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Malcolm Lui:
Welcome to the High Value Sales Show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with Robert Khachatryan, the Founder and Chief Operating Officer of Freight Right Global Logistics, a logistics and transportation company catering primarily to technology centric companies. Welcome to the show. Robert.

Robert Khachatryan:
Thanks for having me.

Malcolm Lui:
Robert, you grew your company's revenue from $900,000 in 2014 to $5.5 million in 2017, a 511% increase, and in 2018 you hit around $19 million. Before we talk about how you grew your company so fast, can you briefly share what your company does beyond my quick intro, and how your company differs from the competition?

Robert Khachatryan:
Yeah, so we are a logistics company. What's traditionally known as afraid for weather. We primarily move products and cargo in general for for businesses. So it's a business to business families. And the way we differ from the competition is we're just very forward thinking, very technology centric and very lean. You know, there's a lot of competitors out there that are venture funded and spend hundreds of millions of dollars. But that's basically what they do. They spend a lot of money and we do the opposite. We don't waste money. We don't waste resources. You know, ours or our customers. And that's basically how we primarily defer.

Malcolm Lui:
You grew your company incredibly fast from five and from nine hundred thousand dollars in 2014 to almost 20 million in 2018 at 19 million. What were the three biggest drivers of your sales growth over the past four years?

Robert Khachatryan:
You know, I would say people people are very important. You know, every person we hire is, you know, makes it happen. So if you compare how much revenue we produce group person and how many shipments we move per person. It's it's it's it's a huge difference with the with the competitors in the market in general. So if you look at some of the big names in logistics are my team moves about two point seven times more freight per person than some of the larger names out there. If you factor in the venture funded startups in the logistics space, we move about three point eight times more cargo per person than in some of these guys. So efficiency is really you more than that. The number one factor, I would say, and people see customer seat, you know, in logistics, people hop around and they test different companies. And it's it's very easy to see whether your vendor is, you know, wasting your money or is wasteful. In general, so people, I would say, are the number one factor. And, you know, in a world today where there is so much. Venture funds is being funneled into marketing is really just smart marketing and word of mouth referrals. So if you can believe it, that's how we got to the number.

Malcolm Lui:
All right. So a second one would be smart marketing or or just simply word of mouth referrals. OK, smart vice, smart marketing. Are you referring to other types of marketing as well?

Robert Khachatryan:
Yes. So, you know, we do partner with a lot of companies to to basically. Sort of outsourced sales. So we strategically partner with a lot of companies who do primarily sales and we sell our services. So we we try not to spend too much money on marketing because that's you know, that's not we don't consider it true and consistent growth. So you have companies out there spending some of our competitors spending two hundred fifty thousand dollars a month on Google AdWords. But if you if the foundation is not, you know, lean and efficient company, the moment they stop spending this money, be they lose all the revenue. And that's not what's happening with us or our marketing budget. It has little effect on ongoing and existing business. So customers stick around. Even if we don't advertise.

Malcolm Lui:
Right. Well, I imagine sticking around because you guys are getting the job done at a very attractive price.

Robert Khachatryan:
Yes. So there is obviously an acquisition cost. Like with any other company. But, you know, that's that's where. Most of the marketing expense stops. Whereas with other companies they have to continually spend to keep bringing in the customer, including subsidizing services, you know, which which we don't do.

Malcolm Lui:
Right. So I come back to the first one out of it. He talk about people making it happen. What exactly are they doing that the people at the other competitors aren't doing?

Robert Khachatryan:
United States. It really comes down to choosing the right people. You know, we we we pick and choose every person very carefully. It's a small team where we are right now, less than 20 people in this office. And, you know, every person and every new person that comes on board can affect the overall performance. So we absolutely go for the top notch talent. You know, we recruit a lot from people that we know and have worked with. And, you know, we tried to go for candidates that have been in the industry and have a lot of knowledge and bring something to the table from from their previous jobs. You know, we have competitors who have been in the industry for 150 years. And, you know, we don't try to reinvent the wheel. You know, a lot of these companies have gone through a lot of phases and they know how to do some things really, really well. And when we bring people from these companies, we want them to bring this knowledge with them,

Malcolm Lui:
Right.

Robert Khachatryan:
You know, as opposed to a lot of companies out there who basically think that, you know, they can they can somehow magically come up with a new way of doing something that has been done for 100 years. Right. There is something to be said about trying to innovate and improve old processes and, you know, moving all the industry out of old ways of doing it. But it's very easy to fall in the trap of thinking that a company that's been doing this for a hundred years and spends billions of dollars every year somehow can't come up with improvements. Right. So

Malcolm Lui:
Right.

Robert Khachatryan:
So, you know, we try to piggyback on these improvements that decided other companies have made. And, you know, by basically bringing on board people who either worked there or helped develop these improvements. So, you know, we go for these sort of candidates.

Malcolm Lui:
Right. This does not mean that you don't hire entry level folks who have zero experience in logistics.

Robert Khachatryan:
You know, we're not. We will. We will definitely open to it. We just haven't in the past. We have seen. We have hired candidates that have shown incredible potential. We. But there's there's few of them, admittedly. And when we do hire them, you know, we don't just train them on the job. We do try to provide courses in logistics and supply chain in general. And when we do hire people who don't have experience, we at the very least try to hire people who have degrees in supply chain or logistics of some sort. And. You know, out of the 20 people that work here, they come from, believe it or not, 16 different countries. So it's incredibly diverse and they don't just come from will just X companies in the US. They come from logistics companies in Italy, in Spain, in Brazil, in Russia and Korea. I mean, you know, we. We bring together incredibly diverse talent from all these countries and all those cultures. So, you know, we encourage diversity. We encourage people bringing their experience with them. So it's it's it's a very interesting soup of all these backgrounds.

Malcolm Lui:
All right. So far there, four people who come from the same country, what country is that?

Robert Khachatryan:
United States.

Malcolm Lui:
Is it okay?

Robert Khachatryan:
So we have we have a couple of folks from Brazil. I think everybody else is from different countries.

Malcolm Lui:
Right now,

Robert Khachatryan:
The couple

Malcolm Lui:
Did you

Robert Khachatryan:
Was.

Malcolm Lui:
Hire them from those countries and brought them over or they're already

Robert Khachatryan:
It's

Malcolm Lui:
In the United

Robert Khachatryan:
That

Malcolm Lui:
States?

Robert Khachatryan:
It's a mixture of some. We hired some from those countries, we hired some that were here, you Europe, but are from those countries. So where there is no there is no particular strategy about it. So we don't. You intentionally go hire people from different countries. That's that's not how this came about. We just really work for the most interesting candidate that we think would contribute the most. And they just happen to be immigrants.

Malcolm Lui:
Right.

Robert Khachatryan:
A lot.

Malcolm Lui:
So we talked about two drivers people. And the second one word of mouth referrals is our third driver of your growth.

Robert Khachatryan:
It's the third driver is, you know, would probably be service, which combines a lot of different things. You know, just efficiency, just just this philosophy of being really lean, you know, which does convert into a lot of savings for customers.

Malcolm Lui:
All right. So can you talk a little bit about how you had tremendous growth in one year, right? Five point five million in 2017, 18, you hit 19 million. Did you do something different to get that huge bump in when you're.

Robert Khachatryan:
No, you know, actually, our trajectory is about 70 too close to 100 percent growth every year for the last several years. You know, we were we're constantly on the lookout for opportunities that are not, you know, that are not staring you in the face. Right. We are our primary growth is not from salespeople pursuing new customers. Our primary growth is from partnering with companies, partnering with startups who enter this logistics space. You know, there are marketplaces that are there are digital booking platforms, digital freight forwarders and all kinds of entrants into this space who basically have a hard time finding like minded logistics providers. And, you know, we've been on this forefront of forwarding digitization for a long time. So anybody who enters the space, you know, sooner or later ends up having the conversation with us, whether we reach out or they reach out. So we we constantly look out for these companies cause they bring a lot of new sort of business, a lot of new channels. So most growth comes from new channels rather than directly pursuing customers. And a lot of it also comes from new companies or I should say, existing customers growing. So historically, if you look over a longer period of time, most of our growth, most of the most consistent growth comes from our customers themselves growing in size. You know, we like to think that we have something to do with it. If you were a distributor or a manufacturer, you know, you spent upwards of 30 percent of your expenses over just X. So if you have the right logistics partner, you know, to keep your growth. So, you know, we help them grow and they reward us with, you know, continuous business in return.

Malcolm Lui:
Right.

Robert Khachatryan:
And it contributes a lot to growth. And

Malcolm Lui:
In

Robert Khachatryan:
The.

Malcolm Lui:
Terms of partnering with the companies that are that are digitally minded, how do you find them or how do they find you?

Robert Khachatryan:
You know, it's worldwide. Transportation is, by some estimates, as a six trillion dollar industry. But it is a very small world somehow. So, you know, you often see names. You recognize if somebody has a new idea about how to do something that involves will joysticks probably. Chances are either recognize us or if they ask for a device somewhere, they will be directed to us and we to actively look for. Look for these companies, these channels and these people, you know, by following either, you know, that industry news or funding rounds, that sort of thing. So it's there's usually some announcement of some logistics company starting out or platform starting out. And we we anytime we see it, we reach out to them right away because we're curious. We know we have something to offer and we know, you know, there is always a potential of gaining a new partner and a customer or a new channel.

Malcolm Lui:
Right.

Robert Khachatryan:
So it's basically.

Malcolm Lui:
Plus, it was the typical sales cycle when it comes to develop a new partner or landing a new customer has a pretty quick or pretty long and drawn out.

Robert Khachatryan:
So, you know, smaller wants there. They're pretty quick, it can be a matter of couple minutes and then some of the, you know, enterprise customers see it can take months of negotiating. Building workflows and, you know, standard operating procedures. You know, few if you think about a company that you know. Is a large distributor in any industry. They know that means they have warehousing needs. They have to import some import needs. Export needs, domestic distribution and then other different areas. We'll just expand. It's incredibly complex to get going with them because it involves dozens of people there and it involves people on our own. All this, you know, everybody's used to working with a specific vendor. There is already relationships. There's procedures in place. So it can take months to scale up to full cooperation with a large client.

Malcolm Lui:
Right.

Robert Khachatryan:
We do customize our or workflows and processes uniform for larger customers so that that adds to to the overall, you know, finalizing of the cooperation.

Malcolm Lui:
Right. Got it. So how is 2010 shaping up for you so far? Can you share with no that you're on track to hit?

Robert Khachatryan:
2019 is tricky, you know, it's you know, I think everybody knows about the tariffs. The trade war with China, trade war with Canada, and just about every country out there is at risk. So, you know, it creates a lot of doubt. And, you know, it's it's not that a lot of products are not more expensive and a lot of people are going to pay a lot more for their back to school shopping. But all these people who are in this industry and the business of importing and distributing goods in the United States, they're basically they're having a hard time planning. And that's the main problem, is not that it's 25 percent more expensive now for them to import. It's that they don't know what's coming next. So companies that import, you know, 20, 30, 40 containers a month of, let's say, backpacks. They don't know what what their cost will be two months from now. They don't know what their retail rate would be two months from now. So it's incredibly hard to plan for four, you know, in this market conditions. So, you know, the only way to minimize their exposure and risk is to just scale down. So that's been happening a lot. And that's kind of the primary negative factor this year. But. But, you know, we're a we're fighting hard to keep on our trajectory, to stay on our trajectory. The season is just opening up, so, you know, most of the shipments are shipped second half of the year in preparation for the holidays. So, so far we've been on track. Hopefully it will continue that way and hopefully we'll just trade war will settle down a little bit and, you know, we'll eat at least the same number or summer of this year.

Malcolm Lui:
All right. And testing three final questions for you, Robert. If you were to have a billboard along the freeway somewhere to advertise what your company does. What would that message be? And keep in mind, at most people drive by it billboard in about six seconds. It needs to be a pretty short to the point message.

Robert Khachatryan:
Simple, reliable logistics, man. Assuming, you know, the person knows what will joysticks is, they have the need for it. Anybody who deals with the logisticians and transportation in general, I think they all want the same thing. They want simplicity and they want reliability. It can get incredibly, incredibly complex. So, you know, anytime you can find ways to simplify it, it makes a whole lot of difference. So, you know, and reliability, of course, is something that's hard to find in this industry by virtue of its complexity. So that's what the board would probably say.

Malcolm Lui:
Yeah. Yeah. Logistics makes the economy humming along, right? If stuff doesn't move, things don't happen.

Robert Khachatryan:
Yeah, it's incredible when, you know, when you're in this industry and you walk into a store, you know, whether it's Restoration Hardware or a Tesla dealership or lots of other places. When you see products that you've actually shipped and you know that product is there because you made it happen, you know, it's it's a very cool feeling.

Malcolm Lui:
Yeah, I also think it's kind of cool how you mentioned there are these companies are talking about new ways of doing logistics and in our new digital world. But and the day hits to a product still needs to be delivered by, you know, things on ships and trains and trucks. Right.

Robert Khachatryan:
Absolutely, yes. You know, there is somebody operating that crane that lowers that container on the vessel. There is. There are sailors. There are captains. There are people who pilot the ship. There are people who drive the truck. There are. And there are people who load and unload those containers and airplanes and the deaths. That part of it will never be digital. You can't take over. You know, all of it completely, so technology is there to assist people. It will assist more and more. But, you know, when it comes to physical movement of something so complex, you know, it's that's still human. At the helm.

Malcolm Lui:
Yeah. Have you studied any case studies about how Amazon does their logistics?

Robert Khachatryan:
Absolutely, we work with Amazon very closely, in fact, about maybe 25 percent of our business is directly related to Amazon. So, you know, we've I've seen personally Amazon facilities. I've seen kind of automation. They have. And, you know, I think with all the media hype out there about automation, it's incredibly humbling to go into very, very automated Amazon facility and to see how much of it is done. White people. You know, it's still it's still technology that's built around people. You know, it's not some kind of a matrix style machine that, you know, things go in and out. There is lots of people inside. There's people walking around. There's people checking things. And these people work very, very fast machines like fast. But they are people, you know, aided by technology. And that's I think it's I think that's something that a lot of people don't realize. And I didn't realize until I saw it. So, you know, Amazon is very efficient. But, you know, Amazon, basically. Makes very good use of the people that work there. And it's it's just you have to see it to to kind of grasp that idea. But it's amazing.

Malcolm Lui:
Yeah, I think the the warehouse distribution set up for Amazon in nearby here nearby Austin here in San Antonio is something I think they offer actually offer tours. So I think we have to check it out.

Robert Khachatryan:
It's a it's yes, it's a great experience, I absolutely recommend it. It's it's about an hour and a half, I think. And yeah, it's it's very eye opening.

Malcolm Lui:
All right. Check it out. And he also brought an interesting point about how they build their logistics around the people as opposed to people having to conform around the latest and greatest technology.

Robert Khachatryan:
Yeah, absolutely. You know, this it's it's it's unfortunately become such a buzzword that it's it's misused and misinterpreted and hyped up so much. You know, you're if Uber were trucking, you have flex 40 of all this very overhyped startups, which, you know, they they they make it sound like. They they are responsible for some sort of revolution where if you dig a little deeper, it really is just technology aiding people do what they've always done. You know, just do it more efficiently in some cases and in some other cases, it's just hype. And there is no there is nothing really there. So.

Malcolm Lui:
Tonight's questions for you, Robert. Who are your ideal customers and what's the best way for them to contact your company?

Robert Khachatryan:
Are ideal customers are businesses that are that are shipping freight. Right. So there would be manufacturers that would be distributors, importers and, you know, people who have the needs to ship things that are heavier than, let's say, a hundred pounds. So these are all the people that we work with, all the businesses that we work with. We we work best with people who value efficiency, you know, who value long term relationships. We are by no means the cheapest company out there. But, you know, we are very, very good at what we do. So people who value this are our ideal customers for us. And basically they can contact us by going on our website, which is freight. Right? Dot com. They can also email us. Email me. I know it's Robert, that free trade that comments in my signature and seen about a thousand times a day. So, you know, or they can e-mail sales at free trade that common. Somebody will respond to them right away and get in contact and we can get things going.

Malcolm Lui:
All right. Robert, it's been awesome having you on my show today. I really enjoyed hearing about how you grew your company so fast.

Robert Khachatryan:
The pleasure was mine.

Malcolm Lui:
We've been speaking with Robert Khachatryan, the Founder and Chief Operating Officer of Freight Right Global Logistics, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.

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