Vancouver’s Makeship has found a plush market
Founder Rakan Al-Shawaf has perfected the art of the dropship.
Before dropshipping became a buzzword that people pretend to understand even if they don’t, Rakan Al-Shawaf was using it to make millions.
Al-Shawaf was born in Toronto to Syrian immigrants, but has spent time all over the world and graduated high school in Riyadh, Saudi Arabia. He was halfway through a Queen's engineering degree when he took a gap year to go to Shenzhen, China, and learn Mandarin.
He eventually finished the degree, but by then his career had already moved past engineering. In China, Al-Shawaf and his friend Kevin Wong founded shipping logistics company Ryno Global to help western companies with supply chain issues. The pair customized t-shirts and backpacks for YouTubers and internet celebrities and shipped them directly from Shenzhen.
“Now it’s pretty common to dropship custom products, but five years ago it was very new,” says Al-Shawaf. “Nobody dropped custom projects, they dropshipped generic products.” They scaled that operation to a million dollars in annual revenue after nine months. Four years later, it hit eight figures. These days, Wong, who is based in Shenzhen, mostly runs Ryno, while Al-Shawaf is in Vancouver working on their next project, Makeship.
As a spinoff, Makeship is more Frasier than Joey. The main principles at play with Ryno are still in motion here, as Makeship creates products for social media influencers and ships them to fans. But Makeship also operates with a twist on the traditional Kickstarter model: projects are funded beforehand by fans and consumers and only then does Makeship take on the costs of actually making the items.
“Large creators can create custom goods easily, but small- and medium-sized creators can't,” explains Al-Shawaf. “Holding inventory and not knowing if a product is going to sell is really risky, so let’s create a product, launch it, have the fans determine if it should exist or not, and if enough people buy it, we make it and ship it to all the fans.”
Makeship did that with a bunch of products when it launched in August of 2018, but by 2020 the company pivoted to one type of product in particular. “We realized that if we focus on just plush toys, we can actually streamline sales and design and grow much faster,” Al-Shawaf says.
So far, it’s working. Makeship had three employees in 2019 and revenues of CAD $400,000. In 2020, the company pulled in just over $5 million. Last year, it more than doubled that to $12 million and currently has more than 60 employees (with more on the way) across the globe.
And if you’re thinking that must be largely the result of parents clamoring for toys for their children, well, think again.
“Our main demographic is actually 18-to-25-year-old males,” says Al-Shawaf. “If you look at Kickstarter, 5-to-10 percent of projects are funded. With us, it’s around 75 percent…We’re selling mainly through animators and gamers on the creator side and also have a ton of other hyper niche products from drag queens, political commentators, illustrators, comic books. We’re in the plush toy market, but really what we’re in is the creator IP market, which is a massive, massive market.”
Al-Shawaf is just a bit older than his core demographic. And while he cites business reasons for the company’s Canadian base, it’s all personal as to why he (along with other core members of the team) are situated in Vancouver.
“Vancouver is the most beautiful [place in Canada]—it has the most interesting things about it,” he says from a Strathcona coworking space called Makeshift that he admits has caused confusion given its closeness to his company’s name.
What’s not confusing, at least to Al-Shawaf, is the company’s future. While he thinks there is a possibility that the mostly-bootstrapped company will raise money in the future, he feels like Makeship can grow 70-100 percent this year beforehand.
“Our thesis is that everyone is going to be a creator,” he argues. “What YouTube did to democratize video content creation, we want to do for physical product creation for content creators and IPs. We just launched squishies, a squishable plush toy, and we have a keychain now. But we want to go into figures, backpacks, other types of products creators might be interested in to expand their product lines. In the future, a creator of any kind can come to this platform and bring a physical product to life that’s uniquely theirs.”