?
Curtis Matsko
We've never sought it out. Uh but four years ago, uh, when we were small, I had somebody come in, meet with me a couple times and offer us $83 million. And I ripped them apart. I I I almost made this amazing woman cry by telling her how insulting it was that she took this company that was doing 30 million and offering me 83 for it. We were not as good as we were now. Now, since then they've gotten on a plane and flown down and visited us here and said, hey, you're still investable and we still are interested. And what I say, Kurt, is, why would I sell? We're ridiculously profitable. We have a cult following. Uh I tell about that story in Seattle. I went there and everybody in that line knew who I was and said hi and wanted pictures. with me and told me I was awesome and I could walk around and feel good for a month on that, all right? And we have nine more stores opening this year.
Kurt Elster
Sounds like you're having fun.
Curtis Matsko
We have a lot of fun. The thing is, uh, we're gonna increase our uh EBIT by over fifteen million this year. So why would I sell? Why would I give it to somebody else?
Kurt Elster
I mean it's your baby. I imagine it would be tough to let it go and watch someone else run it. Cause if they don't do it right, you're like, man, they're ruining my baby. If they do it really well, you're like, well, I should have done that. Yeah, but that I don't think so.
Curtis Matsko
Uh what you don't know is I did not do this because I had a passion for leather. I did this because I told my girlfriend I wanted to create a company and she said, what are we going to make? And we chose this. And now that I'm really good at it, I love it. But there's a lot of other things I could do with. Right? I have many passions and many fun things. And once you do it, I can move into anything and I'll be totally excited about what that is. And then I'll try to control all that too So you don't just do one thing and you become successful and say, that's my one thing and that's my baby. You are a person. Who can do this? And that's who you are and that's how driven you are. So it doesn't matter what you're doing. You move on to the next thing. Now, do I want to build another one of these? That's a lot of work. But I might take a different approach. It's something I do in the future. I've still got a lot of years. I got a lot of fun things I could do in the future.
Kurt Elster
We're having fun. We're very successful, profitable. No reason to leave it or sell it. But it it can't be all good times. I want to know when this was hard for you. What was, you know, a tough decision, a wrong decision.
Curtis Matsko
Sure. Uh there is a bank uh that is known as the worst bank in the world. I have not proven this. I have a deep conspiracy theory that they're all evil demons. And they're not real people and in there they rhyme with Bell's Hargo. And uh I'm st I'm still not following. Yeah, exactly. I have no idea And when I started my company, I walked across from my house two blocks and set up an account. We worked with them and we did full audits. We did everything. We worked with their teams as they had vice president after vice president come into my company and promise me every Including a $25 million line that was promised to us for over a year. We were meeting with them and signing the papers the next week. And a bank a couple years ago in San Francisco, I'm sorry, in San Jose went out of business if you remember that that clash of that, the bank that went out. And all of a sudden the CEO of Wells Fargo came out and said, hey everybody. We've decided to change how we're doing it and then we want to suck all this money we want out back into the company and now the money we promised you Year after year after year with all those people where I have bought tens of millions of dollars of leather and products an entire Lu company that's already done $35 million and is kicking ass. We're not only yanking that, we're yanking everything you have and we want you to redo everything. So all of a sudden you're in a debt crisis with somebody who took control literally because the CEO got scared because they were doing stupid shit. So you lost your line of credit? Yes.
Kurt Elster
Oh jeez.
Curtis Matsko
Everything. Not only that, they started taking money out of our bank account. When we would make the sale, they would say, We're worried about you paying us back. We're gonna take the money right now. We wouldn't even touch it. Are you kidding me? Are you kidding me? We've got twelve million in POs of shoes that are arriving. We did thirty-five million dollars in shoe sales in 18 months and I had to shut the company down. No, I'm not bitter about these guys, because yes, they are assholes. And yes, I do not like them. And yes, if you currently have a bank account with them. They're probably not stealing that much, so don't worry about that. You know, if you have a big business with them, I would move to some place else where the whims of this person All financials, all bankers run off of numbers and Excel sheets and computers, and they do not make judgments. Okay? They literally said, hey, We've taken all this money back. We've taken it. You have this thing. Well, you could probably get a couple million dollars for your company. Why don't you sell it and give that money to us? Wells Fargo said that to us.
Kurt Elster
I they would not be my bank anymore after that.
Curtis Matsko
A year after we were offered eighty three million for it. Was that bad? Yes. What did that allow us to do? It allowed us to say we will never be dependent on a bank like that again. So we will trim light down. If that product is not a great capture hero product with a great LDD and a great SKU, we will drop these, we will keep these, we will set, we tighten everything up, we became so much more profitable so that we don't have to worry about any of these jerks coming in and doing any of that stuff. And then when all the tariff things hit, I was at a a big meeting in LA, probably about forty or fifty nine figure founders. And one of the guys said, how many of you are having a great year? And me and Caden Lane, it's a company out of San Antonio, uh raised our hands. And everybody else was having a crappy year because of logistical problems created by an insane president who thinks that tariffs are Not a tax.
Kurt Elster
Yeah, paid for by someone else. Oh yeah, yeah, yeah, yes.
Curtis Matsko
It is. It's it will be paid for because they used that promise of money to put four trillion more down on debt, right? That's it's all little shell game play. So when that happened, everybody's supply line I mean, hey, they just hit us again. Here's a thirty percent tariff. on everything from Mexico by August 1st. That was just thrown out last week. Now we'll see what happens. We'll see if if he you know backs out of everything and it's just stupid words again. If if the thirty percent tariff stayed on, it would personally cost me thirty million dollars a year. So let's hope that it doesn't happen that way. But it would destroy the economy, it would cost everybody else more. When we avoided the tariffs the first time around, Kurt. Everyone ran to my office. We had people. We're looking to read it. We had people all over in Cap Hill and Texas, everybody. And they're like, we avoided the tariffs. They said, are you happy? And I said, no. Because this is going to cost us tens of millions of dollars in a deflated economy because of the tariffs are going to hit everybody else and it's going to create all kinds of problems. It's going to create inflation. It's going to place supply chain legit Doing logistics in a global economy is still the margins with expensive money, are so careful. When you know what's gonna happen in a year, when you won't know what's gonna happen next week, you cannot make choices.
Kurt Elster
We can't plan for it.
Curtis Matsko
It is complex beyond belief. And I then I realized why we're in this situation. Kurt, would you like to hear why we're in this situation? I would love to. I am dealing with setting up retail stores. And when you deal with a retail store, it seems like a really interesting thing. You're dealing with one of the big brokers at a big mall or a big lifestyle center and they say we have 2,000 square foot. Here's what the cost of that is, right? And you say, well, I'd rather pay you this, and they say, great, let's do that. Okay? There's our deal. These are commercial real estate people. You are now six months away from having a signed lease, at least Because then they will send you contract after contract, and they look at it as an A-B game, right? If we give if they give us something They don't get it. So every line and read out they can change for one little this or maybe this or everything, right? Because that's their only game. Their only game in commercial real estate is the contract, right? Other than that, they just sit back for five to ten years or whatever it is, right? So that's their control. And they're like It's a good deal. They want to accept it. Then we need more. We need to push them and we need to push them and we need to push them, right? We've had some of these literally go for nine months. We signed the contract. They signed the contract and they came a week later and said we'd like to change that up.
Kurt Elster
Yeah, sorry.
Curtis Matsko
It's signed. Wait, it's signed, but wait, what will they do? Yes, but we have we own eighty-two other areas across the country. And if you don't play ball with us, uh hint hint, recognizing anything from the commercial real estate that is called transaction. If you get something, I don't get it. I know in business, Kurt, that if you have a great relationship, you both succeed. Hey, let us in. We'll be in six months earlier. We'll have a store. People love it. They'll line up. They'll come. Everybody in your mall. The square footage will go up and you can charge more rent to everybody else in the future because you'll be a mall that's not going out of business. But they don't think about going out of business, they think about that one deal and that one contract, and can they move that period to do better, right? If you take that attitude to the complexity of the international business and put that into tariffs plus tax policy plus international policy plus military policy, and you say it's all about the transaction. What can I get today? They'll say, screw you, and go, and Canada will start setting to buy things from Great Britain or from China because they have to make a decision. And decisions in business are about reliability. Why do I use Shopify? They make it easy for me just to say, yeah, yeah, they're screwing me over on some of this stuff, right? I really wish I could hook up my own bank account, my own merchant account, cut that fee down. I wish I could save myself an extra two million dollars a year. But I don't care because if they just do what they say they're going to do, my growth is exponential on the top. Commercial real estate, that's all they ever do. That one contract. It's all the money they could possibly see unless they write something in that contract to screw you over. Does that make sense? That does not carry forward to international policy. But if you're a stupid commercial real estate guy, you think the entire world works off of the policy of transactions, not building things together over the long term. Because all you care about today, you don't care about 10 years.
Kurt Elster
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Curtis Matsko
So we're Shopify here, and this is this podcast is not about international tariffs. This is about how do you get your Shopify. I always say it's a holistic view, Kurt. Your people are only looking at some basic KPIs and what they're doing and how do we get that better and how do I sell more to people cheaper? You usually, I've worked with hundreds of companies looking at what they do to help them out. And they're always looking at these same KPIs right here. And I'm saying, what about this? What about the whole thing? And you can see that they're they're stunned. Like, where's your dad? Who's your dad with? Where's the pain? Where's your gut? What your costs? Let's break the entirety. You start going into all this stuff, and they're just like Oh no, no, no. My return on ad spend is better. Or oh it's down because Meta screwed me over, right? No, no, no, no, no, no. You can't let Meta have that much control of your company. You've got to be strong. You have to be strong. Not the strongest. You just have to be stronger than 80% of other stores out there Why? Because when Meta screws up, the weak ones are going to cut out of business first, and then meta will have to change to go back to keep to everybody else, and you're going to be able to ride those waves.
Kurt Elster
So for you it you know word of mouth, it's that loyalty, it's that fan base that protects you from meta.
Curtis Matsko
The first thing that well, it also our our returning customers and our products for the returning customers. Uh if meta's growing up like they recently have, you know, uh in the last five weeks. get on with any big CMO around them, they'll say, yeah, they're messing it up again. They did it last uh year ago in February, March, April. They're all messed up again then. Can you reduce your ad spend and use other tactics where you're not just burning money with meta, continue in your pipeline to some degree and continue to make money and grow so that once you fix meta again you can start scaling out smart. Are you strong enough? If you're not strong enough, then you need to be working every day at getting strong enough to overcome the overtime, the hard times. Because the real thing in business is If you're in business in 10 years from now, you will be a much better company than you are right now if you continue to grow. If you get knocked out of business, it's just like Vegas, baby. It doesn't matter how much you won that night. When you're leaving town in ten days later, do you have that money in the bank? So it's don't get knocked out. When you get knocked out, you're done. They've got all your money and there's no other play in this thing. Don't get knocked out of business. That's really one of the big things. for people to know on their Shopify store.
Kurt Elster
It's good advice.
Curtis Matsko
I got some bad advice too, if you want that. I always have some good ones of that, yeah.
Kurt Elster
Alright, what's the give me a piece of bad advice?
Curtis Matsko
Hire the resume.
Kurt Elster
And at this point they're all at that you'd be hiring chat GPT, really.
Curtis Matsko
Assume that someone who overpromises what they can do could do it. Bad advice is to say, hey, they're the expert in that area of my company. I'm just going to step back and let them run it. You need to know enough about what they're doing so you can go in and be the outside voice. Because they need help. Even if they're the the people who say they don't, they don't, they don't, they don't, they don't. I hired a woman uh over, I won't say what company she was running, but she ran over 1,200 Retail stores around the country, very well known stores. She came over to help me run my weel. And she's got it. She's brilliant. And she still needs to hear how we do things and what my plans are and what the vision and let me come from the outside and see the pattern recognition to help her. If I just say, okay, you're gonna go on it. She doesn't have all of the vision and ideas that I have. She doesn't know plans I'm making that would all of a sudden fit into something, right? A great example of that is Uh outlet stores. Should we should we be in an outlet ball? What do you think, Kurt?
Kurt Elster
I'm going with no is my my gut reaction.
Curtis Matsko
Same thing. We run Okay margins, but they're very tight. We can sell them at the the most amount of money, right? So we can sell them online. Why would we possibly do that? So she made the very wise decision that we're not going to do outlet notes. And I said, why not? And she said, same thing you said. Why would we do that? And I said, well, let me explain. Let's say I buy a 500,000 square feet of a certain type of leather from uh a tannery, okay That has to be a certain color and it fits in what's called the color window. It's a cutout of four different sides of what the colors can be, and you put it on the hide to see does it fit that color window? If it's outside, it's gonna look different when you make the bag. Why is that important? You take a picture for Shopify. And then when they get the in the mail, it better match that, right? Does that make sense? Yeah. It better match. So you paid $3 a square foot for that leather, let's say, okay? Now they've just made $100,000 that's raw. I say, sorry, I can't take it. It doesn't fit the color window. I cannot make that into bags. But They can't sell it to anybody else. They made it for us. How about if I give you $1 for that mother that pays some of your costs so you don't lose as much money? But I can't sell it online. How do I sell it? I make it into our product lines with a non-specific color that goes to an outlet store. The quality of leather is still fantastic. It just doesn't happen to match the skew color that would be online. When people pick it up, they're like, this is an amazing leather bag. Let's say it's 10 square foot in a product. So you have $30 worth of leather in this bag, and this one you only have 10. So you've saved $20 just in that one thing, just on the leather. All of a sudden, at a ritual margin, I can cut the price of that thing by $79 and still make a better margin that I did off of the other.
Kurt Elster
So did you do it? Did you open the wholesale store?
Curtis Matsko
We have three outlet stores opening it this year. We have one in the Woodburn Mall. in uh south of Portland. We have one at Denver and one in Minneapolis opening this year. Now, she never would have known that. Does that make sense If I didn't talk and work with, if I just say, I assume you're gonna do it, she wouldn't do it. I also run the factory, right? She could say, oh, here's something we can't do it because of this. I'm like, wait, what if I had the lines do this and this and this and now we connect up and now we're better together. So never assume just because they know what they're doing that they can do it on their own. We all need the support. We all need the help. We all need the outside vision.
Kurt Elster
Portland Leather Goods has made many products. What is the one you're most proud of?
Curtis Matsko
Yeah, you know, I would say the very first one that we ever made was a leather journal, and it was and I spent months on that one product. I made it refillable and then I did this and then I added all the things and it generated the first two million in our company. Now it was not scalable because what I did is I I made the product and then I added to it different sizes, different leathers, different personalization, different image, different insert. I tried to go wide when I didn't need to. If you want to scale, you can't go wide. So it created the ver I was proud. I did a great product. People still show me what they bought 10 years ago. I still love that. No, created the
Kurt Elster
Any books you like? Any a favorite a favorite book?
Curtis Matsko
Yes. The book that I read that created everything that we've done and made me successful and everyone should read it when they're in fifth grade is The Lord of the Rings.
Kurt Elster
The Lord of the Rings. I love it. How did it make you successful? Other than like, you know, we have to battle.
Curtis Matsko
It taught me that I see myself as the hero. Uh bag end in my mind who looks like my grandmother's house on the inside. Uh, you get pulled on a journey and no matter what happens to you, you continue to win. You go all the way and you face your biggest fear and you face the dragon. You win, you're the hero, and you come back and you're changed, but you're the same. And then you pass the knowledge down to the next generation so that they can do the same thing?
Kurt Elster
You're in retail. What's the wildest thing a customer's done? You know, like return to brick?
Curtis Matsko
No, no, we get other bags uh sent back to us from other companies. Um they're like, eh, this bag was crap. And they send it to us. They're like, yeah, this is not us, not even close to us This, like, don't know where you mix this one up. No, that happens all the time. Uh there's the ones that piss me off the most are the ones like, well, they get a leather bag and we'll let you return it. But like we took, you could see they took a nail and put big scratches in it and saying, oh, it came scratch, which is an impossibility. Just send it back We could have out put that in, we could have sold that in another way. It was a beautiful bag, and now you just ruined it because you wanted to feel better about your return.
Kurt Elster
What uh okay, last question. If you go back ten years, what is the one piece of advice you would give 2015 Curtis other than find a different bank?
Curtis Matsko
People always ask me this, and I don't know what it would be because I glad of all the things I've learned and the journey and the people I've met, all the stuff that I've done. I will say this. I would say that the CEO and the founder and somebody that runs a big company is always in a state of two different things. You have to hold loosely onto two concepts. The most important one is you have to treat today like it is today and you have minutes and hours to solve everything in the world. You have to go at it that fast. But you have to realize the returns are not going to come for five to ten years, right? So you can't say, ah, take our time, you know, he's gonna build this over five to ten years. You have to hold both of those in your heart at the same time. I need it today. Go. No, I did not say we're gonna have a meeting next Tuesday. It's now. Bring them up to my office. We're let's talk about it right now. Let's solve it right now. At the same time of Yeah, by the end of the year it really wouldn't have played out. But if you have that attitude of laissez faire and taking your time, you will slow your whole thing down and your growth could never get You have to hold the fact up. I would have told them, yes, this hyperactivity of doing everything right away is important. But that the the real big payouts are overtime.
Kurt Elster
Plug, I want to hear you plug Portland Leather Goods. Like what's the elevator pitch look like for it today? If I'm in the market for a leather bag, where am I going?
Curtis Matsko
Well we we're really the only leather bag out there. Everybody always says who's your competition? And I say, for what? I mean, yes, you have luxury bags and let's go even non-luxury bags, let's go Kate Sapabe, let's go coach, let's go everything, okay? I've had at least 10 people in the industry saying, uh, you're the fastest growing bank company since coach in the 90s, which is basically true. Well, we use real leather, Kurt. Now I'm not saying that they don't. I'm just saying every square foot looks identical, is scratch resistant, is rain resistant, and is covered with frickin' plastic So there is leather underneath that, but it doesn't feel, look, or smell like leather. How do I know that? Because I had a tannery say, you're buying too nice a leather. Why don't you buy what coach or uh they say we make for uh Troy Birch? You can get the leather half the price for them because it's just covered. Just like the worst tides in the world covered up.
Kurt Elster
All right. This I was gonna wrap it up there, but now I ask you, please, explain to us grades of leather. Because I'm you know, I understand there's like top grain, full grain, we see these. That's that yes.
Curtis Matsko
Then there's something different that the on that, okay? So full grain is what we do the majority of our verb bags in, okay? That is just you just take the leather and you literally just put some oils. on that. So if there's imperfections, they'll actually come to the top. It'll take a little scratch and turn it black. So it's harder to work with. So it's very, very hard. But it's also just like your skin, right? That's pretty rugged, right? If you sand off the top layers of this stuff, that is not as rugged as what you want. What they do is to use, get more usability per square foot, make it all look, they not only sand the top off of that. then what they do is they cover it with polymers and plastics and and stuff to make it look consistent, which is great. If you want all your bags to look alike. The only difference between a Michael Coors or a Coach or any of these other ones is they have a different logo on them. Everyone's made it. I've been to the factories, dude. They're made in the same factory. They're made on the same lines. They're made of the same material. There's some have a C on it. Some have a different C on it. Some have an L V on it. They're all the same. There's not a line.
Kurt Elster
Which monogram does it get? And you can tell right away they're shiny.
Curtis Matsko
You can see it. I appreciate that. I love that. I'm not a branding expert. I'm a marketing expert. Marketing is I'm going to take an action that's going to do measurable sales that are going to come back to me, right? That's marketing. Brand is, hey, we just got bought by somebody. We can spend $200 million with fashion shows, magazines, influencers. Uh Jennifer Lopez is going to carry our bag a couple times and we're going to put a logo that people are going to see enough. We're going to look down on people and say if you're cool enough, buy our bag. And that's great. I try I have nothing against those bag brands. This is not me. I'm a guy from Montana who makes bags that my friends want to use. And my friend Jennifer Lopez. Yet. Yet.
Kurt Elster
Yeah, JLo could use your bags. There's nothing stuck.
Curtis Matsko
Oh, she would love me.
Kurt Elster
PortlandLeathergoods. com. That's the site. That's where we're we're all getting our new bags and wallets.
Curtis Matsko
Portland Leather or Portland Leather Goods. Uh they all come in there. And if they ever want to know more about me, uh on LinkedIn, CurtisMatsko.
Kurt Elster
Fabulous. No, thank you for doing this. I appreciate it. Uh the story's fantastic and I enjoyed it.
Curtis Matsko
All right, buddy. Thank you. Curt appreciate it. Bye.
Kurt Elster
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