405 : Derek O’Carroll – Selling on multiple channels takes an all encompassing approach- develop a desired customer experience work flow
I know this has a big title. But it is really important. Don’t try to serve everyone, rather serve your “Desired” customer. When you look at selling that person it takes a different approach. Derek walks us through developing a work flow to ensure consistency. After all that is what it takes to get through in today’s complicated marketplace. Oh and by the way, each marketplace has to be approached differently. Great discussion from an experienced agent.
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Here is transcript- It is automated so it is not perfect but it does seem to get better over time.
Derek: [00:00] Right? And what we did was we said, well, hang on, why don’t we start from scratch and build a platform? We call it a retail operations platform that is built for purpose for one sector and is not customizable. In other words, you can’t go in there and write scripts on it. You can obviously use an API for ’em.
Cool voice guy: [00:17] Welcome to the e-commerce momentum podcast where we focus on the people, the products, and the process of e-commerce selling. Today. Here’s your host, Steven Peterson.
Stephen: [00:30] Hey, wanted to take a second and talk about Gaye Lisby and Gary Ray’s Amazon seller tribe and their daily lists that are put out, um, and incredible stories that you can read if you go out and check out, uh, amazing. freedom.com forward slash momentum hyphen arbitrage. I know that’s a lot to put in there. Amazing freedom.com forward slash momentum dash Arbitron and you’re going to get 14 day free trial, no money risk, no, no challenges. You don’t want it when you’re done, you get out. But imagine getting lists as grateful as I like to call it, mailbox money. I love that term. Mailbox money. It’s where you can work from your house, buy things online, have them delivered to you and then sell them on a various marketplaces. But imagine you can have somebody else do that for you. So you want to buy time, you want to control, uh, what they’re buying.
Stephen: [01:27] Well, you take these lists and you can join multiple lists if you’re interested and then you can segregate them for the merchandise you want and send them to them. They can make purchases for you on your behalf. Have it delivered to you or delivered to them for prep. Boom, sent into these marketplaces and you could sell. How about that? Wouldn’t that be awesome? I spoke at their conference and there were so many million dollar sellers just using online arbitrage. It’s still available. And again, 14 days, the only way you’re going to get 14 day free trials if you come through my link, it is an affiliate link. Uh, they do pay me, so I don’t want to mislead you in any way. Um, I would appreciate it, but I’d like to see you try the 14 days. I’ve had so many people that have joined. Have so much success.
Stephen: [02:10] It’s very exciting to me and you know, quite humbling to me, um, that they trust me to recommend this group and I 100% recommend this group. I’ve seen the results. These are great people that will also teach you to fish. This isn’t just a, hey, here’s the list. You’re on your own. No, this is, hey, here’s why that wasn’t a good deal over here. Hey, there’s another opportunity and you get to join their groups. And it’s just a phenomenal group of people. Um, just great, great, uh, leaders in that group and these lists are phenomenal. So again, it’s amazing. freedom.com, forward slash momentum, I even arbitrage amazing freedom.com, forward slash momentum hyphen arbitrage. Use that get two weeks free. Try it. You don’t like it, drop out, but give it a shot if you want to add that to your business. Welcome back to the ECOMMERCE momentum podcast.
Stephen: [02:59] This is episode four oh five, Derek. Oh, Carol. Um, yeah, I get a little giddy in this episode because we talk accounting terms and inventory management and it gets me excited. Um, it gets me excited for a, because I’m a nerd on that stuff, but B, it is a place where a lot of companies struggle as you scale to size and you start managing thousands of skews and we do, it gets hard to manage. And I’m not saying we’re perfect at it, so this isn’t me preaching to anybody. What it is is a, Derek offers some solutions for free on ways to um, really look at your processes and then find out where you are and then find the gaps, right? Find that Delta, I always use that term, find the gaps, the things that are wrong and then you can address them. Don’t fix everything, fix the things that are wrong.
Stephen: [03:46] And uh, their company does offer solutions for larger companies, so $1 million in sales, so not, not terribly large, but when you get to that, it gets to be a challenge. When you start handling hundreds of skews or thousands of skews you’re in, you can get in trouble. And so finding a method that will help you get that cost of goods figured out. I think it’s a very powerful, and it’s not as crushing as some of the other companies out there doing it. You guys, if you’ve ever investigated some of those, you can’t get off their phone list and we all know who that is. Um, that’s crushing. That’ll crush you, especially as you’re spending more in advertising like we are. Um, you have to reduce your other costs. And so this is a great opportunity, a very smart guy. Let’s get into the podcast. We’ll come back to the ecommerce women and podcast.
Stephen: [04:31] We’re excited about today’s guests from across the pond. Derek O’Carroll. Uh, Derek Ha runs a company, owns a company’s CEO of Bright Pearl, and he’s going to talk to us about inventory, uh, omni-channel sales, which we all know is the thing that no, you don’t sell on Amazon. You don’t sell on Ebay, you don’t sell on Walmart. You sell on everywhere. And he’s going to talk to us about best practices and ways to reduce, uh, touch. I call them touch points, um, and a whole bunch more. Welcome Derek. Oh, thanks very much. David. Pleasure to be with you today. Thank you for coming. Uh, he’s fresh from the vacation and I’m fresh going on a vacation. So one of us is on edge taking take a guess which one it is. Two weeks though. Say, you know, let’s just start there for a second. What did it take for you to be able to get a team to allow you to take two weeks? I mean, you know, it that that says something that just doesn’t happen without intention.
Derek: [05:31] Well, that’s a great question. I think there’s a couple of things that you need in the mix to be able to do that. So first is you’ve got to have a company strategy that the team are behind and believe in, but most importantly that they can translate that to, um, a level of zero ambiguity about what they do on an hourly basis to be able to play there apart and the team hitting the goal and the company strategy. And, uh, since I joined Bri pro in the last, you know, I joined just over three years ago, we’ve been very focused on that. What are the jobs of work that our customers need to hire us to do on their behalf that give them more time to focus on the important things in life? So to answer your question in those three years, it got to the point probably about a year ago that the strategy became very clear whenever I walked around the office and said, what do you think our strategy is?
Derek: [06:22] I would start to get the same consistent answer back. But then most importantly, when we had a, an event with the staff and the team and I’d meet their spouses, their wives or their husbands, they also understood what the company strategy was, which was great for me to hear. But also the validation was they knew how they were being successful themselves and what they needed to do as a family and as a spouse. Because as we all know, in today’s busy world, there’s always someone behind you, you know, giving you that support and egging you along and giving you advice. And that’s essentially the environment and the culture that we were aiming for. Um, and yeah, so that’s essentially allowed me to go away. Two weeks is a good, is a good time. And I know you said earlier on, yeah. You know, but I’m, I’m, I’m said I’m over the pond, but I’m, you know, I’m two weeks in Austin, Texas and I’m two weeks and I’m in the UK every month, so I’m back and forth. So, you know, I think I deserved it.
Stephen: [07:19] Okay. All right. Well that’s pretty impressive. Uh, I’m going to get eight days, which is pretty impressive. I’m in my world. That’s probably one of my longer vacation. Um, so I’m, I’m looking forward to that. You know, the other thing I was thinking about is, and I know, I guess I can say for both markets, I know what Austin’s market is. It’s the hot market. It’s the hottest place for tech in the u s by far. Yeah. How about, uh, I don’t know where in the UK you are, but finding and keeping those cause cause you were just talking about employee spouses, right. And I always say that when, when you can build, uh, that employee up in front of their spouse and they, they get a little taller, they stand a little more proud. You know, it’s a very, very, a great way to, you know, build up employees. How hard is the market in those markets? I know Austin’s market’s hot to keep those good people. So I mean I, I get that you taught them the, or you help them understand where you’re going. But how hard is it to keep those people?
Derek: [08:13] Well, it, it’s, it’s really hard. So, um, and firstly when I joined Bri Pearl’s u s operations was based in San Francisco. And uh, I, uh, needed a decision based on timeline and you know, time zone. Um, but also when I went and hung out with the people who worked with us back then, they lived in shoe boxes. You know, the quality of life wasn’t that high. And we are an inside sales driven organization. Or the go to market side. So it really made no sense to me to be in San Francisco as we know it was quite expensive. And then I just basically went and did Iraqi across other countries in the states. And I looked for partnership time zone and costs and then skills availability, which is best influenced by, um, the community of tech. And I looked at Colorado, I looked at Detroit and I ended up going to Austin.
Derek: [09:05] And when I arrived, um, uh, there was a concert or a festival on that, that a weekend, which I wasn’t aware of anywhere else and just tick the boxes. But most importantly it was the skillset that were there. And Net migration to Austin was 150 tech workers per day. We’re moving to Austin, Texas. So that gave me confidence that we’d be able to find the right people in the sphere of E-commerce, which is a, you know, it was very competitive. And then it’s about, you know, making sure as we said earlier on, but also that the culture is right. It’s all about the culture that people have that respect. And, and have a fun factor and really get excited about helping customers on a daily basis. And that’s allowed us to go from, you know, when I moved to Austin, we, we essentially were two people when we moved over to Austin because a lot of people, you know, were weren’t on for the transition from San Francisco to Austin. I needed a different skillset. So we rebuild the business right back up and now we’re just under 50 people. We made that change to two years ago. 50 people in Austin, Texas and the U S has now about half our business just over half our business.
Stephen: [10:07] It’s interesting to see in our pre-call, we were talking a little bit about that there are so many options for inventory management, right? As you say, the big players are coming into the market. Um, my experience with that come in from corporate world when the big players come in and they offer some of the bells and whistles, but usually for the larger, larger scaled players, not the smaller sellers, which I would consider myself in the million dollar sellers in those ranges. Um, they, they don’t give enough, they don’t reduce enough touch points because the corporate still has departments and still has lots of people involved in it. What’s been your experience with that?
Derek: [10:48] So like larger corporates have larger merchants have more complex requirements and they gravitate towards the bigger companies like say SAP or Microsoft dynamics or netsuite because those platforms are very configurable or skew, excuse me, they’re very customizable, but they’re only customizable by using engineers, writing scripts and giving clients what they want. It’s very expensive. It gets very expensive and they serve all sectors. Right? And what we did was we said, well, hang on, why don’t we start from scratch and build a platform, we call it a retail operations platform that is built for purpose for one sector and is not customizable. In other words, you can’t go in there and write scripts on it. You can obviously use an API for our more technical minded customers and therefore you can configure it very quickly. And the proof of the pudding is if, if, say, a customer of mine I was, I was talking to, uh, recently, they onboarded to the platform. There’s an a midsize, they identify it 7 million a year across 20 countries. They’ve got about six channels and they were able to move off a legacy system onboard to ours in just under 70 just under Saturday days. That’s calendar days, which might sound like a lot, but when you’re moving their whole back office onto a cloud system, if you were to go to a corporate that would take you about 180 to 250 days, and obviously as you said, is much, much more expensive.
Stephen: [12:17] So they had to be willing to make tradeoffs. Correct. What my experience, and again this goes back to the industry I was in, which in the newspaper industry, we were fierce competitors until the, until you know, Craiglist’s eight, a uh, eight our business, you know, eight our profits, right? Then all of a sudden we’d partner with anybody. Everybody was [inaudible] ball and all the, all the absolutes, all the things that we wouldn’t do. We’re all out the window. It’s like, yeah, we could do that. We could do that. Right. We were, we were much more willing. Is that what you’re seeing for, from companies saying, look, in order for us to, to remain, you know, competitive, uh, we need to be quicker. And so therefore we don’t need to have all that unique one-off exception stuff. Right? Is that, is that fair?
Derek: [13:01] Yeah. That, that’s exactly it. And the real world is, it’s a factor of huge change and very fast change. And for a merchant, that might mean price changing in a certain market, different products needed to be launched in another market or change from maybe direct to consumer, from B2B, whatever it is, there’s a huge myriad of challenges that a merchant faces today and [inaudible] they need a system that allows them to support that change without having to go to the company and ask for new scripts or engineering times. So it’s gotta be highly configurable. And that that’s where we, uh, offer a lot of value to our customers because we’re a hybrid platform. So what I mean by that is we allow our customers to obviously do direct to consumer, but also B to B. And we’re very configurable. So you just go in and you decide, you know, for example, what your, um, uh, trading thresholds are going to be on Amazon in Germany versus Amazon.
Derek: [13:54] In America, you might have the same product with different skews. You sat it all up, you have your margin targets, you set it all up. And the absolute goal is to have an environment where you are not touching orders as they are received. They, you are processing them right through to the warehouse where they are dispatched, whether it’s you or whether you’re using something like fulfilled by Amazon or a three pl or whatever it is for, for getting your product out to your customers. But you want to be able to do that all automatically. It’s essentially the term is managed by exception, which means say if you have a thousand orders in an hour, you want 998 of them to be processed automatically and for you to recognize the cash, take the payments, do all of that automatically. But maybe two orders came in and were flagged for potential fraud are maybe if it’s a B2B deal and the system has identified that they’re over their credit limits and it needs to be reviewed by maybe the accounts department and, and that’s, uh, that’s what customers want. They don’t want to be reviewing all the orders because as you know, that just kills margin every time you have a customer, sorry, a member of staff looking at order.
Stephen: [15:02] So, so what you’re describing, you know, and, and I always remember this reading, uh, the Jeff Bezos book, that anytime a customer calls, anytime somebody has to get involved in something, touch something, it’s a failure. They always saw that as a failure. Um, it’s not right. It’s just there is a cost. And you can sit there and say, well, it only takes me a minute, Derek. I mean, come on, right? What’s the big deal? Those minutes add up, right? If you’re scaling, it’s an enormous, uh, it could be an enormous cost and it’s a place you make mistakes. Now I know you’re going to find this hard to believe. I do make mistakes. Um, and so therefore, uh, if human intervention is involved, the, the possibility for mistake is greater, correct?
Derek: [15:48] Completely correct. We did a survey of 4,000 consumers and 200, uh, merchants in the u s we were looking to understand what was the cause of, uh, uh, customer dissatisfaction, uh, around negative reviews in particular when people were getting, you know, two stars or three stars. And we, we, we actually mapped out all of the phrases that were used in those reviews. And we built a picture where it was pretty obvious that you saw things like, I got the wrong product or the shipping time was wrong, or they send to the wrong address. It’s usually errors, right? And as you say, when customers get a product, or sorry, when merchants get the right product and then they enjoy success, the next challenge they have to overcome is to ensure that they’ve a very high, very low level of errors because errors directly impact customer reviews.
Derek: [16:44] And we also found out, we’ll sort of quantify it in the, in the survey, that the difference on revenue was a whole, um, 30%. So clients who were managing to get five stars on their customer reviews on a 90% basis, we’re making 30% more revenue as opposed to those ones that were doing, um, three stars. So it’s a huge impact on customer satisfaction, which as we all know, uh, impacts directly the bottom line and lifetime value from those customers because you want them coming back to the second time cause it’s very expensive to serve customers the first time you need them back to, to get them profitable.
Stephen: [17:22] The other thing now, and I want to go into, uh, cause you guys have done a really good job identifying the, I again, I call it touch points, the steps in and taking an order, right and selling something and I want to go through each one of those and how we can reduce that. But the other thing that your software does, which is surprising to me is the accounting side. Now, uh, my listeners would know that I’m the former reformed accountant. Uh, so I’m intrigued at what, why did you decide to add that in? Um, it, are you solving two problems at once? Is that kind of the concept?
Derek: [17:55] Well, it’s, it’s directly linked to that, um, uh, error point that you made earlier on. And the other fact that the number of sales channels both on the buy side and the sell side is getting more and more complex and we’ll probably continue to do so and is buried. So because of that, the founder of bright bro was a, um, and he started the company 11 years ago. I joined just over three years ago. And the reason I joined was because from day one he built the system to have automated accounting, which is essentially, uh, um, as orders are placed or taken, there is a journal created with the necessary adjustments and that essentially creates a, uh, the clients, um, accounts for that business and for larger customers. Um, so we, we have customers that are doing maybe 50, 60 million and they might be divisions of, um, uh, much, much larger companies that have maybe SAP in the, in, in, in headquarters.
Derek: [18:57] We just work as a sub ledger to that general ledger. And, and in both those use cases, the key goal is to ensure that we reduce time and error rates within the reconciliation, reconciliation tasks that occur when you’re buying and selling. We try and automate it and we do automate it. And that’s the power of a [inaudible] in terms of the daily planner for, to, uh, to a finance department or a CFO. Um, but we don’t do things like payroll, so we’re not a fully, you know, [inaudible] we’re not a generic accounting solution. We’re built specifically for merchants online. Uh, and obviously those who have stores and those who want to do things like payroll can plug in easily or we can plug in, as I said, from a s a behave like a sub ledger to their general ledger, if that makes sense.
Stephen: [19:43] Oh, it makes sense. But it’s, the payroll part’s easy, right? Most people use a service or a company that stuff’s easy. The challenge is inventory. Cost of goods is one of the hardest things for people to get. It’s just one of the hardest things for people to get. And there’s so many moving pieces. You’re selling thousands of widgets. Probably, you know, 12 1530 or some of them, some of the people that listen to this will be selling thousands of products a year and unique products and sometimes the same product costs. You know, they buy it at seven different places and then they have tennis shoes or sales tax included or not included. And then he got returns. Then they have, they’re selling on Walmart and they’re selling on Amazon. They’re selling on Ebay and all those different, they have their own Shopify store. It gets complex. That’s where it’s complex payroll. Derrick, how many hours you worked this week? Boom. Here’s your pay. Okay. Yeah, the rest challenging.
Derek: [20:37] Yeah. And, and like for example, our, our software obviously incorporates cost of goods sold for all products that are listed are, you know, within, within the system. And that’s really, really important because it drives our customer’s decisions around pricing. Because as you know, pricing varies enormously depending upon the chosen go to market model within the channel that they’re choosing to drive, whether it’s Amazon or Ebay or a specific marketplace or whatever. So I’m the founder of Bright Pearl, built all that in from day one. And all we’ve been doing is just essentially laying, entering in a whole suite of automation rules on top of that cause he built the workflow if you like, to run accounts that are created automatically as our clients trade across those channels. But now that the next part of the uh, challenge is to light up that concept of management by exception at the account level.
Derek: [21:28] So that’s having automation rules so that most orders are processed through and you manage by exception, which is what we do today. So we’ve a very powerful automation rule engine, if you like, where our clients during set up, um, with our professional services team, we will, um, uh, ask them what their challenges are and then we just configure the system accordingly and if they want to change that as they’re, uh, going on with trade and growth, it’s a very simple process to set up new automation rules and then obviously report on that and manage by exception. It’s a big issue.
Stephen: [22:01] Oh, it’s a big issue. And I’m going to make sure I’m correcting this. And the way I read those [inaudible] I could have multiple ways of handling, um, a sales methods within my channel. So for example, I’m selling on Amazon, I’m selling FBI, I’m selling merchant fulfill and I’m drop shipping. All three of those can be managed through the software, correct?
Derek: [22:21] Oh yeah, absolutely. Right. And then all three of those have a different concept or concept, but yeah, exactly. And they have their own unique costs of good cells.
Stephen: [22:31] So, well, does that help then? Uh, sorry, does that help client, you might make my mind think way too. You’re talking accounting. I mean they’re, I mean, this is exciting for me. I mean, this is us. I’m originally a chemist and I’m talking to an accountant. Oh. So I get excited about this. All the nerds that are out there like, yeah, I get this stuff. But, but seriously it, but this could take somebody who’s, who’s just doing FBA for example, and fulfillment by Amazon and they want to add drop shipping. This gives them the ability to do that. I think that’s the thing, when you’re looking at your business, what, you know, we use quickbooks. It does not allow me to sell additional things. I mean, it handles our accounting, right? It handles our taxes and you know, that kind of jazz, but it doesn’t allow me to grow our business. What you’re describing with inventory management is you’re saying, Steve, hey, you’re showing FBA. You could have drop shipping and this tool will allow you to do that. That’s a revenue enhancement tool.
Derek: [23:28] Correct. I mean, our, a lot of our customers will use our platform to experiment, uh, in sales channels, our countries and territories. Um, because you know, for example, you could set up an Amazon channel in Germany if you’re a US company and you decide to sell your product through that challenge. Germany, the set up time for Amazon with all of the corresponding accounting changes is about three to four minutes within the software. And you can be up and running on Amazon. So it’s, it’s, it’s, it’s designed to be flexible with the guide to the pressures in modern Pramada merchants, which is sales channels come and go and they change in terms of their relevance and their cost models change. Cause that’s the other thing that clients, uh, are very keen to work with us on. And we do, you know, um, Amazon and other channels, they’re continually changing their rates, point of sale providers, payment providers. You know, you need to be able to have flexibility and move your strategies in the sales channels but also on the payment side as well. Cause we have an integrated payment engine, which, which we don’t take a commission on by the way. We just allow our customers choice because we say, you know, you need to have choice in this area. Cause that’s my business model is to, is to support choice, um, and access to a single system rather than try and nickel and dime our clients.
Stephen: [24:43] And again, that’s one of the smart moves again, is you’re, you’re niched down and you’re saying, hey, we’re fixing this segment. We’re not all things to all people and you’re not offering me a lot of customization because to be fair, best practice would tell you that this is probably 99% of the businesses, right? Uh, the exception ones have to go off and get custom stuff. Right? I mean, I think that that logic plays through, correct.
Derek: [25:11] Correct. The jobs of work and the workflows that are needed to support the channels that we’ve been chatting about, they’re pretty consistent, uh, in terms of you need something that’s very solid that not only presents the minimum opportunity for humans to create error, but also gives you clean, timely, and accurate data so you can make decisions within your business. And that’s what we’re focused on because when you customize a system and you allow people to script or make changes specific to a client because someone thinks it’s a good idea, you actually corrupt the data 100%. And, and, and as we know that nirvana or machine learning or our, our, um, assisted decisions or whatever you want to call it, all of that doesn’t work unless you’ve got clean data. So we’re very focused on a single system that produces timely, accurate, and complete data. That’s why we have our own distributed order management, inventory management, integrated accounting, warehouse management solution and a point of sale or with one, uh, it’s all on one platform. It actually runs on, um, uh, um, on Amazon AWS and, and, and that’s really what we’re focused on because if you’re not data-driven as a merchant, you’re going to have a challenge because you’re not going to be able to protect your margin because you’re going to have to have people touch orders. And when you do that, you’re losing a competitive advantage. Um, yeah, you know that story
Stephen: [26:32] well [inaudible] the other thing that people need to hear is that institutional knowledge. So when you do that customization for that customer, and Steve Handles that when Steve Leaves and Steve will leave at some point. He is, Steve has options today, right? There’s, they might tell him that you can, there zillion options, um, that knowledge leaves with it with Steve. And so you don’t want to customize that stuff because anybody can just drop in, pick up right where Steve left off because it’s exactly standard, everything’s done the same way. There’s no deviation. That’s powerful.
Derek: [27:05] Hmm. It is. And the, the other reality of the world today for a merchant is attrition rate is very, very high. Uh, for merchants who are running their own warehouse or uh, even running their own sort of sales channel, online virtual, uh, go to market approach attrition within merchants. In another survey we did, uh, it was about two years ago. Granted, but it’s very high. It’s about 28%, 28, 30%. So, you know, that’s a lot of staff coming in and out. And it always amazes me when I meet with merchants and I say, so what’s your staff training playbook? Because if you have invested money in systems like a broker or you know, it still needs, uh, uh, a certified training program, you have to have and have an ability to get people in and very quickly get to understand all the processes you’re running.
Derek: [27:55] Understand the playbook. If I could use that term. And then, and then go from there. Because if you don’t do that, you’ve got that attrition point. And then if you’ve got a configurable system where you’re doing lots of scripting through customization, that problem to your point gets even worse. So that’s a huge challenge for small, midsize and even large retailers. I’m, I’m always amazed how many people I meet who are in the, on our customer side. And I say, so tell me about your training plan, uh, in, in terms of the workflows that you want to automate. And, and, and it usually results in a, in an interesting discussion, which we obviously help them with. Cause
Stephen: [28:31] yeah, they, they basically sketch one out on the Napkin and say, yeah, here it is. This is it. I’m going to get to it, Derek. It’s going to happen.
Derek: [28:39] Yeah, totally. Totally. And so, so I think this world is what don’t mind, what I’m saying is the software is not, it’s not the whole solution. It’s amazing how much focus needs to be put on once you’ve chosen your tech stack, if you like and you’ve chosen a platform like bro pro, you got to really focus on how am I training my people to get the best out of it. Because, uh, if you don’t, you know, you’re, you’re not, you’re not getting good return and you’re not utilizing the platform because you haven’t been trained your people to do that.
Stephen: [29:08] And my recommendation to people is find a system that works and adapt to that rather than creating your own somebody, somebody you guys, I liked this after years of discussing workflows with retailers from all industries using different business softwares and operating methods. We’ve drawn up an overview of typical order workflow. When I read through this, that’s it. Now we might use different terms. We might use different, oh well we, we do, we call it this. We don’t do quality checking. We look to make sure it’s right. Oh, okay. Yes. The same things too. But anyway, so you’ve already done that. So just to it and then you don’t have to think about it. You can take yourself out of that picture. Well, let’s walk through that because I think what’s interesting to me is these 10 steps. I don’t think people realize how many steps there are.
Stephen: [29:52] We do a lot of merchant fulfill out of our warehouse. So every one of these are pain points in our business. Every one of these, right? So, so let’s walk through these. Okay. I’m creating the order, right? So that’s what we’re going to start. So there’s a, and I’m going to go, it’s bright pearl.com. Um, there are blog posts there and this is a really good one. Um, that I like, uh, because it’s automating your ecommerce orders. I think every single person has to be looking at automation in some form, reducing your touch points. Every time you touch something, there is a cost. It means you’re not doing something else or somebody else isn’t, or you can make a mistake. So let’s walk through these. So a, there’s a guy that comes along with this. You can sign up and get, I think you can get it for free. Correct. Get well, uh, there’s a guide here that you can get. Yeah, yeah. But, but I just want to want to touch through some of these things. So if you could walk me through them, um, and I could read them off where if you want to start with it, would you be okay? No, that’s okay. I’ll do it. Yeah. So we’re going to create the order. Okay. So let’s talk about creating the order, uh, where right. I mean that’s really where it starts.
Derek: [30:59] Yeah. So, so if we talk through at DDC, so direct to consumer, the consumer’s online and they are interacting with your website. Maybe you’re using a platform like big commerce or Shopify or Magento. Once the order is captured within that form, all of the details of that order need to be immediately and in real time, uh, checks against your inventory, as you said earlier on, to ensure that it’s available. Right. And because you don’t want to get into the situation where you’ve got people ordering in different channels at the same time. And you are saying that a product is available when it’s not. So the key thing about the order placement is to ensure that there’s a real time connection between the ecommerce platform that you’re using and your back office solution. And that’s why we invested in our own technology to integrate with the Shopify, Shopify plus mud, big commerce, Magento, to ensure that real time sync happens.
Derek: [32:00] Cause we don’t do that. Then the customers can get themselves into a situation, especially during peak periods where people start ordering things. Um, and those products are stated to be available when an actual factor, not so real time. Tony accurate complete data again at that point of order is vital. And um, and then behind that, the other nuance that exists is you might be using different shipping methodologies, you might be doing different fulfillment and you need a system that can allocate the correct, uh, you know, the most advantageous shipping method whereby you’re getting the best price. Maybe you know that a product is in a certain geographical, um, and also for any third party providers that you’re using. So there’s the, there’s the, is the stock available and then is the fulfillment, is the fulfillment option for you, the one that’s going to give you the best margin and the fastest delivery time for the customer. So you have to have that piece nailed. And we’ve put a lot of work into, into doing that. And that’s just on direct to consumer. Obviously if it’s a B2B, if it’s another business ordering stock from me, that’s a different thing that’s more involved, more credit checking and that’s a different, uh, a different use case. But also supportive.
Stephen: [33:11] It’s also supportive. That’s what I think. So if you do that, there are some people that now have their own private label brand and they’re now getting into selling to other sellers, other Amazon sellers or other e-commerce sellers in general or um, and maybe even a brick and mortar. Those rules can be addressed in there. And the, the reserving of inventory, which is critical, right, to saying, hey, that inventories, you know, taken out because it’s already accounted for. Steve’s buying that. Right?
Derek: [33:38] Correct. And then, and then obviously the flip side of it is you also have to have an eye on the Ravi reverse logistics side of it. So obviously a lot of customers today in particular, the younger types, they like to return product or maybe perpetrate [inaudible],
Stephen: [33:51] no, no, never seen that.
Derek: [33:54] And you need to make sure that you can activate reverse logistics. And more importantly, I can for that correctly from an accounts perspective in real time, that’s really important to ensure that you don’t get caught off track. So that’s, that’s one area. But then obviously there’s the physical aspects. So we have to have a, we do have an integrated point of sale, um, which, uh, also, uh, is used by our customers, both obviously in bricks and mortar, but also that shows or events. It needs to work in offline and an online. And you have to have a clever system that is able to reconcile the available stock. Um, so for example, if you’re going to go to a trade show, you know, it’s going to be out in the middle of nowhere. Maybe you’re selling to auto parts and you’re going to a big, big show when there’s no wifi or connectivity, you need to be able to set up what we would call a virtual warehouse, allocate products in there based on what you think you’re gonna gonna sell.
Derek: [34:50] And then you go to the store and then that virtual warehouse will then be used to support that particular event. And then when you get back to the office, you would just shut that down and all the orders would just flow through anyway once you connect back up to Wifi. So there’s the other aspect of ordering, um, and the complexity that you need to be aware of or get a system library called the managed for you when you’re doing things like trade shows, are you doing bricks and mortar? Because obviously that’s the other side of the equation rather than just online.
Stephen: [35:16] I, I sitting here thinking about the size of the accounting staff it would take to try to do this, you know, 10 years ago by hand, you know what I mean? Or, you know, impossible. Yeah, it was, it was massive. Very cool. It’s impossible. That’s why we’ve seen so many merchants grow. Yeah. So quickly and so many merchants not grow. How many, I, I don’t know how to UK is, but in the u s the retailers that are closing down because of inventory, right? Poor inventory management. I think a toys r us, for example, amazing story that should be still here, right? Everybody’s still buying the toys. My grandkids want toys. They expect toys this year, but they’re poor inventory management. They’re, they’re bad buying. They’re bad. Everything. They’re e-commerce was terrible. They’re out of business. They literally closed. I mean, have you seen that in the UK too?
Derek: [36:05] Oh, we, we’ve seen all, uh, businesses that, you know, I think there’s another one over here. The example is, um, uh, mother care, I think the company was called and they did sort of products for expecting mothers like programs and baby products. They were huge 10 years ago and they just went last, last year for exactly the same reason. Um, but yet when we look at our customer base, we have clients that have grown, you know, in the hundreds of percent by offering really good customer service, online, big range of products and just nailing the inventure challenge using tac like, like broker. Um, and then the others. The other aspect of accurate eventually, which I think is important is being able to have a system that is recording what your, uh, order profile is looking like and then giving very factual good recommendations to your merchandising team or your buying team to place your orders for, you know, the next period. So we, we are, we have integrated um, inventory. It’s basically a demand planner. It’s a, and it’s a, it’s a, it’s an inventory forecasting tool with regard to what you need to order. And that’s the other side of margin erosion. Cause if you order incorrectly after a big busy sales period, you can really, uh, you can really tie up a lot of cash and, and lose your efficiency edge.
Stephen: [37:26] I bought a, a, a company that sold electronics. I bought almost all their inventory in the owner when he went out of business. The owner said that it was his employees kept buying inventory that they didn’t need at the wrong time. And it just, and I ended up buying all that inventory and I’m thinking to myself, is that their folder? Is it your fault as a leader? I mean, is that really or did he not have the right people in place to be able to help you know him, help him understand it. Um, when you, when you’re talking about customers, um, does it also, does the software do a, um, customer service management at all? I mean, is there, am I able to track customers and capturing info?
Derek: [38:05] Yes. So once again, the founder who was a trader himself and the technologist, he realized that he needed to have a integrated accounting but also have at the data level, everything built around the customer and a customer id, which is slightly different for direct to consumer as it is to be, to be, oh, I’ll get into that. But there’s a lot of complexity there. But yes, is the answer to question. So we, we are able to allow our customers to identify, for example, the least customer are, um, customers who are serial returners are, you know, there’s all bunch of reports that people want, uh, relative to the customer type and how much lifetime value they’re there, they’re deriving from those customers. And they use that to then run sophisticated marketing campaigns against using that data. And that’s where I stopped. So all I do is link all orders to customer ids and run reports off that linked with the financial information on the buy and sell side. Then I stop. And if you want to run a comprehensive integrated marketing campaigns, you’d buy something like Clavio and plug that into April. And we have a pre-integrated connector for that. So, you know, you just set it up and then off you go. Our focus once again is on the timely, accurate, complete data as it pertains to the customers and all of their history and the cost of you servicing that customer, which, which for me is the really important piece.
Stephen: [39:32] Yeah. And that, but the ability to plug in really makes it make sense. Okay. All right. So now we’ve, we’ve gotten that inventory accounted for, right? Where were we? We made sales. We don’t know anything else. Right. We made sales on lots of different places. Right. And what if you think of your, your, your best user, how many channels do they sell on?
Derek: [39:53] Oh my God. I’m like best user.
Stephen: [39:57] Yeah. The one who’s really squeezing you guys using every bit of juice you give them. You know what, instead of take this too
Derek: [40:03] profiles I have, I have customers that use a lot of sales channels
Derek: [40:09] to sort of set a lot of volume, a lot of volume, but at low margin. And then I’ve got customers that very much focus on one or two channels, but many markets and become experts at customizing that strategy in those markets for that particular channel. So they’re the two flows. So to answer your question, um, you know, someone might be selling, I’m just thinking of a hydroponic company that provided the cannabis market and uh, they operate on, I think it’s 26.
Derek: [40:43] they run obviously blow Pearl. They are doing trade sales. They’re now opening up another company. So multi-company which basically means another, another account. And we don’t do integrated accounting for multi-company. We have a solution, but that’s something where you get into big company, corporate worlds. We’re very much focused on one account, all of the data for that account and company. But we do have customers that now are coming to us and say, Hey Derek, I want four companies running on broad pro. Not a problem, but we don’t do multi-company accounting at this at this stage. But that’s something that I’m looking at for next year. So 26 channels,
Stephen: [41:23] 26 channels and, but you also have customers, cause I think people are going to be like, well that’s too big for me. I’m, I can’t relate to that. But you also have small single, maybe just Amazon sellers, correct?
Derek: [41:36] We do. We do. And, and, and there’s, there’s very few of our customers are trading less than a million dollars in GMV. Um, and that actually was a change that I introduced when I joined because Bri Pearl evolved by having a self service integrated platform or anyone, you could just buy it for $20 a month and set it up yourself. But the cost of support and the huge amount of complexity that arises from dealing with that number of customers trying to figure out what you’re going to build to be able to service everyone. It didn’t work for probably prolean it’s 30 days. And I came in with a view of doing a review of the tech and mapping it to a segment in the market that would most, uh, get the most value out of that technology and would, uh, put us in a position where we would really focus our resources. And, you know, we do six releases a month into the product. We need to make sure that those six releases applied to everyone. So we’re very focused on the 1 million to a hundred, 150 million cohort, and every year that gets bigger as the platform evolves. So when I, if that makes sense.
Stephen: [42:49] Well, no, it makes perfect sense. So it’s it, again, it’s that company that’s really committed to building that brand or building that business. And they’re trying, they, they’ve scaled, they don’t want to add a giant staff. Maybe they were a one or two person operation. Now they’re, they’re at that place where they now need to deal with these real big, big boy issues if we will. Um, and so yeah, we, we two types. It’s the
Derek: [43:12] customers. We’ve, we’ve got large international companies that the teams realize that they can’t leverage the legacy ERP solutions to compete and they come to us and we plug into their HQ is accounting department and they use [inaudible] as a sub ledger and all of the features we talked about earlier. So we’ve got quite a lot of customers that do that. So brands like Yassy our stance in, in, in, in Europe would, would, would, you know obviously are larger global companies, but they would use our platform in Europe for that purposes. And that’s one profile, a customer. And then the other one we, we look for merchants that have got the product market fit story, right? They’re enjoying high levels of growth. And they’re looking for expansion. You know, we’ve got a one, two, $3 million business, how do I get to 10 million with the same level of margin performance, uh, along that journey.
Derek: [44:04] And that, that’s where we come in. Because as you said, the world gets a little bit more complex, probably beyond a million or beyond sort of 5,000 skews, um, are maybe beyond a 10 x, sorry, 10 suppliers per skew with whatever your model is, then then you need a system low broker, cause otherwise you’re back into the world of having to hire a techie to manage all these disparate systems. Cause there’s tons of systems out there for inventory management, for paws, for accounting, for forecasting, and at, you know, it’s a good cheap way of doing that. If you’re starting at the business, you’d definitely would put all those apps together and you’ll get there. But then to scale is where is where you need a platform like library pro.
Stephen: [44:46] Otherwise it’s a margin eater. I mean it is definitely, it’s a, you’re gonna lose. Yeah, I agree. All right. Let’s talk about fulfilling the order. So, you know, like I’m thinking of one of the big clients that we have in our warehouse, they’re using a company called shipstation, um, that integrates with Amazon, with Joppa Phi, with a couple of other things. How about with you guys? What works with Bright Pearl?
Derek: [45:08] Yeah, shipstation works with bride Pearl. Um, you’re either going to, so if you’re using an ecommerce platform and your just got bad ecommerce platform and you’re say just sounding online and you’re not really selling on multiple channels, you can plug it directly into a shipping provider. Um, if you’ve got a lot of channels and you’re serving a lot of markets and you need to plug in the, uh, the shipping provider into the Omni channel platform. In other words, the back office, we obviously, uh, support that. So we work with a whole range of shipping providers, uh, and have pre integrations with that. And, uh, and we’re just looking at the, uh, viability of allowing customers to print labels or arrange the printing of labels from within the, uh, the distributed order management solution. But to answer your question, we integrate pretty much the same as all the ecommerce platforms. It just depends on what the customer wants. If they want to integrate with big commerce or use their shipping, that’s fine. If they wanna use Shopify, that’s fine. Ship stations, there’s a whole bunch of providers out there. Uh, but we, we’ve just built the integration points to those guys.
Stephen: [46:17] Right? Again, uh, you’re in your lane, you’re staying in your lane. Um, I am not a shipping provider. Yeah, no, I get it. And, and, and here’s the problem. And when you look for that all encompassing solution, they’re usually really good at this. Or they’re really good at that. And that’s how you end up with all this customization and you’re saying, no, this is our lane. We’re staying in it. I think this next one is really important. Updating the order status because I think if there’s a place that I see a lot of failures, communication with customers, and we’re guilty of it, we’re guilty of it sometimes. So the customer’s like, Hey, we never knew. We never got an update with the order. And then there’s a failure if they have to call us, I gotta pay somebody to take that call and handle it. So there’s a cost. Yeah, yeah,
Derek: [46:57] yeah. And, and there’s nothing more annoying to a customer that they get on your side and you go through all the process to pick the product that gets to the order page. The money can get to the payment page and then all of a sudden it flops up to sale. This thing is not available or it’s not two days of delivery, it’s 10 days or or whatever. And that creates a lot of frustration with customers and it can result with a lot of, um, uh, abandonment, uh, of the process. So the, the importance of having connectors between your back office and your front office, just the way I would describe it, your ecommerce platform to you, to your back office ops platform is you gotta have connectors that are validated as being real time. And you have to have that if you want to avoid that, that type of situation, that’s really, really important.
Stephen: [47:44] Hmm. All right. We moved on. We, uh, well we were packing the shit, but we understand that we’re going to determine the shipping method and printing the label. Hence again, that’s where like we use shipstation and we can immediately, you know, based on profiles, I immediately know what the best way to do it. Updating the customer though. I think that’s an important one because it’s not just saying, hey, Derrick bought this. There’s more to it than that. Right. Again, right. Yeah. Go ahead. Talk about that. Yeah.
Derek: [48:11] For example, customers like to be informed as to the state of their order in particular phase of the journey from the order to them receiving the product. So Brian Burl has to support that. Then because we’re an integrated system with, uh, with our own warehousing solution and we obviously support other warehousing solutions and we ensure that the feedback loop on the comms goes back to the customer. So for example, when the order is dispatched from the warehouse or maybe from a three pl or FBA, that that is automatically routed through and back out to the ecommerce platform and then masses directly through to the customer are, you could set it up directly from at the back office and say if someone’s ordered it from Amazon, you can configure it so that they get the message from ABC trading. Hey Mr Customer, thanks for your order. You’d be glad to know it’s just being dispatched and we with you on act. So that whole feedback loop, if you like, on getting customers up to date, because if you don’t keep them up to date, they’ll start hitting the phones. And then once again, you’re in a position of margin erosion. You know, people having to talk to people. You don’t want that. So
Stephen: [49:16] I don’t like talking to people. Do you like talking to anybody anymore? I love talking to people. I keep on learning. No, I mean I, all right, let me say it that way. I don’t like talking to customer service. Press one for this department. Press two, or say to say, hey, that, no, nobody likes that stuff. And anytime you do that again as Amazon’s model was, that’s a fail. All right, final, final one on this one is updating accounts. And I’m assuming the accountant, Amy’s getting a little excited. You’re talking about the general ledgers, right? In the inventory, uh, the inventory accounts, correct?
Derek: [49:49] Correct. Absolutely, yes. And they’re all automatically created. So whenever there’s an order, whenever an order is, um, taken and processed and the quote to cash process is finished, then the journals will be created within the system automatically. And then those journals are available for a future auditing, reporting, whatever it is, profitability, analysis, profitability, analysis, cashflow, um, whatever it is you specifically, uh, set up. And, um, that’s really important. That sort of obviously visibility in real time on what’s profitable, what’s not and what your costs are. So that’s, that’s they’re in, in pretty much real time. Um, unless, you know, you do a trade show and that the iPads are offline for 12 hours or something, that would be the only use case
Stephen: [50:40] in, in what you’re seeing out there. And I, so maybe let me qualify this second. First off in this guide again, this guide is free. They give it to you. Um, those steps. I think any business, I don’t care how, what size they are, they’re not doing $1 million yet. They’re sitting there, they should take these things and walk through their process, every one of these in this and document their process because I think then you could sit there and say, hmm, I don’t do this or I do do this. I have an automated way of doing it. Great. You don’t concentrate on that. Concentrate on the ones that are not automated. And you could start, as you said earlier, piecing your own system together. And then once you want to scale to a much larger, then you look for an all encompassing one. So I think this is a great place to start. When you’re looking at the omni-channel seller, the, the ones that are seeing the growth, what are they doing right? Um, you know, you’re describing people that are selling, you know, 26 channels, including trade shows. I mean, is that really what you’re seeing the private label brands starting to do? Right? Is this selling it across all these different places?
Derek: [51:44] Yeah, it’s um, um, it’s direct to consumer. So people who have got their own brands are, um, are providing a, uh, sector, uh, service. So automotive parts or hydroponics or something like that where it’s a single place. You go to a new gap, you know, all the DIY tools that you would need. So there’s, there’s two, there’s two areas of focus. People with their own brand are people who are just serving a vertical. And um, there are the companies that we see that really are nailing the, um, the sort of centralized repository of data and they can in real time see the performance of their channels and more importantly, make the right decisions with regard to drop shipping, distribution, shipping costs, whatever. They’re, they’re the ones that are just killing it. Um, you know, own brands and people who are serving sectors, the guys who are selling a lot of products and stacking it high and using pricing algorithms on, I don’t know, Amazon or to always be the best price, they’re there. They’re in a continual sort of battle with, with Amazon and all of the tech that they use to sort of counter gaming within the platform to ensure that their, uh, advertising system is not, sorry, advertising revenue is not eroded. So those guys I see more challenges, they’re still growing because the, uh, erosion of the traditional cert way of marketing, my market’s
Stephen: [53:12] growing, so they’re still getting a piece of it. But it’s a diminishing piece because when your only competitive advantage is price. So I always say this, Derek, somebody who’s got a bigger zero, they add another zero to that check my prices as long gone. Correct. So it’s about choice.
Derek: [53:28] It’s about, um, uh, the, the, the, the customer experience. And back to your point around getting merchants to think about, well, let’s map out our workflows that we’re going to run on an operations basis. Step back from that and actually map out, you know, your desired state on the customer journeys you want people to have on your website or on Amazon or after the Oh the order. It’s like a two day workshop to get your team in a room, which sounds like a lot of time but it’s so well worth the time to do that, the customer experiences you want and then map out the workflows, maybe using our guide and then just identify the gaps and you can pretty much see exactly where your problems are. You don’t need to buy a system like broad pro to see that. Obviously we will be hopefully part of the solution. But so many people just turn immediately, let’s just buy some tech and then I get a little talk to me about your workloads today. And they go, uh, well we will have a view or they’ll talk to me for half an hour. But nothing [inaudible] documented. [inaudible] this is the, the, the customers that are nailing that piece. And then using technology like Breitbart, they’re the ones that are in the, you know, a hundred percent growth margins off the charts and just, just taking market share.
Stephen: [54:41] Love it. All right. Best Way to get in touch with you if the people want to follow up. So it’s [inaudible] dot com, um, and again, there’s a ton of resources and it’s free, that part of it. Um, but if somebody wants to follow up, what’s the best way?
Derek: [54:57] I’ll just email me, um, Derek, uh, dark oh Carol pro, curl.com and I will respond.
Stephen: [55:05] Ah, two R’s and two L’s. Um, and I’m going to get that. Okay. So the way I end every episode, um, is I always ask for how to get people past the point of stuck, right? You’ve been stuck. You’ve, you’ve worked on a lot of tech industries, right? You’ve gotten to that place. A Bright Pearl’s probably gotten stuck, right? Or people got stuck. What’s, what’s the best advice that you would give somebody who gets to that place of stuck and how they push past it?
Derek: [55:34] Uh, d very clear on the difference between a symptom on a root cause when you’re looking at a problem. And what I mean by that is, uh, when you go into a business like bright bros, I did w which had its challenges. Everyone has an a point of view and everyone’s very quick to surface up their, uh, remediation or their solution. And it’s very important that you go back to basics and build out a set of questions that are built around the customer on the desired state for the business and record what the current state is, but then map out what the symptoms are and then look working with the team to find the root cause. Um, that’s hugely important for any type of business that’s stuck or any problem that’s being presented. Look at the data, look at the root cause, gathered the symptoms, and then you’ll have all of the three things to be able to triangulate a solution. And that’s what we did at, at bright pro when I, when I came in, which then resulted in us moving up market, so to speak, to sell to bigger customers. Um, uh, with a different set of monetization strategy, which has been now working really well for us. I love it.
Stephen: [56:43] Thank you so much. I wish you nothing but success.
Derek: [56:46] Thank you. Pleasure to be with you. Cheers.
Stephen: [56:49] Okay, great guy. Um, I love the way they know their lane and they stay in their lane, not giving a million options because quite frankly, you don’t need them. What do you need? What is it? The 80 20 rule, right? You know, 80% of your results come from 20% of your processes, right? Those are the ones you want to focus on. Whereas he says, just do the exceptions. You know, let the rest, let 99% of your business operate smoothly without getting interference and then just work on those exceptions. The ones that go wrong for whatever reason. Now the smart person then mitigates why it went wrong, right? Get rid of some of that stuff, right? That’s good management and then that gets even easier. So I think it’s really smart. A smart guy. Reach out to him. Um, if you have questions, but check out their website, uh, bright pearl.com and go through some of their blog posts, you’re going to learn something and then map out your business and let me know how it goes. And if I can help you in any way, e-commerce, momentum.com e-commerce, momentum.com take care.
Cool voice guy: [57:46] Thanks for listening to the e-commerce momentum podcast. All the links mentioned today can be found at [inaudible] incomers momentum.com under this episode number, please remember to subscribe and like us on iTunes.
