Arlen: Wellcome to the eCommerce marketing podcast. Everyone. I am your host, Arlen Robinson. And today we have a very special guest Wayne Richard, who is the author of a Detailed Guide to eCommerce Accounting, Host of the Bean Ninjas podcast, Partner and Chief Operating Officer at Bean Ninjas.Wayne is a management accountant who forged a 15-year career with tech heavyweight Hewlett Packard before starting his own cloud accounting firm in Tucson, Arizona. Fate (and the Internet) brought him to discover Bean Ninjas via a blog post. Two years later and Wayne’s involvement with Bean Ninjas had grown from a blog comment to a contractor and eventually equity partner. When Wayne isn’t managing a global team and equipping entrepreneurs with the financial tools they need to enjoy business success and lifestyle freedom, he’s being an everyday superhero to his wife and five children.
Wayne: Arlen. Thanks so much for having me feels like the hype reel for the Roy Jones jr. Mike Tyson fight. Awesome. Wow. Not a problem.
Arlen: I’m pumped for that fight too. I, I kind of feel for Roy Jones on this one,
Arlen: I saw some of those clips of a Mike with his trainer and man he’s he seems like he’s unleashed.
Yeah, he’s, he’s a good shape. And so I’m super excited. You know, you today about, you know, the topic
Wayne: at hand, we’re going to kind of really
Arlen: talk about a little, a bit about how businesses are going to need to pivot a little bit in this whole age of COVID-19 with regards to. Growth strategies, because there are definitely some things that you may have been able to do prior to this global pandemic that you can’t do now.
And so it’s a lot of unique things going on. Our world was already changing really quickly. And now it’s really kind of a kind of warp drive. You know, we’re, we’re kind of hyper speed right now with all of the changes that are going on. So we’re going to dive into that, but of course, before we get into all of that, if you can tell us a little bit more about your background and, you know, specifically how you got into what you’re doing today.
Wayne: Yeah. So I took the real, the traditional route through my early employment. So I was a corporate climber with HP, as I felt as though that was the best bet to achieve success in my career. I’d grown up in a blue collar town and really had the understanding that the pathway out in to success. Was to get a degree in a subject that I knew I could create and see wealth within.
I got my degree in accounting quickly went to work for a large company, Ross Perot’s electronic data systems outside of DC in Herndon, Virginia, and just continued to increase my level of responsibility and size of team that I was responsible for managing within corporate. Until fate put me in a position to make a judgment call and really have kind of address that crossroads, that many folks face when they have entrepreneurial desires.
And I was in a position where I was sitting on a large amount of severance money and determining if I wanted to continue my route within corporate or try my hand at entrepreneurship. And I saw a lot of my friends that had been in positions either as successful fitness trainers or are barbers, small business owners that really were struggling and uncertain about their numbers and really had to no framework or system around how they would come to understand their numbers or actually use them in a way to help make more insightful decisions on how to grow their business.
They had just happened to have been a great trainer and all of a sudden a movement like CrossFit or something was presented to them where they then had an option, unity to increase their customer base that put them in a position to then be a business owner. But that business owner was never their intent.
They had always just, wow. If I could maintain a full schedule of customers that I’m training, I’ll be in a good place. So I started to look at what accounting tools were out there that I can introduce my friends to, to help them gain certainty. Around their financial positions within their business. And I came across an amazing tool called zero.
If you’re not familiar, there’s essentially QuickBooks online and there’s zero, zero is double entry, general ledger system that allows for you to produce financial reports. So I introduced some friends to zero and I had had an opportunity within my career to also do some moonlighting for a small medical practice.
And. At the time they were paying me a fifth of what my corporate salary was to support them for only four hours a week. Now being an accountant, I did the simple math and said, Hey, if I can make a fifth of my pay on four hours, well, could I make a hundred percent of my pay on under 20? So I started to look at those tasks that this medical practice was asking for me to support.
And then also mirrored it with those things that I knew HP felt were successful in terms of not get basic accounting that many entrepreneurs get introduced to, but the financial tools that help them predict and make decisions about what their growth strategies and business plans would be going into the future.
So I brought. Kind of the best practices from HP into the small business customers that I was supporting.
Arlen: It’s some good stuff, man. You know, being able to leverage. You know, kind of all the knowhow and the experience that you got working with the, you know, huge, giant HP, and then applying that knowledge to help in smaller businesses is awesome because there’s definitely need for that, for sure.
Because as you know, somebody on small businesses struggle with direction and knowing which way to go and with accounting is really a big thing. So they get, that’s a, that’s really some good stuff, man. And. Now as I alluded to earlier, when I introduced you, uh, you know, now that we’re, I guess you can say we’re officially four months into this whole global pandemic known as COVID-19, so there’s a lot of changes going on.
And so what do you think are some specific or unique growth strategies that eCommerce companies have been forced to utilize amongst? Uh, you know, all of this change in this chaos.
Wayne: Yeah, Arlen, I’m glad you asked. So accountant, I’m probably not someone that folks would look to for marketing advice, but we had an opportunity and we had kind of a hypothesis.
When the COVID situation was kicking off. And we really out to over a hundred eCommerce businesses within our network that we’re doing overseas figures in annual revenue to try to learn what those successful businesses were doing in terms of their marketing efforts there. If any of them were looking to pivot to adjust and address the current environment.
So some of the strategies that we saw effective in the customers that have seen. Unbelievable growth in these last few months or first messaging the moment. So people should be unique perspective to their marketing, where they really dialed in to the concerns, to the fears, to the opportunities that people were currently facing.
So we’re now in a position where, you know, many of us are working from homes. What does that look like? Many of us are in positions where if you have families, you’re trying to create activities to do with your families at home. So those, that uniquely message, the moment where those that we saw have some tremendous success throughout these last four months.
Second is tying sales to an essential cause the charity or a bigger mission. So allocating some percentage of sales, just something meaningful. Of course we not only see seen the global pandemic of COVID. There’s also been a lot of social movements that have occurred as a few months. So really find that cause that best matches your brand.
Your customer persona and align with that and see if you can partner. And that collaboration has done extremely well for folks as well. And the last is really around households. Either bundle, offer, pay now pay later checkouts or free gifts to increase conversion rates. So really creating offers for those price sensitive shoppers.
That discount or a preceived discount, but actually increase your average order value. Okay, good.
Arlen: Yeah. That’s some good stuff, man. And I liked what you initially said that uniquely messaging, the moment that’s really catchy. And it, it makes sense because I’ve seen this, of course, over these past four months, a lot of the big major brands of course are taking advantage of that.
Kind of tailoring their messaging, their marketing around this time and being sensitive to the hardships that people have, because I guess the biggest thing is you can’t be blind to, and you can’t turn a blind eye to it rather, and you can’t really ignore this current moment because, um, and just assume that.
Everything is AOK with everyone is success. Definitely not the case. There’s some people that are, are riding high from this action that it really profited a lot, but yet there’s others that are the low end that have almost lost everything. So yeah, a brand has to be sensitive to that fact and their messaging.
And I think if they are, that shows compassion and that can definitely resonate with the. The end customer or the prospective customer that, you know, to get the customer to realize that, you know, the brand does have a heart and is concerned about the plight of the humanity in everyone. And so, um, yeah, I’ve definitely seen that social movements have also been really big even prior to this, as you’ve already seen yourself.
And this is also a great way to, if you haven’t even thought about that. There’s plenty of organizations, associations that are, there would be glad to get some type of assistance donation, or even if it’s just a small percentage of every third sale or something like that, that you can put towards a particular cause.
So, you know, really?
Wayne: Yeah. Was this the opportunity? I mean, and many times your brand’s audience will be much larger than the available audience that these clauses are able to capture on their own to utilize. An owned asset, which is your audience to then message and just get the word out often times it’s enough.
Arlen: And then, you know, bulling bundling offers or offering some type of incentive or discount. I’ve seen that as well with a lot of brands being sensitive to people’s economic situation and, you know, doing discounts or even doing it, where if you’re on the service model, maybe you’re discounting monthly fees or extending.
Credit or something like that across to your customers, just being mindful of the economic situation. So yeah, all those things are definitely things that you can do to help resonate with people and show that your business or your brand, you know, has a conscious family, you know, as a conscious and a, you know, as not just a business as usual.
So that’s a good thing now, you know,
Arlen: strategies in general, you know, there’s always been a ton of different things that you can do to grow your brand. Whether you have an online business or a brick and mortar business, there’s always a kind of some core growth strategies, but what are growth strategies of the past
Wayne: that due to our
Arlen: current situation are really totally out of the question in this current environment that you think a branch.
Don’t even go that route and think about doing other things.
Wayne: Yeah. Say one that’s become challenging for me to understand now is if you’re going goals are to truly build a brand and not just build a successful product launch. One strategy that we’re seeing many of our folks move away from is operating under a single channel and growing, particularly in that one channel.
And for most folks, it’s on Amazon. And putting all their eggs in the Amazon basket. We saw recently Amazon determined some products as essential. Some non-essential open their doors to receive orders from certain products and not others. So if you were in a position in a market where your product was deemed, non-essential, you very quickly started to explore.
An omnichannel or a multichannel offering. We had a great quote and it really opens in our eyes. Kiri masters has been on the beam than just podcasts, but also has a podcast of her own Bob slick marketing as well. But she’s spotlighted the rise of Walmart as a marketplace and would their dedication in growing their platform through there, we launched and fulfillment services, their ad platform modernization, and then also their integration with Shopify.
Has really become a viable option that folks should begin paying attention to. Okay,
Arlen: great. Yeah. So you actually, if you can touch on that a little bit, cause that’s something that I’m not that familiar with. Maybe some of our listeners may not be as well. You mentioned the Shopify and the integration with Walmart.
How exactly does that work
Wayne: is? I believe shadow finance, of course, as your front end in allows for you to have a presence, right? Amazon is your marketplace and your presence exists within a product. Page on Amazon Shopify allows for you to house your brain. So there’s opportunities. My understanding in the play is that there’s integration that allows for Walmart fulfillment services to help support the distribution of your product upon order from.
Arlen: Gotcha. Okay, great.
Wayne: An opportunity that I’ve seen in, in some of my own research where. Walmart also acts as that marketplace. So there’s an opportunity to also have your products there featured within the search. When folks are looking on Walmart for product.
Arlen: Right. I’m familiar with that. And so it’s definitely a great vibe and of course, in addition to Amazon, if you’re already doing direct to consumer yourself with your own site, your own brand, you know, whether you have a shopping cart through Shopify, but making it available through Walmart or, or even Amazon is definitely opens up a whole nother channel for you.
And that’s definitely something that I’ve seen over these past few months where brands are pivoting. If they don’t have a. Presence in those channels. They’re definitely now scrambling to try to get one. So it’s definitely the time to do it for sure. Now, what do you think are some strategies that, you know, we mentioned some things that you really kind of shouldn’t do now.
You shouldn’t do the kind of singular approach. If you were working with one channel now you can’t really, these days you really got to diversify, you mentioned the Omni channel approach. You have the first five, the channels that you’re putting your products and services out on. So that’s for sure. So you don’t want to do that.
You want to do the Omni channel approach,
Wayne: but. What are some
Arlen: strategies that maybe were Brian was doing before that you would recommend right now that you really just, they should double
Wayne: down on? Yeah. I may frame it in a slightly different way if you don’t mind Arlen. But what we had asked folks is what big pivots or what shifts are they making in the future based on the impact and the results that they’ve seen across the last few months?
So we really stuck three major pivots. And the first as we kind of touched on is channels. So brand switching from prioritizing, maybe a wholesale channel or offline sales channels to selling direct to consumer, maybe through Amazon or building out a Shopify presence. Within their own own markets. And then also leveraging their own audiences.
We’re seeing people creating private Facebook groups where they’re able to let their customers interact with each other test and survey to see what new products might, it’d be most compelling to launch particular order. Or if there’s just a general interest in different variants or colors across some of their product offerings.
So they’re able to get brand representation within an owned community. So then it helps them when trying to create increased LTV within their customer base. Um, they’re able to do that without utilizing, you know, a paid social strategy it’s within, uh, a marketplace and an owned audience that they already have.
The second big shift is within markets. So multiple well sellers have chosen to sell different products in different markets. So they’re looking to ship away from baby particular industries or niches that have been heavily impacted by COVID. So if you were a seller that was targeting the tourism, get maybe you’re going to look to market your products to a different audience.
And maybe you’re going to look to open up potentially a new marketplace. If you are geographically limited to let’s say, selling on Amazon in the U S you may have tried, and you may be looking at the opportunity to shift and open a marketplace in the EU. Where there’s less of an impact and things are starting to open up a little bit more maybe.
And then also just really looking to understand within the products and markets they sell, what their particular margins are, because if you’re selling in a marketplace like Amazon, your margins are going to look slightly different than those where you’re selling within your own owned audiences or within your own platforms.
And the last big shift. I can’t help, but not say this as an accountant is around their strategies on spending. So many sellers have really. Taking the responsibility, the accountability, and the ownership to understand their cash flow. They’ve been to become intimately aware yeah. Of what they’re, what, where they’re spending within their business.
So many have invested in strategies by hiring coaches, consultants, or contractors to support them in their understanding within these areas. So really it comes down to you have a responsibility to your customers, to your employees. Let’s be real to yourself, to stay in business during these challenging times.
And often for me, the hardest conversation is to tell someone that, Hey, the best time to have gotten on top of your finances was eight months ago. But the second best time is right now. Let’s take a look and see what we can identify in where you currently stand. And then help make some Clint, some strategies in place and help implement some tools to create that certainty and peace of mind around where you are today.
Where are you looking to fill, build a
Arlen: box? Yeah, definitely great advice. And I think the, kind of the key takeaway with that is just being able to quickly pivot because, you know, as a business owner or for newer, you kind of always have to have that ability to be able to pivot. But I think a lot of times you kind of take things for granted and you know, it’s just human nature.
You get comfortable, things are going. And kind of as you’ve expected for a period of time. And then,
Wayne: you know, of
Arlen: course court curve balls are going to come it’s to be expected with the business, but we’ve never been in the case that you wasted where the kind of the whole world saw the same curve ball coming at the same time.
Wayne: isn’t it, we’re in a, we’re in a place than supporting an industry within e-commerce while the world has a sense of a pending recession and there’s health concerns. The sellers many that we’ve supported have seen weeks of sales in line with black Friday, cyber Monday unprecedented. So some of the challenges that are being faced are not, you know, how do I keep the lights on and stay in business?
It’s do I continue to use the sales trends of the last few months as an indicator when you’re trying to make decisions around the stock and the orders I’m going to place. Four sales in 60 days. And how do I, I manage the cash flow to support that spend and do I need it? And by that increased inventory, or do I just accept it as a great, you know, as like a lottery ticket, you know, when you, when you go in and scratch a lottery ticket, you don’t intend to win all of them at time, but when you do, sometimes you just call it good.
Right. You treat your wife to an amazing meal. You have a great date night, you take your family out. So some of them now it’s the opportunities there in certain markets to continue to sell and, and grow at unbelievable rates. But also for some, they may want to take a significant look and just see if they’re okay with what’s occurred and willing to take on the risk because the challenge of operating.
A six figure business is very different than the challenge of running a seven figure business. And then it is to running an eight figure business. And for some entrepreneurs, it’s a gut check to identify what they truly want. And what does running a $10 million business actually mean to you and your lifestyle?
And is that what you actually are looking to achieve? Or is it okay to be running a high six figure? Business that allows me to have freedom my time and flexibility to travel and the presence to be at home. And it’s very different for each person. So I think it really comes down to understanding what that looks like and what your desires.
Arlen: Yeah, very true. It really just comes down to doing some soul searching and figuring out what you want to do because the possibilities are still out there. Regardless what’s going on. You can kind of go a number of different ways for sure. Now I’m, you know, as we prepare to wrap things up, I’m always a huge advocate of taking a look at what some of the larger brands eCommerce brands are doing just to kind of glean some things from, so what are some companies.
That have done a great job in pivoting and this current situation. What are some of those companies and what specifically have they done to really increase their growth during these days?
Wayne: Sure. So I’m a huge fitness advocate and enthusiast, and I was so scared also as an accountant. I love seeing the quarterly analyst calls and financial releases.
So I was really surprised and impressed by Nike. So Nike had a goal that by 2020, 23, 30% of sales would come from direct to consumer. So DTC sales, which is roughly $2 billion, a quarter sales through DTC channels. And this is outside of Amazon. Cause remember they left the Amazon platform last year. They achieved that goal this last quarter, years ahead of schedule.
Totally. Like we want to talk about a pivot. A tremendous amount of real estate, huge stores in person, traffic in their stores is unbelievable. They’re one huge success story. And I’ll say to my wallet has taken a hit from a number of Nike orders direct from their app. So my home, the second same space, Lulu lemon.
So Lulu lemon, 50% of revenue in the last quarter was from DTC. Amazing story. There. One that had been recently turned on to Cuba, Twitter following amazing resource to follow is Patrick could do the supply co I mentioned the opportunity to really bundle, to begin to create. A perception of discounting while increasing your average order value.
And there was an amazing webinar that was done. So I’m also the CFO in residence for the admission community within common thread collective portfolio. And it was just a great case study done by supply that really looked at how they incorporated an offer that presented free razors for the year. With orders.
I think it was through the later part of March. So I felt that was a great kind of smaller brand story.
Arlen: Great. Well, yeah, I appreciate you sharing those examples. I love examples of companies and what they’ve done. I wasn’t aware of the Nike example and that’s some good stuff. Yes. So there are pivot, there, there 30% of sales being done DTC
Arlen: that is that it really is
Wayne: on the Hill.
I want to mention a third because it speaks to a metric that I think. Many people fail to understand within their eCommerce operations. There’s an amazing analysis of Jim shark’s financial. And what was amazing about it is they looked at one particular metric, the cash conversion cycle, which essentially is looking at the terms that they have with their suppliers.
And their ability to accept preorders on their new releases. So it actually turned out that Jim shark’s growth is actually funded by the beneficial terms that they have with their suppliers on top of their unique selling position, where they’re able to pre-sale before they’ve actually purchased the goods.
So they’re collecting money, holding money. Receiving money and then paying for the goods much later. So their cash on hand really allows for them to continue to grow at the rate that they’ve been successfully growing.
Arlen: Very interesting. Yeah. I mean, that’s a different model and, and been able to do that these days is a.
It’s pretty incredible. We have thanks for sharing that, that extra nugget as well. And, um, yeah, this has been awesome having you on when I definitely learned a lot. And, you know, I guess to me, key takeaway, like I said, is you have to be fluid, you have to pivot. And, um, there’s certain things that you may have not thought that you would have to address as far as growth strategies, but.
Due to our current environment, you know, you probably got to just dive right into it. So that’s really kind of the main takeaway. So yeah, it’s been awesome. And I learned a lot, one of the things I always like to do to close things out, just to switch gears a little bit, so our audience can get to know you a little bit better is a, you know, what is one closing fun fact that you can let our audience know about yourself?
Wayne: think we were chatting before according, and I’m a father of five. I hope my wife and I actually have, have triplet six year olds. But a fun fact is we actually took off for over a six week period and traveled the United States in an RV and visited. We left Arizona, made it up into Maine, drove along the East coast and then spent some time in Tennessee.
Before returning home. So love getting outdoors, being active, and we’re actually taking off after this recording to go off free camping for a number of days as well with the family.
Arlen: Okay, great. That sounds awesome. Yeah. I’ve talked to a few people that have done the whole kind of RV thing and I’ve always started with, is that something that I can do?
My whole thing is just, I would like to do it. I just don’t know. I wouldn’t necessarily want to drive one of those big armies that’s modeling.
Wayne: I would do it.
Arlen: I would do it if I had a designated driver.
Wayne: I’m our designated driver in the entire journey around the U S my wife did not drive. Oh, wow.
Arlen: Oh, wow.
Wayne: The ability to get into your own head, the thoughts.
And I’m always one where I’m strategizing and thinking of different things. But I feel as though Pacman on the highway, Cause there’s those little lines. It’s just like, I feel like I’m just babbling them up.
So it’s therapeutic. It’s sit back.
Arlen: You do got to get in a zone and especially if you drive that many miles for sure.
Wayne: Or have a podcast Rolodex of some amazing shows to listen to.
Arlen: Right. Definitely. Definitely. Well, great. Well, thank you, Wayne, for sharing that. I appreciate that. And, uh, you know, like I said, it’s been a pleasure having you on the podcast.
And lastly, uh, you know, if any of our listeners would like to get a hold of you and pick your brain anymore about. Growth strategies in his current environment, what is the best way for them to get?
Wayne: Yeah. Arlen, thanks so much for having me out. I want to first mention we have an eCommerce recession impact report that’s available for download on our website. dot com. We’re across all of the socials. A particularly heavy on LinkedIn. Again, it’s been ninjas. I’m starting to become a more active audience member on Twitter. Yeah. And putting out some content there as well. So I’m an everyday superhero on Twitter. And again, if you’re an eCommerce entrepreneur struggling with cash confidence, we have a free zero e-commerce tool kit packed with schedules.
Tools to help you understand inventory forecast and planning, cashflow forecasting, and also your unit contribution margins. So check that out. It’s available for free to download on our website and hit me up. If there are any questions or resources that you need.
Arlen: Okay. Great. Well, thank you Wayne, for offering that.
Those are some awesome resources and yeah, I definitely hope our listeners will jump on there and take advantage of those resources. And thank you again for joining us today on the eCommerce marketing podcast.
Wayne: Absolutely take care.
Arlen: Thank you for listening to the eCommerce
Partner and Chief Operating Officer at Bean Ninjas