From Sneaker Flips to a $60M Empire: The Bootstrapper's Playbook w/ Oscar Rachmansky (Part 1) - Ep. 39

SPEAKER_00 0:10

Today's guest is Oscar Rechmanski. Oscar is the founder and CEO of OS Group, a B2B commerce platform changing how fashion, footwear, and streetwear inventory moves between brands, distributors, and independent retailers. Oscar dropped out of McGill University at age 19 and started the company from his bedroom using $30,000 he had made buying and selling sneakers on Instagram. Since then, he's grown OS Group into a nearly a $60 million business with a team of 25 people and two warehouse facilities, all without raising a single dollar of outside venture capital. Today, Oscar is focused on building the infrastructure behind modern wholesale commerce, helping businesses source, distribute, and manage inventory in an increasingly fragmented retail market. His long-term vision is to build the operating system for B2B trade. Oscar, thanks for being on. Welcome to the show, man.

SPEAKER_01 1:11

Thank you.

SPEAKER_00 1:11

Thank you. Appreciate it. So before OS Group existed, you were already buying and selling sneakers online. Was that just kind of like a your side uh hustle just to make some cash during college, or how did you get into that?

SPEAKER_01 1:31

Yeah, precisely. So uh the story goes back to uh when I was about 14 or 15 years old, uh when I was entering high school. Um this was right around the time when sneaker resale um and apparel resale was really starting to kind of bubble up. You had uh big brands like Supreme, uh, you know, people lining up for their releases for for days. Uh and I was growing up in New York City, so I was kind of at the center of it all. And it all really began uh when I wanted a couple hundred bucks to buy some cool sneakers. And I came to my parents, I said, Can I get a couple hundred bucks? They said, no way. And then uh from there I realized I was gonna have to make it myself. And uh that's correct, yeah. It began essentially as a side hustle for a few years while I was uh while I was in in high school and kind of just uh built up from there. But but initially it was I was just really one of those kids, maybe you guys have seen or you've seen like uh those YouTube videos from back in the day or like Instagram videos of kids lining up at the Jordan store or the Nike store, and and that was me. I was I did it for three or four years and was able to uh make a couple of bucks. Pretty pretty good money for a high school kid. So that's how that's how it all began.

SPEAKER_00 2:42

Yeah, no, I remember uh growing up in New Zealand uh when there would be when Supreme kind of came a big thing, and um, and uh I I don't think I don't think any of the people that I went to high school with had real Supreme because I don't know how much of it actually made it down that part of the world, but um I know that uh Supreme was uh yeah was big uh for a lot of people um when I was uh in high school, especially early high school, uh when I was about you know 14-15 years old. Um so from from you going through that um and learning how inventory moved through the market through that experience, what what did that teach you about the industry that helped you shape uh the company that you built in the OS group?

SPEAKER_01 3:42

That's that's that's a great question. And and I would say the transition really began around 2019, give or take. Um at that time, uh there were a lot of front-facing kind of peer-to-peer uh resale platforms uh really picking up momentum like GOAT, StockX, Stadium Goods, um, and and a few others. And myself kind of having a um a view a little bit deeper into the into the market, um, I realized that there was this kind of whole B2B world of initially what was really just sneaker resale at the time, uh, that was super fragmented. Uh you had hundreds and and thousands of buyers and sellers kind of uh running around selling inventory on SMS messages or spreadsheets, uh, Instagram, Facebook, various social platforms. And it was kind of feeding this entire resale market uh that was being platformed by those bigger players on the consumer side. And so at that time, uh around 2019 or 2020, give or take, uh the vision for OS group really began to take shape. And initially our mandate and our focus was really on building a uh B2B platform for really just like snooker resale trade, right? So uh taking all these hundreds and thousands of resellers, buyers and sellers uh that that were moving very large volumes of inventory, surprisingly. We're talking about you know, people doing millions of dollars of sales a year and and creating a platform for them to kind of streamline uh that buying and selling. So that was initially like the the little white space set that we saw. And from there we've we've we've expanded our mandate um more broadly into what we call fragmented wholesale trade or kind of like the new wholesale economy, which I can totally speak to.

SPEAKER_00 5:28

Yeah. Yeah, no, I definitely want to go into what exactly that fragmented wholesale economy means.

SPEAKER_01 5:36

Yeah, yeah, for sure. So um, you know, for the past or really as long as wholesale trade has existed, uh I think that most people have always thought of wholesale trade as uh something very linear. So a brand uh selling to a retailer or maybe a manufacturer selling to a distributor, right? Kind of uh very straight line economics and a straight line supply chain. Now, over the last 10 to 20 years, give or take, with the advent of uh resale markets, secondary markets, uh major marketplaces, uh independent e-commerce Shopify businesses, your Amazons, your Shiens, your T-Mu's, your StockX's, so on and so forth, um, the front end of commerce has really fragmented and it's created hundreds of thousands of kind of new, primarily like small business operators that are in need of high-demand branded inventory. And at the same time, uh brands on the supply chain side have really tightened their distribution because they're always extremely bare uh uh wary of where their inventory is ending up. And so what it's created is this huge kind of nonlinear, more like network-shaped world of buyers and sellers, whether they're resellers, global distributors, wholesalers, uh retailers themselves, uh various merchants basically buying and selling what's really at this point hundreds of billions of dollars of inventory in really fragmented manners. So not necessarily just a brand selling wholesale to a retailer, uh, but really folks across the supply chain stack now, whether they be maybe brands, retailers, distributors, wholesalers, resellers, um, selling to all new types of uh B2C merchants, live sellers, social sellers, marketplace operators, off-price retailers. And so you've created there's this whole new world and kind of web of uh wholesale trade, especially when it comes to really high-demand brands in like fashion and footwear, which are still our niche, uh, that is still really fragmented, really messy. Uh folks are still doing buying and selling on spreadsheets and and and and and WhatsApp or you know, all these various kinds of uh, you know, uh, let's call it under infrastructure methodologies. And so uh what we're trying to do is streamline and build infrastructure for that uh world of wholesale trade to have it really start to mimic and feel like the more traditional wholesale trade that we all know, right? Simple kind of buying and selling.

SPEAKER_00 8:04

Okay. So who are you in this process? Uh yeah. Who are you uh providing the value to? Uh which I believe the answer is multiple parties, and it's not that easy to uh Yeah.

SPEAKER_01 8:19

Yeah, well, well, yeah, sure. I I I can I you know we we kind of sit in the middle of of buyers and sellers, right? So to buyers, generally really uh B2C businesses. So any business that's selling to a consumer, um the value proposition that we provide to them is we provide a streamlined uh experience to access the inventory that they need. So without us, they might have to go into this crazy web and world of sellers of thousands of uh you know global merchants who they might not know, they might not trust, they might not understand when they're gonna get their inventory. Um, they might even be concerned about the authenticity of the merchandise, um, again, because it's very fragmented and they might not be dealing directly with the brand. And so uh what we provide for them is really just a streamlined B2B e-commerce experience to come onto our platform, uh, shop inventory that we have on hand. That's our warehouse uh right back there, um, and uh access all the inventory that they otherwise couldn't get or would probably have a really hard time accessing. So we work with uh small retailers across the United States. We have about five or six hundred uh stores that we sell into. We work with live and social sellers, so you have whatnot and TikTok shop exploding as distribution platforms. There's thousands of sellers on those channels that are in need of inventory. They will source through us. Uh, we work with marketplaces and marketplace merchants, so all the major players in the space uh work with us. So, really anybody that's in this kind of um you know modern uh distribution uh line of business could potentially be a customer for us and shops with us. And on our uh supply chain side, what we do is we just provide really streamlined and easy liquidity for vendors. So, you know, similarly, in the way that customers might uh have a trust barrier to accessing inventory, there's oftentimes a lot of risk involved for vendors uh when it comes to selling their inventory. They might not know where to sell it, they can't access all the liquidity, they need to go out and source buyers across all these various channels. And you know, our proposition to them is to say, look, we have this platform with thousands of buyers, hundreds of millions of dollars of buying power ready to go. Uh just come and sell it through us. You know, you're gonna have a safe, efficient, and uh easy transaction, essentially.

SPEAKER_00 10:39

Gotcha. Okay. No, so that's uh and it feels like if I uh for me as a vendor, then I part of that is then I'm getting um all of the the things that I uh the risk essentially that I would otherwise face kind of pre-vetted as well. And so that it's kind of both ends of who you're serving. It uh it all kind of feeds into each other. That's um and uh I've uh my company we've uh we've had a lot of e uh e-commerce um businesses in the past, uh, especially as it comes to clothing, and and you see those gaps in um in these different uh parts of their business uh all the time. And I feel like it is, you know, there's a lot of you know, there's a lot of things out there, um a lot of tools and platforms that help with different things, but it seems like this is like the big hairy thing that is like difficult, uh that is extremely underserved, I'd say, uh as far as solutions, because across the board this is something that we've seen firsthand uh is um has no process, and there's um and especially when it comes to even just sourcing uh sourcing vendors for some of our uh e-commerce uh brands. Um we've seen we've seen them be scammed and not get the product that they uh thought they were receiving, or something that is like not um not at all what they had in mind uh or what was advertised, what they paid for, just uh the product not show up at all, and um they're having to go out and source it firsthand and uh try and figure out who to do business with, and then you know, that's the difference between uh uh you know, very bad cash situation for a business uh that you know that operate on these different cash conversion timelines and are placing these huge orders uh and can you know one bad order from a a bad vendor can can really hurt your business and um you know mitigating this kind of risk uh is huge.

SPEAKER_01 13:10

Yeah, yeah, precisely. And and that's kind of where we insert ourselves in the middle. Um and I think that you know when it comes to uh the world of especially just the the modern commerce landscape, right? You have so many kind of SMB uh merchants that are becoming empowered to uh sell to consumers. But like you said, they don't necessarily have the infrastructure to manage their supply chain or go back and acquire new inventory or even just have the tools to run uh their day-to-day business. So that's kind of our goal. You know, we we see ourselves as as a as a as an infrastructure platform that sits behind um you know all of these new channels like whatnot and TikTok and StockX and Goed and eBay and Amazon. Um and our goal is to help uh the sellers on those channels access inventory in a safe and effective manner and help enable anybody, any qualified business that has inventory to sell to all of those uh all those potential buyers, right? Um we really what we I sometimes call it like uh open market trade in the sense that you know traditionally uh wholesale was really gated to manufacturers and uh brands, right, selling to retailers. But uh on our platform, again, we have so many different types of sellers. We have um resellers like you know how I used to be a reseller as a kid, right? We have kids who are resellers that sell on our platform. Uh, we have wholesalers and distributors globally who uh might have accounts with certain brands that that they want to sell. We even have retailers themselves that are sitting on access inventory that go back and and sell on our platform to access additional liquidity. So um I think that it also creates a kind of a like a price normalization and just helps helps it helps customers get access to the best inventory at the best prices, and it helps uh sellers sell their inventory at the best prices. So that's our goal, really creating like this open market for a wholesale trade, um, especially in really high demand, uh globally recognized brands. And that's always kind of been our niche and fashion footwear and things like that.

SPEAKER_00 15:24

That's awesome. Oh, I love that. And so when you're at Miguel and you're 19, um walk me through when like how this idea of starting this came up and what did that look like when that idea first come uh came up.

SPEAKER_01 15:41

Yeah, so so initially um it was a very kind of natural uh outgrowth of my experience reselling sneakers in high school. Um when I went to college, uh I knew that I wanted to continue kind of in that space, wasn't sure exactly what I wanted to do. And then with the advent of these platforms like Goad and StockX, really um taking the resale scene by storm storm, uh so to speak, I realized that there was some white space kind of on the wholesale side of that industry, the B2B side of that industry. And so initially kind of just began um, really just began as an operator first. You know, when I was in college, I was buying and selling um sneakers and and and streetwear in bulk, uh brokering transactions between various vendors and uh independent resale uh shops in the US that might have needed inventory, things like that, and began to kind of snowball and pick up some momentum. Um and then it was right around actually uh when COVID had happened and I uh went back uh to the to the US because you know there was there was there the lockdowns and things like that, that I really kind of uh realized this opportunity to build uh B2B platform for this form of trade. So it was it was it was very it was very much like a natural evolution, very much operator first. And I think that's that's remained true for our business even fast-forwarding to today, kind of as we every every every year, you know, we expand our mandate a little bit, expand who we service or the categories that we're in. Um and since we're not a funded company, you know, we've been bootstrapped since our inception, it's it's always kind of test the market, get our hands dirty, then build some technology around it, and and and kind of build the infrastructure, right? So that's the that's been the story since day one.

SPEAKER_00 17:35

Yeah, no, I I love that. And um I uh on a on another episode uh I I talked about um the getting started phase and the you know that that kind of misconception that most you know most entrepreneurs that just get out and start something and create something meaningful and build, you know, these all these great companies out there, they don't start often, uh very rarely if at all, with like the business model mapped out and the whole roadmap and the plan ahead of them. It's just uh you know, it's it um and I talked about like the most important thing, um, in my opinion at least, being if you have something that like that idea that you are uh you have full conviction uh with and you're confident in your ability to to make it happen, um, then just taking that first step, even though you don't know exactly where it's gonna go or how it's gonna unfold, and being able to pivot and just go kind of where things lead you, because like you know, you're talking about every year your mandate changes and and you kind of just you get your hands dirty, you test things and see what the market responds with, and uh and so like that ability to pivot is like super powerful. And uh I I feel like a lot of entrepreneurs or uh aspiring entrepreneurs like never get past that first step of just like just taking the very first step and then after that the next and just seeing where things go.

SPEAKER_01 19:27

That's that's that's a hundred percent true. And I think that um additionally, you know, there's there's a saying that I like um don't let uh perfect be the enemy of good enough, right? Meaning uh I think that oftentimes, especially kind of in this world of of of of massively funded companies and and kind of seeing all those headlines like people wait to build product and they wait to perfect their offering and and and and everything, and they're like building in this in this in this silo, right? Um and they're when they go to market at their year down the line and they think they they think they understand the whole market and they've done all this work and and spent all this money. Um and then they get to market and they get an answer from the market that they could have got they could have gotten a year ago with uh you know 90% worse product, but they still would have known directionally um where they were going, right? So like that's one thing that I really appreciated about the genesis of the business for us. You know, um we were always ahead of the curve, kind of boots on the ground, testing, getting in front of customers, figuring things out, and then once you get that initial validation, investing and and and and and kind of perfecting. So that's that's yeah, very much true. I agree.

SPEAKER_00 20:39

Yeah, no, and it's I think that's true for um for really any business model um is you know that yeah, you you know that what you're talking about is uh with letting perfection get in the way of good enough to like just ship something, take it to market. And you know, especially you know, when it comes to apps, platform, technology, software, like you know, the the want to make it perfect and then bring it to market. But in reality, what you think is perfect is not necessarily what the market's gonna think is perfect. And taking something that works even if it's not perfect and doesn't work great uh to market, and like your customers or your users are gonna be the best people to give you your next update or your next uh your next pivot or your next addition or subtraction or uh to be able to get to uh closer to that um that picture of perfect, right? And it's it's not gonna come from building it with no one seeing it or getting any validation, especially when it's something you you could take it to market and the market could respond uh completely different and say, no, this is actually not of value. Um or and you know. It's you yeah, you can get to that point, like you said, a lot quicker um by just shipping something, going out there and starting something and learning from what the market tells you about it. Because it's it that makes it so easy to know what to do what to build next. Um your customers or your users tell you uh directly, like you don't even have to guess. Um and so when you went out and started, like I I feel like that's a huge you know that's huge decision to drop out of uh out of college to to do something. So first of all, like did you did you have to did you have to do any convincing uh to your parents?

SPEAKER_01 23:02

Yeah, yeah, for sure. Yes, yeah. So it's um uh so interestingly enough, when when I when I got to college, uh like within a month of of my arrival, uh, I I still I think I still have like the note. I wrote down on a note, I was like, this is going to be my first and last year of college, right? So right when I got there, I was like, I I I'm gonna figure something out and get out of the year. Um it ended up kind of happening in a bit of a more kind of transitionary and like phased uh manner than I would have expected because um ultimately uh COVID happened in the second semester of uh of my year. And so I came back home and I spent about a year doing school online and and during that time period, I was re that was when the business really took off when things were really growing, and I was kind of managing the two of them. And and quite frankly, you know, it was it was it was really a blessing in disguise that um, at least for me personally, that you know, COVID happened at the time and everybody was was sent home because I was able to kind of uh lean into the business without having to make that decision, right, to drop out right away. And during that time period, during that year, um, as we were starting to find like market fit and we were starting to really scale revenues, um, you know, it was a constant conversation with my family and obviously my parents about about dropping out. Um ultimately I had set some metrics. I think it was like we want to hit you know $10 million and like $10 million run rate, something like that. If I hit a $10 million run rate, we're we're I'm out of here. Uh and that was in, I think like the summer of 2020. Um, I don't know if they expected me to ever hit it or if they thought it was gonna take a while, but literally, um, you know, by early 2021, that's where we were. Uh and so I made the decision at that time to drop out. And you know, we had I I think I had I had healthy pushback from my family and they held me accountable. And and and ultimately I think that the key was um making it a uh rational conversation and not just like a a feeling, you know, emotionally drop. Oh, I want to drop out. I see, you know, I see all these founders and and and they all they all drop out and are so so so successful. You know, that's not how the conversation needs to go, like for anyone in my shoes, maybe. It's funny, I actually just um had a had a great conversation with with someone a few years younger than me who's in the same position. He's considering dropping out, and and I told him the same story. I said, dude, set some real metrics, get buying from your family in advance and hit the metrics. What else, you know, what else is there to do?

SPEAKER_00 25:42

Yeah, well that's that's amazing. So how did you how did you manage to scale it that fast? Like were you going out and doing a lot of marketing, or how did you get OS Group out there?

SPEAKER_01 25:58

Yeah, so initially when we were really focused on uh the sneaker resale market, uh let's call it from like 2020 to maybe 2022, 2023, the momentum was built one primarily through uh social media. So we had a great social media presence, um, especially on the uh like B2B side of sneakers. We built up, I think, 30 or 40,000 followers and they were all super engaged, and they were literally all either resellers, resale storefronts. They were it was the best target audience you know you could have built, and it was built completely organically. And then on top of that, um we were just relentless when it came to uh direct outreach on the vendor and the customer side. So initially that was kind of what I was leading and building was that uh business development engine. And every day, you know, it was either me or maybe one of the original kind of uh team members we would be scouting Google Maps, looking for storefronts to sell to, to reach out to. You know, we weren't waiting for people to come to us. We weren't telling people, oh, hey, you know, we we have this platform. Um we were literally banging the phones, talking to people, selling the value proposition. And same thing with vendors. You know, initially uh we were sourcing most of our vendors through social media. We we just found some hacks and kind of like the algorithms and figured out what keywords to use to find people who were selling sneakers and things like that. Um and that's that's how it was built. It was really built with our bare hands and and and uh yeah, I would say maybe a little bit unorthodox day where people spend tons on digital advertising and building funnels and all this stuff. But listen, initially the company was really just me, so did what we had to do.

SPEAKER_00 27:45

Yeah, no, and um something you said in there, I think, is uh definitely worth um kind of zooming in on because I think it's a super important thing for new founders or people who are going to launch new companies and how they're gonna overcome this exact thing of uh getting their name out there. Like so you you're a baseball guy too. So um I think a lot of founders and entrepreneurs kind of subscribe to the the whole uh field of dreams analogy of build it and that will come. And I think that's like so uh I think that's very misdirected and and inaccurate because um I think it's a build it and then like you're saying go out there and hit the pavement, get on the phone, email the totally like and it's just blasting and getting it out there because no one's gonna come and find you. If you even it's and like that's where you know, like especially in this day and age, uh a good idea is no longer enough to create a a great company because everyone has great ideas, but also you know, uh the best product is not gonna be a successful business if you cannot get it out there and have people aware that you exist. And so like no one's gonna come to you, and that's like I think a a part of um a part of this, especially when you're first starting, that a lot of entrepreneurs and founders uh don't place enough emphasis on, and maybe they get you know uh you know, their first, you know, group of customers, or if you're a service company, your first uh few few clients, and then they kind of just stay at this small level, uh, and they don't ever grow past that. And um, and I think part of it is it it is it can be an uncomfortable thing for someone who's not uh the personality type that would be great in like a sales role. Um you know, like um everyone, you know, I think everyone across the board uh doesn't really love uh you know door-to-door salesmen, right? And that knock on your door and try and sell you stuff. But especially recently, I've been thinking a lot about those types of people and just on the the mental side, to be able to or I um and actually the uh last time I thought about this was a couple of weeks ago when why my wife and I were in Boston. There were um there were two young guys on the corner of a busy street in the middle of uh Boston, downtown. Uh they had vests on and they were selling uh they were selling something. Uh well, I don't think they were selling some uh selling something. They were trying to get people to donate to a charity. Uh I think it was a children's charity, uh, from what I saw on the back of the vest. And I watched uh as they approached this one guy approached four or five different people over the course of a couple of minutes, and each one of them just completely kind of brushed them off like and kind of ignored him like no basically said no, fuck off, you know, whatever. And I'm like, man, for that guy to continue uh after getting rejection after rejection after rejection and still be smiling and still be doing that, like there's like there's a there's a uh a lot of you know skill really uh that goes into being able to do that and deal with rejection. And I think it's not necessarily that um that these new founders are just incompetent at sales, because I think they'll be like, oh, it's a sales problem. I'm gonna go hire someone to do uh sales or uh to you know pay someone to go out and do uh handle our marketing function so I don't have to do that because I'm not good at sales, and I'm like, I don't think it's a sales thing, I think this is a rejection thing that being able to handle rejection and still keep moving on. And so um for you, uh do you how did you how did you see this? Uh did you see this as something like did you ever have a background where like rejection was something that you'd faced before at any point in your life that allowed you to do that? Because I think it's a very important trait for a founder to have.