Izzy Rosenzweig's Disruptive E-Commerce Ambitions
Pivoting a $50 Million Revenue Business to Build Portless
Hey! Justin here, and welcome to another edition of Just Go Grind, a newsletter sharing the tactics, strategies, and stories of world-class founders. Today’s deep dive is sponsored by Portless as part of my Partner Program, where I interview ambitious founders building amazing companies and write about their stories.
Izzy Rosenzweig, Founder & CEO, Portless
Izzy Rosenzweig has had an incredible founder's journey in the past decade.
He built a company, at its peak, to $50 million in revenue only to pursue another, even larger, opportunity.
I love the audacity.
But this wasn’t random.
His background in manufacturing, e-commerce, and logistics makes him perfectly suited for what he’s now building with Portless, a next-generation 3PL that fulfills e-commerce orders directly from China within 6-8 days while providing a total domestic experience.
Building this company has been far from easy, but with it, Izzy and his team are able to provide an amazing value proposition to customers.
Let’s get to it.
Izzy, much like a few people I’ve written about previously, is from a family of entrepreneurs which undoubtedly impacted his own career path.
This influence goes all the way back to his grandfather:
In the mid-1950s, Izzy’s grandfather started manufacturing in Toronto, Canada, doing business across Canada as well as the United States.
When Izzy’s father was old enough, he also joined, running the business for many years.
By the 1980s, an innovation had changed the industry:
Standardized shipping containers.
While the first standard shipping container in the U.S. was invented and patented by Malcolm McLean in 1956, standards for shipping container sizes were determined in the late 1960s, leading to exponential growth of the industry in the 1970s and 1980s.
A loading process that used to take weeks, was shortened tremendously:
This innovation forced factories to adapt or die.
Many of those who refused to change were out of business within a decade.
Those who understood they couldn’t compete from a mass production perspective chose a particular niche like Izzy’s grandfather and father did.
It worked quite well for them.
Other businesses saw an opportunity to partner with factories overseas or build factories overseas and did very well.
Izzy grew up during this time, saw this transition happen, and was inspired by his grandfather starting the business and then his grandfather and father adapting when the supply chain changed.
That experience influenced Izzy to start his first company, Browze.
Breakthrough at Browze
In 2012, Izzy started Browze, with a focus on selling kitchen accessories and home decor to consumers.
It’s a business which, given Izzy’s background, makes a lot of sense for him to start.
Because of his understanding of manufacturing being more efficient overseas, he started talking to factories overseas right away.
Also, as he mentioned to me, he got really lucky early on:
It’s important to have some context here.
Traditional commerce has a number of problems.
Izzy outlined it:
Oh, and let’s say you do really well, guess what?
You’re going to wish you bought more because you probably lost out on hundreds of thousands if not millions of dollars of revenue had you bought more inventory.
It’s a struggle.
But with Browze, Izzy took a different approach.
Working with a local fulfillment center in China and sending orders to customers by airmail, Browze was able to order a fraction of the inventory they would typically need and start selling in 2 days instead of 60 days.
Customers still got fast delivery and USPS tracking, but it was a huge unlock for their company, allowing them to take on less inventory risk and quickly adapt to changes in demand - no more running out of inventory for Christmas.
It was also a game-changer for cash flow, going from -60 to only two days, as well as margins, where he didn’t have to pay container costs or third-party logistics costs.
This approach was a huge advantage for Browze, allowing them to scale aggressively, leveraging a supply chain their competitors didn’t have so they could keep selling constantly.
Izzy didn’t stop there.
Pressing on an advantage Browze already had, he made a big bet on the company’s future.
Investing in the Future
In the early days of Browze, Izzy was working with other companies that handled their cross-border fulfillment. Usually, these were Chinese companies that didn’t fully understand Western customers and their wants.
Izzy and his team wanted something better.
After a number of years of this arrangement, they made an ambitious decision.
Build their own state-of-the-art fulfillment center in China.
They initially thought it’d take 3 or 4 months to get up and running.
Little did they know just how far off their estimates were:
Let me just highlight something for you in case you missed it.
Izzy thought, conservatively, it’d take three months to get the fulfillment center up and running, but it took two years!
But in the end, it was worth it for Browze’s customers:
This investment in the future was made possible as a venture-backed company, with Browze raising $7 million in March 2020 when they decided to build their factory and another $5 million early the next year.
Izzy described it as industry-changing, not only improving cash flow but also increasing margins because, if your package is under $800, it’s actually import duty-free, increasing margins from day one because individual packages are going right to the consumer.
Of course, this only works if customers are happy, which means they need to receive their packages in a reasonable amount of time, something Izzy and the team are doing:
The benefits were clear, so they built the fulfillment center, completing it in 2022.
Not long after, they’d expand beyond their own business, allowing others to use their fulfillment center, and eventually migrating almost 100% to the new business model.
After running the fulfillment center themselves for a while, with their own margins increasing and cash flow improving, Browze’s investors started encouraging Izzy and his team to talk to their other portfolio companies.
If Browze had seen improvements, why not allow other companies to benefit as well?
So Izzy and the team started having conversations with other companies and they soon started onboarding them as customers.
Just like Browze, other companies started becoming more profitable and were able to further expand internationally.
This led to a big change:
And so, Portless was born.
Of course, there’s more to that story.
Browze, the consumer business, grew to 100 employees and around $50 million a year in revenue at its peak.
They had raised millions in venture capital and were hiring like crazy, but then Apple’s privacy update in April 2021 shook up the industry.
Izzy described it as “absolute chaos” without having proper marketing attribution.
Amid the chaos, Browze started ramping down the consumer business, letting people go on that side of the company, but hiring more people for the logistics side of the business.
Their employee count overseas grew and they continued ramping up their logistics operation.
After getting their first introductions to companies that wanted to use their fulfillment center about a year ago and seeing increasing demand, Portless officially launched in May 2023.
One question I had to ask Izzy: Did they have the same investors?
In short, yes.
The original investors in Browze remain investors in Portless and they also brought on new investors:
And which customers is Portless going after as part of that TAM?
One segment is apparel brands.
As Izzy describes, they’re a no-brainer due to how much they’d save on duties alone if sending products from China.
Furthermore, any e-commerce businesses that are manufacturing in China and that are on the lighter end, because Portless is buying airspace, make sense. Think cosmetics, jewelry, accessories, and smaller items.
How has Izzy approached finding these businesses?
After getting those introductions in the beginning from his investors, those companies started ramping up with Portless. Once they did, they started referring more customers to Portless.
This has only continued, with about 95% of their customers so far coming inbound.
Spending very little on marketing, Izzy has also leveraged podcasting, appearing as a guest on a number of shows, as well as tradeshows and conferences to get the word out.
Of course, with the focus on B2B, Izzy’s acquisition strategy has, rightfully so, been a bit different than his days growing Browze:
Portless is still in the early days, but they’re primed for a breakout, with Izzy’s vision for the company being way bigger than what Browze’s was originally.
The Big Vision for Portless
Izzy and his team recently finished building their second facility, one that will be able to handle 75,000 orders a day.
While the first state-of-the-art fulfillment center they built took two years, largely because of all the legal structures they put in place, this new facility took only a couple of months.
Today, the team is pretty much working 100% on Portless, and while they still sell some products directly to consumers, this is largely for testing purposes in new countries.
They recently onboarded a cohort of customers in Vietnam and plan on being in Thailand in the next 6 to 12 months.
Izzy and his team always test out new channels, carriers, and countries with their own products first prior to opening them up to customers of Portless to ensure they have it all figured out.
The expansion into Vietnam and Thailand is just the start.
Izzy’s big vision?
Disrupt the direct-to-consumer industry, just like standardized shipping containers changed global trade.
He wants to enable tens of thousands of e-commerce businesses to simplify their supply chain, make more money, and have better cash flow.
With 10 years of experience working in China and now starting to understand Vietnam and Thailand, as well as having plans to move into India at some point in the future, the foundation is set.
Will it be difficult to achieve the vision?
But Izzy is motivated to make it happen:
He’s also fully aware of the difficulties in building any company, especially one like Portless.
As Izzy told me, even if you do things right for a few years, you’re eventually going to get punched in the face in some way or another. He experienced this firsthand at Browze.
Portless is off to a great start, but they’ll face a number of challenges as they expand globally.
For Izzy, he knows the team needs to plow through and, when they get punched in the face, get up and build bigger and better.
If Portless sounds like the solution to your cash flow or shipping needs, contact them today!
Interested in having a deep dive written on your company and founder? Check out my Partner Program to learn how you can get your company in front of 23,500+ Just Go Grind subscribers.
Recent Founder Deep Dives
What did you think of today's newsletter?