In this instalment of our eCommerce Influencer Series, we are honoured to have Etail Solutions CEO & Co-Founder Michael Anderson join us.
Etail Solutions is an eCommerce software provider for leading internet retailers and brands that sell or want to sell directly to consumers.
In this interview we find out more about Michael and Etail Solutions as well as get his expert insight into some of the most intriguing parts of eCommerce now and in the future.
So with that said let’s get straight into the chat with Michael.
Q: For anyone who doesn’t know you yet, who you are and how did you get started in the eCommerce industry?
I’m the CEO and co-founder of Etail Solutions – an eCommerce software provider for brands and online retailers. My background is in ERP systems. But ten years ago, I worked for Taylor Corporation in technology mergers and acquisitions. During that time they acquired an Enterprise Resource Planning (ERP) software company.
This ERP system offered an integrated eCommerce platform, but its capabilities were limited. It couldn’t support multiple sales channels or fulfillment methods. Online retailers were forced to use hacks and workarounds. If they wanted to sell on six different channels, they had to create six different SKUs and product descriptions.
An ERP system that could solve the “one-to-many” problems created by online multi-channel selling didn’t exist. So, my developer friend and I started building a proof of concept on nights and weekends. We envisioned a system that would centralize data from all sources and automate the processes that are essential to running a multi-channel eCommerce business.
I was introduced to a large online multi-channel retailer who had five Amazon accounts, three eBay accounts and a website. They sold shoes in all sizes, shapes and colors – one of the most complex product types. We visited their warehouse in New York. It was sprawling.
There were plywood shelves and computer workstations everywhere. Employees were downloading orders and updating inventory as it was sold and bought. The company was doing over half a million dollars in sales a month, but their manual operations were preventing them from growing any larger.
I made a proposition: “You pay us to develop the software. We get to keep the intellectual property rights. You get to use the software.” They agreed and the rest is history. The deal funded Etail Solutions for the first year and a half.
Q: Looking back over the past three years, what do you think have been the biggest changes in eCommerce?
The number of brands and manufacturers shifting away from wholesale and toward direct-to-consumer (D2C). The driving forces behind this move are what you would expect, profitability and growth. D2C also allows brands and manufacturers to know which customers are buying which products and how often. Having this type of visibility isn’t possible when selling wholesale.
Not only that, consumers are starting to prefer buying direct instead of through retailers. Millennials are causing this shift, viewing the product data of brands and manufacturers as being more credible and appealing. They’re diligent in their research and more demanding when it comes to customer experience and price.
Does this mean every brand and manufacturer should make the move to D2C? Not necessarily.
To do it right, there’s a certain level of operational excellence required. Transaction life cycles are much shorter than brands and manufacturers are used to. Managing high volumes of single line orders is something they’ve never done before.
If they’re not operating efficiently, they’ll have trouble meeting customer expectations and marketplace requirements.
Q: How does Etail Solutions approach the current landscape of multi-channel eCommerce?
Multi-channel eCommerce is challenging for brands and online retailers. For-sale quantities must be updated across all channels when inventory is sold and replenished. Product data must be configured to meet each channel’s listing requirements.
Product prices must be raised or lowered across all channels when costs or competitors’ prices rise or fall. Orders must be fulfilled within a certain time. Without a solution to centralize the data and automate these processes, things can get out of hand fast.
Our multichannel eCommerce platform allows brands and online retailers to do these jobs as efficiently as possible. Our clients can run their businesses for less than their competitors. They get higher net margins due to lower operating costs, since our platform automates the manual work that employees normally do.
We’ve helped our clients build an unbeatable competitive advantage: their operating costs are lower and their net margins higher, which lets them offer lower prices, which increases their sales volume, which increases their buying power with suppliers, which lets them buy larger quantities for less money, which lets them offer the lowest prices and dominate their category. Then they turn to the next category. Our clients can drive growth without hiring employees to handle the sales and purchasing volume increase.
Achieving this level of operational efficiency and scale isn’t possible without end-to-end, sales to supply chain integration. This provides the data centralization and data integrity that process automation requires.
Q: There is a lot of talk currently in eCommerce about the growth of Amazon. Do you believe they are largely friend or foe to small businesses?
Amazon can be both a blessing and a curse to small businesses and brands. On one hand, Amazon makes it easy for them to reach hundreds of millions of new customers around the world. Over 300,000 small and mid-sized businesses in the U.S. started selling on Amazon in 2017 alone. Half of all items Amazon customers purchased last year were sold by SMBs.
On the other hand, Amazon – like any retailer – is always looking for popular products to sell. They have been known to use the sales data of its third-party sellers to find them. Then Amazon sources or creates the same or similar products and competes directly against small businesses and brands.
Amazon also makes the rules and strictly enforces them. They can suspend anyone’s seller account without notice. They set pricing and refund policies. They decide which products can and can’t be sold. Not only that, Amazon doesn’t share customer data. They consider all customers to be theirs, even if they buy from third-party sellers. Small businesses and brands are prohibited from contacting Amazon customers for marketing and promotional purposes.
Because of this, many successful small businesses and brands treat Amazon as one channel in their mix, instead of their entire online presence. While they might use Amazon to test the viability of new products, they also diversify their risk by expanding into other marketplaces and platforms.
This approach is smart. You never want to be at the mercy of one sales channel, fulfillment method, supplier or product. To stay relevant, you must be able to change where and what you sell and how you ship, so you can quickly pivot in any direction, at any time.
Q: What emerging technology do you see as the biggest game changer in eCommerce?
Everyone wants a silver bullet, but I don’t think there is one. I was at eBay Open this year and their Chief Strategy Officer was discussing voice interaction and augmented reality.
These things are cool and catchy, but they are search related. In my admittedly biased opinion, it still comes down to improving operational efficiency. The brands and online retailers who adapt to this new reality first and fastest – who weed out the root causes of inefficiency in their business operations – have the best chance of staying ahead of the competition.
As the ecommerce industry surges ahead, it seems new tasks – and ‘solutions’ to help perform them – crop up on a weekly basis. Most brands and online retailers have cobbled together a makeshift set of solutions for each job and developed individual workarounds to fill in the gaps. But research shows that no matter how you organize it, it’s just a series of band-aids that actually slow the process.
Data must still be manually reconciled, consolidated, and transferred between systems. You still need to format reports and perform quality checks. There’s little to no value in any of these tasks, but there is a big cost – days, weeks, months and even years of time taken away from the work that matters.
Successful brands and online retailers have agile and resilient businesses because they have a single source of truth. Product, inventory, pricing and order data flows both ways through each area of their business.
Data integrity is ensured, and human error – which is caused by constantly re-entering data and by using software applications that can’t communicate – is eliminated. Pre- and post-sale processes are automated, allowing the right decisions to be made at the right time. To me, this is the biggest game changer in eCommerce.
Q: From your experience what is the one thing a business can do which will bring them the biggest rewards in the quickest fashion when selling online?
Switch from traditional order management to Distributed Order Management (DOM). This will allow you to collect orders from any channel and use predefined rules to dynamically decide how they should be sourced and shipped. With DOM you can fulfil orders on time and in full for the lowest possible cost.
Use alternate fulfillment methods such as cross-docking or drop shipping to test the viability of large numbers of new products – without having to purchase them in advance. Once you find out what sells and at what price, and what doesn’t sell, you can better decide what to stock in your warehouse or FBA.
Factor all of your costs into each repricing decision. Raise or lower the prices of all your SKUs across all your channels and listings when your costs change. You never want to be guessing or slow to react. Always be selling at your most competitive and profitable price points no matter where you buy or sell or how you ship.
Q: Where can people find out more about you and what you do?
To learn more about Etail’s multi channel ecommerce solution for brands and online retailers, visit our website by clicking the link above or call 855-840-8400.
We want to thank Michael Anderson very much for his insights into eCommerce and how Etail Solutions is helping online merchants to be more successful and sell more online.