Breaking Sales Plateaus: Back-Office Success Secrets | #268 Josh Fischer

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Claus Lauter: [00:00:00] This is episode 268 of the Ecommerce Coffee Break Podcast. Today I'm joined by Josh Fischer, Director of Product Management at Acumatica.com, and we talk about how to grow past the sales plateau by optimizing customer experience with back office business management software. So let's dive right into it.

But before we get started, a big thank you to our sponsors for supporting today's episode. Have you heard about PartnerHero? They're experts in support on the e commerce industry, known for their outstanding team building skills. Their main pillars, quality, people, and culture makes them a great fit for your company.

Learn more on partnerhero. com or click the link in the show notes. Are you feeling overwhelmed by marketing stress? Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity, and reclaim your time. The game changer, get your own marketing wizard at half the cost.

Visit smart ecommerce marketing. com and discover the magic. Check out the link in the show notes now. 

This is the e commerce coffee break. [00:01:00] A top rated Shopify growth podcast dedicated to Shopify merchants and business owners looking to grow their online stores, learn how to survive in the fast changing e commerce world with your host.

And 

today we want to talk about ways on how you can come by a sales plateau in your business and how optimizing the customer experience with back office management software will help with that. With me on the show today, Josh Fischer, he's the director of product management, retail edition of Acumatica.

com, e collects with. Market retail organizations to empower them to improve efficiencies and scale their business. Josh is a creative and entrepreneurial leader with more than 14 years of experience working in technology, marketing, design, and professional service industries. So that's why I came to the show.

Hi, Josh. How are you today? I'm 

Josh Fischer: great. Thanks for having 

Claus Lauter: me, [00:02:00] Klaus. Josh, we're diving into the world of ERP, of enterprise resource planning. Now that's a mouthful and not every merchant who has just started or is under a certain bracket has dealt with that topic. But there's a lot of potential there, specifically if you're growing your business, which we will hope everyone will do.

And we want to talk about the advantages, the benefits, and the implementation of an ERP system. Maybe to start with, give me an overview what ERP actually does. 

Josh Fischer: So ERP stands for Enterprise Resource Planning, and it's a concept that's been around for decades. What it is is, you know, businesses decades ago, they started having factories and inside the factories, there were so many different departments that led to things like cost, product cost, and an ERP helps you manage all of those different aspects so you can better understand the financials of your business.

So it includes things like inventory management, purchase orders, sales orders, customer [00:03:00] relationship management, all of your invoicing and fulfillment. And then it expands out even further if needed, but you're right in the e commerce world. It is very common for me to meet e commerce businesses who are not familiar with ERP.

They think of it as an application that big brands like Coca Cola and Nike use, which is absolutely true. But with today's digital technology and you know, the advancements we've had in technology. Companies like Acumatica have really been able to bring it down market to smaller businesses and mid market businesses.

Claus Lauter: And you're right. A lot of merchants think, no, they have Shopify and there's so many tools in there and that should do for the rest of their business life. But as you grow, there's more systems coming on board. Things are becoming more complex. You might start selling on Amazon. You have your tech software and so on and so forth.

So an ERP brings all of that together. Tell me a little bit on. What's the usual process or what you see with e commerce merchants growing into a certain revenue bracket or to a [00:04:00] certain revenue? When does the process start with them to think about a bigger solution? 

Josh Fischer: Sure. So this will be a little bit generalized, but this is the pattern that I've seen over and over again.

Typically, when businesses get started, I like to talk a lot about digital native e commerce brands. These are usually really smart individuals that pick up on a product or a product line that they can sell online, and they solely sell these products online. And a lot of times they don't have a background in supply chain management or even in retail in general.

They just see an opportunity. And the way they get started is they'll use a system like Shopify, they'll integrate it with a platform like QuickBooks, and then they'll use spreadsheets in order to manage things like inventory. And that'll serve them well until they cross the million dollar Milestone.

And then when they get over the million dollar milestone, inventory challenges start to become more complex and they might adopt a inventory management system like skew vault or skew Bona, [00:05:00] which QuickBooks skew vault skew Bona. They're all great systems, but they serve a purpose for a specific market.

And over time, as they cross the 5 million, a milestone, they continue to cobble on other apps. And when they get to that 10 million area. What they find is they have Shopify, and it's surrounded by all these different apps that are trying to communicate with each other through Shopify, and maybe some of them communicate with each other directly, but the business data is not completely unified.

Sometimes they have to export data out to a spreadsheet, run some formulas, and then import that information into another application. There's a lot of manual processes. Sometimes you're manually keying orders in to Shopify that you might have received over the phone or whatever it may be. And eventually, one day, somebody realizes there's gotta be an easier way to do this.

There has to be some kind of system out there that, you know, can solve all these challenges. And that's when they [00:06:00] start searching. What I've seen is that 10 million mark, that 10 million in GMV, that's usually the point in which businesses start looking for another solution. And the businesses that, you know, between 10 to 25 million, that's when they make that transition from QuickBooks and a few cobbled together apps into an ERP.

If you haven't made the transition by the time you've crossed the 25 million mark, you are in a small group of e commerce entrepreneurs that have figured out how to make it work. And that is all good and fine. But as you continue to grow, things are going to get tougher. A lot of manual processes, a lot of slow deliveries and challenges maybe in your future.

So don't 

Claus Lauter: wait too long before you get started with an ERP. Now, obviously you spoke about time saving aspect of having an ERP and bringing all the things. What are other benefits or advantages of having an ERP in place for your business? 

Josh Fischer: Really, [00:07:00] automation, that's the biggest benefit. So when you're a merchant, as orders are coming into your system, if you have a lot of manual processes where you're reviewing.

Your orders, you're looking at inventory, you're making sure that you actually have the items in stock to be able to fulfill. You're going through the process of preparing your shipments. If there's a lot of manual steps that you're repeating on a day to day basis, you can likely replace those manual steps with a machine or some kind of automation.

And that ends up saving a lot of time. This is one of my favorite stories to tell. We have a relatively large D to C retailer that when we met them, they were using QuickBooks. They had reached a pretty high level of success. They had a really good Black Friday weekend. I think they had, you know, close to 100, 000 sales over the weekend.

And on Monday morning, they had a meeting to talk about how they were going to get all these things out. And everybody was positive and optimistic and they would get the orders out as quick as possible. Customers would be happy. But there was a new [00:08:00] person on the team that had a supply chain background.

And she kind of put her hand up and said, we're not going to get these orders out until February. It'll be months until we fulfill all of these orders. And she was proven to be correct. And through that process, that's when she introduced the team to ERP, introduced them to us, the next year comes around.

And Black Friday weekend, luckily they had implemented Acumatica. Their Black Friday weekend was 4x what they had seen the year before. And all of the orders were shipped in two weeks. So it just shows you how the automation inside the system can speed things up so that your team members are focused on really the things humans should be thinking about instead of the things that machines can think about for you.

I mean, that's a bit of a 

Claus Lauter: horror. If you need about three months to deliver to your customers. I'm sure the customers were not happy at the end of the day. Now, let's touch on a little bit of the different areas that an ERP software basically [00:09:00] can connect to. You talked about QuickBooks. We're talking about Shopify.

What other areas in your business can be implemented? Okay, 

Josh Fischer: so if you were going to implement an ERP with Shopify, for instance. The ERP would be your accounting system. So you could use it for all your financial management. You could use it for your reporting for taxes and everything. You would also use it for inventory management.

So inside the system, there would be a record for all the different SKUs that you're selling. If you have products with variants, there's tools that allow you to design the products of variants and then create all the SKUs for you, which comes in really handy. The process of purchasing, like putting together purchase orders for your vendors, telling them exactly what you need.

You can maintain a record for that purchase order inside your system. So then as you're receiving the items, you can check those items against your purchase orders. Obviously when orders come in. You have a order management system and a fulfillment system, so you can go through the whole shipping [00:10:00] process.

And then of course, invoicing and recording all the financials associated with these systems. One of the things that we've done recently, we have native integrations with Shopify and Amazon and BigCommerce as well. And these native integrations are important because we work with Shopify's team and BigCommerce's team and Amazon's team to understand exactly what their merchants are struggling with.

And we build solutions for them and vice versa. You know, like these teams working with the product teams inside these companies has been fantastic because we can build things exactly based on what merchants are telling us. But one of the things that we heard from Amazon merchants is that understanding per unit profitability is really difficult because Amazon charges so many fees.

If you have a high volume of sales in Amazon, you might have a product. That you're selling through the roof and you think everything's great. But when you actually dig into the financials, you may find that you're making less money than you thought. And the per unit profitability is not as strong as you once [00:11:00] thought.

So now we're pulling those Amazon payments in along with all the fees. And then the fees are associated with entry types in your accounting system. So you can fully understand how much am I making, how much am I paying Amazon and which of these products is bringing me the most profit. So then you know what to put your advertising dollars behind.

Claus Lauter: And now a quick break to thank the sponsors of today's episode. As a prominent player in the e commerce support arena, Partner Hero specializes in delivering personalized customer experience solutions. With a clear focus on helping you not just meet but exceed your goals and requirements, they have become experts in e commerce support.

Their commitment to tailoring solutions to your unique needs ensures that your support experience is nothing short of exceptional. Partner Hero is more than a CX company. They are your partner in success. Visit their website and learn more on partnerhero. com Are you feeling overwhelmed by marketing stress?

Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity and reclaim your time. The game changer? [00:12:00] Get your own marketing wizard at half the cost. Visit smart ecommerce marketing. com and discover the magic. Check out the link in the show notes now.

That's huge. I mean, there's a lot of, and I have heard that before a lot of merchants that lose control over their profit margin because of all the fees that are coming from every side. So if you have a system that can create transparency or clarity on what really is left over at the end of a sale, then you probably, as I said, you will be.

able to find the most profitable product and concentrate on that one to make it work. Now, I want to go one step back. You mentioned that a lot of merchants at some point they're dealing with spreadsheets, some other apps, software solutions. So they might come to you with quite a bit of a mess. So what's the process to get started with you guys?

How do you get all of that streamlined? 

Josh Fischer: So Acumatica, we're solely a product company. So the only thing that Employees at Acumatica focus on is building and improving the product. And we rely on a [00:13:00] network of partners who are the ones that actually sell and implement Acumatica. So if someone were to come to us, we would start off by having a conversation with them, learning a little bit about their business, learning about the challenges that they have, we might go through a series of demos, like if they have very specific use cases that they're trying to solve.

We would set up a demo and say, here's how we would solve that use case inside of Acumatica. And once both parties determine it's a good fit and the merchant is ready to move forward, we would help them find a partner that's in our ecosystem that has experience in their industry, maybe works in their region, has experience working with the platforms that they're used to.

And then we would make that introduction and then the partner would then take over and they would go through a whole consultation process. You know, which systems are you using? How are you getting this data? How can we migrate the data into Acumatica? They would lay out a plan and carry the merchant through that process.

I mean, 

Claus Lauter: a huge benefit if you have [00:14:00] somebody who has done that before and might be knowledgeable in your industry, in your vertical, and then basically helps you with getting the whole process streamlines. And the key word there is you don't know what you don't know. I mean, specifically if you're going into a complete new system.

Tell me a little bit about the connectors. Once you connect to Shopify, obviously there's reporting, there's dashboards. How does that all of that work? 

Josh Fischer: Okay, so you establish the connection between Acumatic and Shopify, and then there's a handful of default settings. So when you're inside Shopify, let's say you go into Shopify and you create a product.

And you create the product, you give it a title, you give it a description, you upload some pictures, give it a SKU, a price. There's, you know, let's say 12 to 15 different fields that you have to fill out. Categories, tags, and so on. Inside of an ERP, it's going to ask you for a lot more information. It wants to know who the vendors are, what's the lead time from these vendors, what's the cost on these items, you know, there's several tabs of information.

So you would fill out all of [00:15:00] that info and you would establish a sync between the two systems. You would set up your default settings for everything that's in the ERP. So for instance, default settings, what I mean is if a customer creates an account on Shopify, And then places an order by default. What customer class do you want them to be associated with?

And how are you going to handle their location information? Set up these defaults. Same thing with orders, payments, and ship vias. This all takes an afternoon. And you have this two systems configured. Once they're configured and they're syncing together, that's when you start syncing data. So you can take all your products inside of Acumatic and push them out to Shopify.

Of course, if you're starting on Shopify, you would pull those products into Acumatica and represent them. But you would sync those products. You can send inventory levels out. If you have customers in the ERP or in Shopify, you can sync those. And what you're doing is you're just getting the data to line up between the two systems.

And once they're in sync [00:16:00] with each other, the connector keeps them in sync. So, whichever system you determine as the source of truth, You know, for instance, if you have customer records in two different systems, you can say Shopify is better at keeping track of the customer information because that's where the customer goes and that's where they change their phone number and address.

So I want that to be the source of truth and the ERP always has to take its advice, right? Or vice versa, maybe your product's source of truth is inside the ERP. And Shopify has to keep up with whatever's inside the ERP. You can unmap fields, of course, if you want your description to just be in Shopify, you can do that.

Once everything is in sync, obviously you go through rounds of testing, placing orders and everything, make sure it works. Once you've determined that everything's working, orders are coming in, you're able to fulfill them, shipping information's going back to Shopify, and you've proven that things are configured the way that you need, That's when you turn the automation on.

So you can turn [00:17:00] on real time syncs, you can set up schedules, and then the data starts flowing back and forth on its own. And that process, the testing and getting it to a point where everything is smooth and the whole team is familiar with the process, that might take a month or so. But when it's up and running, I would say after, usually after the second month, that's when the team starts functioning like a well oiled machine.

And we regularly see e commerce brands scale. It's not typical of every brand, but it is common for me to get an email saying we went live, everything was great. We've seen 60 percent growth in the last three months, or we've seen the biggest one was 119 percent growth in the last three months. That was a good reason for a 

Claus Lauter: celebration.

I can imagine. Yeah. I mean, it frees up so much time and probably the risk of failure or for errors in the system is much, much lower. So then whatever is on board, whoever is on board can focus. that time on other tasks and that helps obviously with growth. [00:18:00] Is it only for Shopify plus or which Shopify plan do I need to be 

Josh Fischer: on?

So you can be on any Shopify plan and it integrates with Shopify's POS as well. And Shopify has all these new B2B features. And we actually integrate with those B2B features too. So if what we're seeing is a lot of direct to consumer brands are recognizing that there's a whole channel of opportunity with B2B businesses.

So they're taking their D to C brand and expanding it out to B to B. Shopify has made that incredibly easy. And now all of those business companies that are customers, they'll sync with Acumatica just like a business with the hierarchy. Basically the company is the customer and they might be multiple contacts that are buying within that company.

And then you can set up customer specific pricing as well. So, inside of Acumatica, you can, you can say, all the customers of this class get a certain percentage off. You could even drill into individual [00:19:00] customers and say this customer gets a percentage off and that customer gets a different one. You can even take that deeper, individual buyers within companies.

But regardless, all of that syncs back and forth between Acumatica and Shopify. So, all the automation that I'm talking about. That applies to those direct to consumer sales, it expands out to B2B sales also. Okay, a 

Claus Lauter: lot of listeners will be happy to hear that B2B was always a bit of a wobbly road with Shopify, but it seems to be getting better and better.

Who's your perfect customer? What kind of industries, verticals, niches are using your system the most? 

Josh Fischer: I'm in the process right now of producing a report to drill into the exact industries that we're seeing and the kinds of customers that we're seeing. And what I'm seeing the most of, there's nearly a 50 50 split between direct to consumer, Brands and B2B brands using Acumatica and these external commerce platforms.

But the D2C brands are really of interest [00:20:00] to me because D2C, I've been reading, I don't know if you've seen this too, but I've definitely read some articles that talk about how D2C is slowing down and D2C isn't as exciting as I don't agree with that at all. Like, in my mind, the future of retail and manufacturing is D to C.

I think we're going to end up in this future where we're not going to have manufacturers and we're not going to have retailers. What we're going to have are brands and those brands are using all these different methodologies to get their products out to the world. And those businesses with that mindset are really attracted to our system.

Mainly because when you're working with a manufacturer, there's a lot of complexity, they need flexibility. Our system is a hundred percent open. So like every field in the ERP has an end point in the API. And you tell an engineer that and they realize they can do anything at that point. So those kinds of things are really attractive.

As far as specific industries, we have brands in the cosmetics and lifestyle, [00:21:00] health and beauty. We have plenty of fashion and apparel oriented brands. Home furnishing and home decor is really thorough. And then the one interesting thing that I found in going through the data is there's so many golf oriented brands that are using the system.

Some pretty well known brands that make golf clubs to order. They like using the system because all these made to order buyer orders. You know, we're kind of complicated because maybe there's 20 different options for the person to choose when they're making the clubs. That information has to come into the ERP and create a work order so that somebody in the warehouse can assemble that.

And we have those pieces in place that speed that process up for them. 

Claus Lauter: That's a very good example. And that shows you how complex D2C can be if you have a complete customer's product there. Josh, before we come to the end of the coffee break today, is there anything that you want to share with the listeners that we haven't covered 

Josh Fischer: yet?

I have this idea that I've been marinating on for a couple months now, and I've been thinking about the position that merchants are in when they're [00:22:00] building up their business. And the way I see it, if you're thinking about how to scale your business, all the different ideas that you have, they boil down to three options.

There's basically three categories. Of how you can continue to grow. The first is to just focus on finding net new customers, right? There's this group of customers that have bought from you in the past. You can go out and find net new customers. Sometimes that's because you find an audience that you weren't paying attention to in the past, that might be attracted to your product and you start advertising campaigns and so on.

The second. Is to increase the recurring purchases from your existing customers. So you basically, you have a network of buyers, try to collect as much information about them as possible, figure out what kinds of products they want. And then you're adding to your product listing. So attract them back to buy more from you.

And based on the experience that I've had, those are the two areas. That the majority of e commerce brands focus on, especially early in the days, [00:23:00] they're always focused on the customer facing challenges and how to make the customer buying experience better. But the third way to make more money and continue to scale your business is to try to fine tune your back office so you can squeeze an extra percent out of your fulfillment process.

Or squeeze a few extra percent out of your inventory management process. So if you're to the point where you're thinking about what is the perfect amount of inventory for me to have on my shelves at any given time, rather than just saying, Oh, we're getting low on this, let's just order a thousand more.

It's like, well, actually dig in and look at how many items you need for this period of time. Historically, how many did you sell this time last year? And if you can use tools to help you make those decisions, you can get to those. Answers a lot faster. But, um, you just have to keep in mind that every product that's on the shelf is costing you something and that's money you could be saving.

Claus Lauter: That's pretty right. I had an interview last night and we're [00:24:00] talking exactly about that system or that problem that they also see that a lot of sellers, merchants out there are focused on the sale, just sale, sale, sale, but not on being profitable and being profitable is optimizing. What you said is the fine tuning and that what comes from give me an idea about the pricing.

How do you structure your pricing? 

Josh Fischer: So if you research the ERP industry, typically ERPs are based on the number of users. In some cases, we will price by user if that's appropriate for your business, but that's not our first step. What we do is we focus on a per transaction subscription price. So what we want is for merchants to come to us and grow with us.

So our goal is to help make it as affordable as possible to get you in, get you set up so that you're automated and your business continues to scale. And as your transactions increase, then the subscription price increases on an annual basis. But as far as the [00:25:00] actual price of the software, actually something I'm real proud of, we have this whole bill of rights for our customers where we talk about essentially how important the customers are to us.

One of the things that we, Tell customers is we don't increase prices more than 3 percent during renewal. So like if you're paying a certain amount for a module, maybe you add on an extra module with the system. You'll never see a 4 percent increase or a five or 10 percent increase, which is, is not unheard of in the ERP industry.

And that's something we feel pretty strongly shouldn't be the case. 

Claus Lauter: Yeah, as a ERP system, you're one of the main pillars of a functioning business. So I think having a reliable partner on the side and also when it comes to the pricing is very important there. Where can people find out more 

Josh Fischer: about you guys?

If you go to acumatica. com, you can learn all about the organization and our product. We also have a, um, a community, community. acumatica. com. And that's where [00:26:00] our customers, our partners, everybody in the ecosystem has conversations about the system. Those are probably the best two places to get started.

And then if you want to engage with us, you just go to acumatica. com. There's a button in the upper right corner for request a demo. And you click the button to fill out the form. And what we'll do is we'll reach out to you and have a conversation about your business. Try to understand what your challenges are and what you're trying to accomplish.

And then we'll set up a demo and try to personalize that demo as much as possible. Okay, 

Claus Lauter: sounds great. I will put the links in the show notes as always and you just one click away. Ross, thanks so much for your time today. That was really a good intro into ERP. I personally have never worked with an ERP, but I learned a lot today.

And I hope that merchants may make the decision to switch on ERP early enough in the growth process so that they don't. Get screwed over or that they don't screwed once they're, once it is so late in the process, put it that way. Thanks so much for your time today. Yeah, thank you. Hey, Klaus here. Thanks for joining me on another [00:27:00] episode of the e commerce coffee break podcast.

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Say goodbye to pressure and meet your new secret weapon, a remote marketing assistant. Easily scale up your business, boost productivity and reclaim your time. The game changer. Get your own marketing visit at half the cost. Visit Smart minus e-commerce minus marketing.com and discover the magic. Check out the link in the show notes.

Now. Have you heard about Partner Hero? They're experts in support on the e-commerce industry, known for their outstanding team building skills, their main pillars, quality people, and culture makes them a great fit [00:28:00] for your company. Learn more on partner hero.com or click the link in the show notes.