Bryan Mitchiner - Building the Shopify of Wholesale

Speaker: 00:00
Welcome to Shelf Help. Today we're speaking with Brian Michener, co-founder of PZ, the wholesale operating system built for independent CPG brands. Brian's been on both sides of the table, really, founded and sold Mustard Co., taken it from a local craft brand to national profitable business, spent some time at a company called Shelf Engine, which was a startup up in Seattle where Ryan's base that basically helped grocers optimize ordering before that company is eventually required uh acquired. And that's actually where Brian met his co-founder, Ryan. So a lot of great experience on both sides of the table. A lot of great experience. But yeah, Brian, for the listeners that are not as familiar, would love to just get a quick lay of the land just in terms of the Origin story, the why behind PZ, and maybe just at a high level, really what the platform actually does and who it's really built for.

Speaker 1: 00:56
Yeah, absolutely. Thanks. Uh thanks for having me, Adam.

Speaker: 00:59
Yeah.

Speaker 1: 01:00
Stoked to dive in. Let's see. The the story begins with mustard. I graduated University of Washington in Seattle here and decided to start a mustard company shortly thereafter. My mom was stoked that I went through all that education just to start a mustard company. So started with one one mustard, me and a buddy making honey curry mustard. Uh, and that evolved into a full line of mustards in a local brand to start. And then we started distributing to a bunch of independent retailers and grocers and meat shops and cheese shops, all that around the country with this specialty mustard, and did that for a decade. Basically lived that life running running a food CPG product for a decade. And throughout that experience, I was always tinkering operations and primarily in spreadsheets, as a lot of CPG CBG brands will attest to. Spent a lot of time doing that and eventually got it to a point where uh I'd done it for eight or nine years and was ready to move on to something else. Sold the company just before the pandemic. And I credit a lot of what we did with the spreadsheets and the operational tools to uh make or position that that brand in in a spot where it could be sold and hand off to another set of owners. And then always wanted to go back and build actual software based on that experience and those spreadsheets. And that's what I'm doing now with PZ.

Speaker: 02:23
At what point did you realize start to realize, okay, this is just not working anymore, doing everything in spreadsheets? There's got to be something else here. Like at what point in the business is where things really started to break?

Speaker 1: 02:34
Yeah, I think spreadsheets are like the natural tool that people grab at very early on, right? They need to organize some sort of data, whether it's purchases or sales, even like invoices out to their customers. And then like you're so early on that you don't need anything robust. Like we didn't start, we didn't even start with QuickBooks, right? We were just like doing everything, like just grab a spreadsheet, just start loading things into a spreadsheet. So very early on, that's that's what we what we started doing. And then as the business grew more and more, obviously the demands of what we needed out of our tools and out of our spreadsheets grew more and more, and they got more and more complex. And the the challenge and struggle that I always had was I was always testing tools on the market, other uh inventory management systems, platforms, ERPs, whatever you want to call it. I was constantly testing all of these things and never really found something that understood me as a day-to-day operator of like what we were actually doing, boots on the ground, making mustard, moving things around the warehouse, reaching out to our wholesale customers and saying, hey, are you are you low on inventory? Do you need more, et cetera? Never really got how I was doing it day to day. So I was constantly looking, but I was also constantly tweaking those spreadsheets to make them better, more robust and more resilient and do more and more of that the automation and workflow, and never got away from it. I basically never found what I what I wanted and kept on on making what I wanted more and more powerful. So it was just a constant from almost from day one, just like tweaking those just to be what I wanted them to be.

Speaker: 04:09
Going from Mustard and Co. to to shelf engine, what did that chapter start to teach you about what it's how different and what it takes to build software versus building an actual brand?

Speaker 1: 04:22
Yeah, absolutely. I mean, I think one of the things that you realize, even like everyone operates out of spreadsheets still, right? Like I don't I don't I don't want to like always come back to spreadsheets, but like no matter the size of the company, like people are still doing like most of their like a lot of their work in in in spreadsheets. So yeah, I like started at Shelf and I kind of quickly got this reputation and I was just like the spreadsheet, dude. If you had a challenge with whatever spreadsheet, I would I would help refine that. But we were doing um, we had very, very sophisticated software, data, uh like data analytics and a lot of data science that went into it to forecast orders on behalf of very large grocers. And the software would do a lot of like the intelligence and the forecasting, but a lot of what the software used, like the data that went into the software, started in spreadsheets. So like we were like organizing and structuring a lot of order data and refining our configuration and sending that into shelf engine in order to do the forecasting. But um, yeah, you just realize like behind the scenes, there's so many people still pulling pulling uh pulling out the spreadsheet to do whatever they needed.

Speaker: 05:29
Right. So then how how did you and and and Ryan, when you eventually figure out you guys wanted to go build something together and yeah, kind of when did that the peasy clease peasy thesis click?

Speaker 1: 05:41
Yeah, absolutely. So it wasn't at Shelf Engine in which we like realized that we wanted to go start this this thing. Uh we had both been at Shelf for a while, he had moved on to something something new, I had moved on to something new, but we stayed in touch. I worked for him for like six months. He was he was my boss over at Shelf Engine for a little while there. And so we had obviously stayed in touch, and then I basically reached out to him at six months after leaving the shelf to see if we wanted to start something together. And we talked about a bunch of different ideas. I of course had this idea going back to my mustard at mustard days, but we really just collaborate really, really well together, and uh he wasn't super or he wanted to do something else from his current job, and uh so we decided to kind of take the dive and and see what we could do.

Speaker: 06:25
Yeah, makes sense. When we chatted about a few weeks ago, you I think if I'm remembering correctly, you described it to me as the as the Shopify for the wholesale side of things. Can you just unpack that for me a bit more and tell me a bit more about what what that means?

Speaker 1: 06:41
Sure, yeah. Shopify being like the universal uh place where people go to sell online. Yeah. See, there's millions of brands on that platform, and it does everything that you need it to do, right? You want to sell direct to consumer, and it started out as a really basic uh online store and has obviously evolved in something much, much more robust than that. And we essentially want to be the same for operations. Everything before you actually can sell it online. We want to be the tooling for you to source your raw materials and ingredients, to purchase them, to receive them, to warehouse them, to manage the inventory of those items, and then to transform the raw materials and ingredients into finished goods. So, you know, raw mustard seed and vinegar and mixing it up into mustard, and then putting it in jars and and selling it wholesale to your wholesale customers. So everything like before can actually be on the shelf uh at Whole Foods or or be on your e-commerce store on Shopify. We want to do to do the same.

Speaker: 07:40
I think you launched in like late summer of 2025, I think. Since then anything.

unknown: 07:46
Yeah.

Speaker: 07:46
About a year ago. About a year ago. Ever since COVID, it's been a time war. Since then, anything that's uh I don't know, anything that's gonna really surprise you and the and the team thus far about how brands are actually using the platform versus how you thought they would or where they're getting the most value out of it?

Speaker 1: 08:03
That's a good question. There's a lot of interest. A lot of people sign up and then just start giving us a bunch of feedback, which we love. Like we we like thrive on feedback.

Speaker: 08:15
Yeah.

Speaker 1: 08:16
And there's clearly a pent-up demand for a product. And I think it goes back to like my my mustard days of like I was constantly looking for something and constantly testing out different platforms because there is an obvious need. Inventory is kind of funny. It's this it's conceptually very simple, right? Like what comes in and minus what goes out, and that's what you have in inventory, and like you think like, okay, this is like not that complicated, but then you start doing it day to day, and you realize all the moving variables and all the things that can go wrong, and all the things that you can just lose sight of because it's a little tiny detail. So I think people that are like living this life really know how complex it actually is, and and there's a pent-up demand, so they like come to us and they're super stoked, and then they just like FUD us with a bunch of really amazing feedback. And that's like both surprising and and not really that surprising, I guess, because like reflecting it back on on my muster days, but the challenge is just like keeping up with the feedback, right? Like, we want to build and be very responsive to what people want, and we're trying, we're certainly trying.

Speaker: 09:25
Yeah, yeah, for sure. The platform is is I believe 100% free. There's no subscription, I think there's not even no contracts. It's basically PZ generates revenue via a fee per transaction, not an uncommon model. Assuming I got all that right, like when you and and mine were thinking about what the business model should be, how did you guys go about weighing the pros and cons of a transaction fee-based model versus a subscription model, or maybe I don't know, some something in between? And was that kind of an easy decision to come to, or did you guys kind of waffle back and forth a lot?

Speaker 1: 09:59
I think once we realized that it was the right decision, it was an easy one to make, but we hadn't even like considered it. Yeah. And an investor actually mentioned it or like kind of put it on the table, like, hey, you should consider this. And the reason why it was like an easy decision to make once we realize it is a couple of things. We're competing primarily with spreadsheets. Like people are using spreadsheets and those are free. And so to go from free to spending even like a few hundred dollars a month on some of these other existing platforms is a big leap. And like it requires a lot upfront in order to make that decision or sign that contract. So that was one reason. And then the other reason was we look, yeah, we looked at Square and they're obviously doing fine, and they're giving away their payment pro or their POS essentially, whether it's like the handheld or in the store for free and making all their money off of all the transaction volume that's running through their platform. And so it's kind of the same with with Shopify. They charge they they do charge the $39 a month um up front or whatever it ends up being, but they make most of their money off all the transaction volume. Yeah. And it's the same, the same thing with a lot of these other guys, like QuickBooks, all like transaction volume. And so we realize that not only can we have a better business if we if we monetize the transactions, but it would also make it easier to get a bunch of brands on our platform and the same at Square and Shopify and all those other guys do it.

Speaker: 11:29
Right, totally. What type of transactions are happening in the platform and like are there different fee percentages depending on the type of transaction? How does it actually work in a bit more detail?

Speaker 1: 11:39
Yeah, absolutely. I it comes up in a lot of calls, and because there's a lot of skepticism, like, wait, it's free, like what's the catch? I always remember like the guy is like never trust anything that's free, there's always a catch. Sure. And I don't know. I mean, we're very transparent with it. Like, if if most of most of brands will use QuickBooks, if you invoice your customers on QuickBooks and those customers pay that invoice on QuickBooks, they charge a 2.99% fee. In that 2.99%, QuickBooks is taking a tiny bit of that as the the platform that facilitates that that transaction. And we're gonna do the exact same thing. It's just like standard payment processing fees. We take a tiny, tiny bit, but if we get enough transaction volume running through PZ, and we believe we can, then we'll be totally fine.

Speaker: 12:24
Yeah. That makes total sense. Have you found there's been any uh, I don't know, risks or like drawbacks to free but transaction-based model?

Speaker 1: 12:32
Yeah, no, there's definitely like the one major downside I would say is because it's free to sign up, there's uh it's very easy for people to walk away because they're not signing a contract that is a long-term commitment, right? They did not sign up for a year, they did not put a bunch of money down, and so because they didn't put up a bunch of money down or aren't paying every month, the expectation for what they're going to get out of this platform is actually much lower, but it's easier for them to like walk away because they're not as committed because they did not sign the contract. So that's actually been a really big struggle, is like it's kind of counterintuitive because it's so easy to sign up, it's just as easy to walk away. And so we actually need to show people the value of PZ much quicker and much faster than other platforms, where like implementation can sometimes take two to three months, but you're committed to it, so you're gonna like keep showing up and keep trying. Yeah, yeah, we struggle with that one a lot, and I think like going back to Shopify, why I think that's one of the reasons why they charge like $39 a month or whatever. Like if you look at like their total revenue, and now I'm like nerding out, but that's a small percent. Like they don't actually care, they don't actually care about that $39, but it is a but it is a sign of like commitment, which is important.

Speaker: 13:54
Yeah, and that's a great point. Well, I guess to kind of close out on that point for let's just say some other founders are building a similar transaction fee-based model may make sense or may not. What's one thing they should think hard about before they pick a lane that may not actually feel as obvious?

Speaker 1: 14:14
I think at the end of the day, it doesn't really matter in in the sense that you still have to make a great product. Like if you get people to sign up for a year and at the end of the year they're not happy, they're gonna walk away. Um, but if it's free and you can make a great product and they can sign up and see the value of the product very early on, then they'll stick around. So like at the end of the day, it doesn't really matter. The same like long-term struggle exists of just making a real product that people love and and want to come back to. Yeah. So that totally makes sense. I don't know, I don't know if there's a right answer one way or the other.

Speaker: 14:50
Yeah, fair. From a product roadmap standpoint, what does your prioritization process look like? Like how do you decide what to build next or what that's even worthy of getting added to the to the roadmap at all?

Speaker 1: 15:04
It's a balancing act of a bunch of different things. Like I said, we get a lot of feedback. Yeah. So we're trying to react to that feedback as much as possible and incorporate that into the product. Um in a way that's not just like, yeah, sure, we'll just slap that in there, like slap that feature in there and like incorporate it into it in a thoughtful way that's like got a long-term value. We're working on some big ticket things always that are going to be like uh, you know, Keystone features. And then a lot of it too is if I'm being honest, is like stuff that I want. Like if I if I go back to like my mustard days, it's like this going back to like that dream platform that I was always looking for, like this is what I really really wanted. And I believe that if it would have worked really well for me, there's other brands out there that it will work well for that. Doesn't mean like it works well for everyone, but a lot of times, like inventory management, when I have conversations with other brands, like we have very similar struggles, like lots of very similar struggles from brand to brand, as a lot of listeners will know. Like we all we all talk, we all share in each other's challenges and all that.

Speaker: 16:13
For sure. Totally. How do you balance the uh the willing to customize things or build things based on client by client basis?

Speaker 1: 16:21
Yeah, usually um I am I'm no expert in this, so I don't know if uh take with the green green of soul, and it's a really big challenge, is like usually the feedback like you you have to filter the feedback through a lens of like what are they actually trying to accomplish.

Speaker: 16:38
Yeah.

Speaker 1: 16:39
And a lot of times the request will come in one way, but what they're what they're actually trying to do is something related to that, obviously, but not quite exactly what is being requested. So trying to get down to like the the core foundation of of what the the feedback is. And yeah. And then usually if you can do that, which is really, really hard to do, we we struggle with that, um then it's like more long-term or it can add value to many other brands beyond just that particular user.

Speaker: 17:12
Yeah, totally. But if you found as has worked the best in terms of converting clients.

Speaker 1: 17:18
Uh kind of comes back to the feedback, is the most success we've had is and we got a lot we get a lot of people that somehow discover us and and just sign up, and the most success we have is like the earlier we can get in conversation with those brands, whether it's through like our online, like our in-app chat or like actually setting up a a video call, and then taking their feedback and actually re reacting to it and building features that help them accomplish what they want to accomplish.

Speaker: 17:46
Yeah.

Speaker 1: 17:48
They love that. And like it's it's also really, really fun. And we can do that very, very quickly. And so uh the more we do that, the more engaged they get and the the deeper they get, and then the uh word of mouth they tell their other other like brands that they're friends with that about the products. So yeah, I would say it I a lot of it comes back to that that feedback cycle.

Speaker: 18:09
Anything you've you've figured out in terms of like ways to build trust with brand founders and operators who've maybe out of been burned by clunky software before.

Speaker 1: 18:20
Yeah, I think the free helps a lot. Like like there is like there is there is no contract. I feel adamant that like we don't want to get into that relationship where there's uh a bunch of money being spent and then they're not gonna they're not they're not happy with the value that that money would would need. Yeah, I think I think the free the free aspect helps a lot then.

Speaker: 18:47
Yeah. What's the most common objection you you hear in that context? And like how do you handle it if you know free isn't enough, I guess.

Speaker 1: 18:56
Yeah. Inventory, there's a lot of there's a lot of workflows, there's a lot of features around it. So there's a lot of that's probably the biggest struggle is like lots of requests, and we can do some of them, but we can't do all. So like we like the more we can do for people, the more engaged they are, but there will always be more and more things uh that are inventory adjacent uh that we that we have on the roadmap and that we will eventually get to. In order to be the Shopify of like the operation side of the house, we will need to do everything like fulfillment is a is a is a good example right now. We don't really do anything around fulfillment. That doesn't mean that we cannot add a lot of value upstream of that, uh, but a lot of people want to be able to take their orders and then be able to fulfill it all under one roof instead of having to go somewhere else. Yeah. So we will eventually do that, but like we're not quite there.

unknown: 19:50
Yeah.

Speaker: 19:50
No, that totally makes sense. For other founders that are, you know, there others that may be listening that also sell tools or services or SaaS into the the CPG space. Um, I don't know what's one thing that they should keep top in mind that you know that can help them actually get some real adoption that you found as an impact. Let's just say ignoring the the the free aspect, which I think is kind of a cheat code to is there an extraordinary.

Speaker 1: 20:12
Just make it free. In this case, give it just give it away. Yeah, I thought that's yeah, that's tough. I think I think the closer you can get to the operations and like understand people's pain points, and if you've been there done that, then that's super helpful.

Speaker: 20:29
Yeah.

Speaker 1: 20:29
If you can get someone on your team that's been there done that, if you can get an advisor really close to you that's been there and done that, that's like live the life of these brands. It's just when you have a conversation with the brand and get on a call with them, like you understand what they're saying because there's so much in between the lines. Yeah. That goes a long way for sure. And the trust like comes through as like, okay, like when you say X, Y, and Z, that that manifests in the product as A, B, and C, right? Like we will like this way, and then like they're like, okay, they understand what we need to accomplish.

Speaker: 21:05
Yeah. What do you feel like are like the biggest or most common operational mistakes you see early stage brands making right now in kind of that overall backend operations world?

Speaker 1: 21:19
Yeah, I don't know, mistakes is is it, but uh it's funny when I when I when I reflect on my mustard and co days, I think the the thing that I like regret the most is that we didn't or the the thing that I admired the most about brands at that time and still to this day are the ones that like really build their brand and build community around the brand and have a very strong like brand presence. And their product is great and all that, but they've they're able to grow and get to a point like exit velocity of like all the cost of making a a C BG item by just building a really amazing brand. And I don't Like, do that as much with Mustard and Co. Like, I like their brand, but I was uh more focused on the operations and tinkered and tinkered and tinkered.

unknown: 22:08
Yeah.

Speaker 1: 22:08
And I would say I think if I could go back and do it again, I would I would say focused on the operations and like the uh the financial house and like just like the the fundamentals in the beginning and get that all set and then shift gears to focus on the brand and building that because I think a lot of people start these brands because they have a really great product or they have a really great brand that they want to get out into the world, and it's absolutely true. But I've seen this and and I've heard this from many brands is like they will get to a point where they start getting in these really big orders from from big retailers, and it turns out the more they sell, the more money they lose just because their financial house maybe isn't in order, their operations aren't in order. And that to me, like is the easy stuff. Like that, like there's like it's pretty black and white if you are making if if you're profitable, right? Like if your margins are there. And so I don't know, I would think like get that in order and or find someone that can help you get that in order early, and then go pour your heart and soul into building the brand and and everything that a lot of people that start these brands are really good at.

Speaker: 23:18
Yeah.

Speaker 1: 23:19
But otherwise, like the more pro like I've seen it, like people would like have to shut down after a few years because it's just they're like growing their brand, but they're not making any money, and that that's heartbreaking because it's just math at the end of the day. Just like simple get your get your cost down, get your manufacturing down, get your waste down. Yeah. Um those middle phases are really tough to bridge that gap because you're like losing a bunch of money in those phases. And if you have a lot of capital to do that, then great. But if you don't, you kind of have to get your financial house in order in order to get there. And honestly, it like building the brand is the really hard part, I think. The the operations and the financial stuff is pretty straightforward if you just like if you just do it or if you just like find someone that can help you do it.

Speaker: 24:09
Right, totally.

Speaker 1: 24:11
Because you know, you know when you've done it, right? Like, I don't know, it's it's hard to say like what a checklist of things that you can do to build a brand. Like, you can't do that. There's a checklist of things that you can do to get your margins in order.

Speaker: 24:24
Let's just say you sold PZ tomorrow and you're like, okay, I'm gonna go start it. I want to go back on the brand side and and and start another brand. What would you really focus on setting up, maybe on day one, but very early from the operational side of things that maybe a good amount of first-time founders wait way too long to do? Man, good question.

Speaker 1: 24:45
Get really familiar with all of your costs and just start to map out all the ways you can you can get your cost down, right? Like you won't necessarily be able to do it right away. Sure. But knowing all your packaging costs, your ingredient costs, your labor cost, your equipment cost, your rent, like all these things, and like at what point does the math pencil out and and and your margins get to the point where you where you need to be? And if you're constantly aware of that, then you c are constantly aware of like where the where there's the most fat to trim and how many changes to to like trim that fat essentially. A stupid example, like when I f when we first started mushroom code, like the bottles that we were using were really expensive per unit. And you could see at what point you needed to get the costs down, or like at what point the costs come down. Like our local provider, like literally said, if you start buying this many, like the cost will go down and go down and down. And so just having eyes on that and knowing the point at which you can become profitable essentially, or make make the margin that you need to.

Speaker: 25:59
Brian, last question for you. Obviously, you're very familiar with the CPG world, built a brand yourself on the brand side. Now you're seeing a whole lot of brands, I imagine, on the on the software side of things. Any specific brands or just trends in general that are particularly like piquing your interest these days or things that are super interesting to you today that you're tracking closely?

Speaker 1: 26:22
Yeah, I mean, I love the brands that are doing just really fun, clever things that draw attention to the brand. Like, I mean, obviously, like one that everyone will be familiar with is Grazza. Like they are involved in NASCAR now or something like that. I don't know. But it's just like it's just so random that actually now that I now that I say that, I'm like thinking about it. It's like, is it because they're oil or something? Like there's the I don't know, like the motor, like motor oil. I don't know. I would not have made that connection. I mean, yeah, that's the only thing I can think of now that I just said it, but it's interesting and like it catches your attention, right? And like um Ao Mayo is another really great one. They're doing a bunch of really fun stuff that is why people I think engage with these independent brands, and and it's just much more fun to to do that sort of stuff and and and uh live in a world with that sort of brand ecosystem than the more boring court. For sure, totally. I like that one. That's a good call out. Yeah, they literally have like a uh golf cart that they drive around NASCAR. It's like branded. Actually, I think they sponsored it more. I don't know, it's it's really fun.

Speaker: 27:31
I'm gonna I'm gonna look that up right after this. That sounds awesome. Well, yeah, Brian, this has been awesome. What's uh what's the best place for people to follow along with you and all your expertise in in the CPG world and ops world, and then uh best place for people to follow along with updates and all the things going on with PZ.

Speaker 1: 27:48
Yeah, I think just check us out on like LinkedIn is primarily where we are. Perfect. PZ with the P P E A S Y. Perfect. Check us out there, keep an eye on us. We're we're young early on, we're growing fast uh and uh yeah, excited about what's to come.

Speaker: 28:06
Love it. Awesome, Brian. Well, I appreciate the time. I think uh I think that's the pod.

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