Product Startup Podcast Episode 130: Choose an Ecommerce Platform

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from a 30-year e-commerce veteran on how to choose an e-commerce platform for your hardware product business.

00:00:10 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors,

00:00:20 Narrator: product developers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful.

00:00:27 Narrator: From initial idea to getting your product on store shelves, we're taking you step. by step to build a functional product and scale your product business.

00:00:37 Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small

00:00:43 Kevin Mako: product businesses.

00:00:44 Kevin Mako: Now, on to the show.

00:00:47 Kevin Mako: Welcome back, everyone. Today, I'm very excited to introduce Tim Bucciarelli to the show. Tim is a director at IronPlane, an e-commerce agency that works with many

00:00:55 Kevin Mako: large product brands. Tim has been a leader in the e-commerce space for almost 30 years. Today, Tim is

00:01:01 Kevin Mako: going to share some valuable knowledge on how inventors, the small manufacturers can understand what e-commerce is, how to choose a great e-commerce platform for your current and

00:01:08 Kevin Mako: future product needs, and how to do a good job of building out your platform, especially around business-to-business sales. Now on the episode.

00:01:17 Kevin Mako: Hey, Tim, welcome to the show.

00:01:19 Kevin Mako: Kevin, pleasure to be here. Thanks for having me. Well, we're excited to talk to you about e-commerce. You obviously work with many brands, some small brands,

00:01:26 Kevin Mako: but also some very sizable brands, primarily in the middle market, scaling up their e-commerce. e-commerce initiatives.

00:01:33 Kevin Mako: So it's something that's really important to any hardware startup or scale up thinking about e-commerce, how to do it and how to do it well.

00:01:41 Tim Bucciarelli: First and foremost, how'd you get to where you are today? So I've been involved in e-commerce and technology for many years from working at

00:01:50 Tim Bucciarelli: a satellite telecommunications company in the 90s and transitioning over into kind of the opposite

00:01:58 Tim Bucciarelli: at end of the spectrum, specialty food and managing a mail order business for specialty food shipments throughout the U.S., but always really focused on

00:02:07 Tim Bucciarelli: translating those businesses into the online realm.

00:02:11 Kevin Mako: So building out e-commerce websites, meeting our customers' needs online, and delivering our products throughout the country.

00:02:18 Kevin Mako: Right on. That's a great history and a great segue into building companies in their entire e-commerce presence today. So for those you who are unfamiliar that are

00:02:26 Kevin Mako: listening. Tim, can you just give us a bit of an explanation of what is e-commerce and

00:02:31 Tim Bucciarelli: why is it important to a scaling up hardware brand? Sure. So e-commerce, I mean, pretty much everyone is going to be

00:02:37 Tim Bucciarelli: familiar with sites like Amazon, for example, and that is kind of the pinnacle of e-commerce today where you are essentially going and purchasing what you

00:02:46 Tim Bucciarelli: need or want online with a credit card or with a variety of other payment mechanisms today. So it's just a way for people who are

00:02:56 Tim Bucciarelli: online to purchase your products. That's essentially what e-commerce is. Now, there is just something to clarify here.

00:03:05 Tim Bucciarelli: E-commerce is typically thought of as strictly a business-to-consumer arrangement, B2C,

00:03:11 Tim Bucciarelli: but it actually can play a very substantial role in manufacturers, sales enablement. It can also

00:03:18 Tim Bucciarelli: be for distributors and wholesalers. So all it is, it's making use of the Internet to

00:03:26 Kevin Mako: improve your efficiency in selling your products. That's really at the end of the day what you're trying to do with e-commerce.

00:03:34 Kevin Mako: I'm glad you brought that up because there really are those two elements. We've actually had folks on the show that focused strictly on e-commerce only to business to

00:03:42 Kevin Mako: business, which is interesting because traditionally when people think of e-commerce, they think of

00:03:46 Kevin Mako: selling to the mass public via Amazon or Shopify or one of these other platforms. But there's more to it, especially today.

00:03:53 Kevin Mako: It's a giant evolving beast that has many different elements. And if you're not thinking of e-commerce yet, it's something that needs to be on your radar no matter what your

00:04:03 Kevin Mako: business plan is, because probably something to do with e-commerce will fit well or at least

00:04:08 Tim Bucciarelli: amplify what you're trying to do no matter what way you plan on selling or licensing or growing your product brand.

00:04:15 Tim Bucciarelli: You know, it can be a relatively complicated thought process. Because if you do want to sell on Amazon just as one example.

00:04:23 Tim Bucciarelli: They have a few different ways that you can sell on Amazon. They can manage your inventory. They can do the distribution for you. You can manage your

00:04:30 Tim Bucciarelli: inventory. You handle all the shipments. You have to consider the take that they get so that your margin is reduced. What pricing structure are you going to do?

00:04:40 Tim Bucciarelli: How are you going to make that up? But the volume potentially could be substantial. So there are a lot of situations in how you implement your e-commerce strategy.

00:04:49 Kevin Mako: And there are so many different considerations that are business considerations as well as technology considerations.

00:04:55 Kevin Mako: Well, let's dive into some of those.

00:04:58 Kevin Mako: Imagine let's start from a blank slate. So you've got a new product.

00:05:02 Kevin Mako: You're almost ready to be manufacturing.

00:05:04 Tim Bucciarelli: You're getting there. And you're starting to build out your strategy for selling via e-commerce. Where do you start? What do you do? A couple of things to understand.

00:05:13 Tim Bucciarelli: First, it's worth understanding the market for e-commerce platforms. So there are any number of e-commerce platforms from very simple

00:05:22 Tim Bucciarelli: e-commerce platforms such as Wix or WooCommerce or Shopify to kind of mid -market such as big commerce to more kind

00:05:32 Tim Bucciarelli: of mid-enterprice scale such as Adobe Commerce or Magento. So those are just the platforms.

00:05:40 Tim Bucciarelli: Now you probably also have some systems in your back end that you need to integrate with your e-commerce platforms. So that's another consideration. Do you have an ERP?

00:05:50 Tim Bucciarelli: Do you have a CRM? Do you have a content management system? What elements of your back end do you need to tie in to your e -commerce solution?

00:05:59 Tim Bucciarelli: Because unless you tie them together, you then frequently have two areas where you need to update your inventory, two areas to update your content, two areas to make sure that your

00:06:09 Tim Bucciarelli: images are all up to date. So really unifying your systems is an essential component of e-commerce success.

00:06:16 Tim Bucciarelli: So you know your backend systems, you know your platform options, which platform options give you the greatest opportunity to connect everything.

00:06:24 Tim Bucciarelli: And then you have to consider and what's that going to cost? So that's just one important starting point. Number one, get to know the platforms. What are the differences?

00:06:33 Tim Bucciarelli: How can they serve you the best?

00:06:35 Kevin Mako: What systems do you have and which of those platforms allow you to tie those systems together? So those are the really essential starting points, I would say.

00:06:44 Kevin Mako: and then you can go from there and really dial it in. I like that you mentioned both the front end and the back end because everybody generally thinks first on,

00:06:52 Kevin Mako: well, how am I going to sell this product? But then keep in mind, the back end is critical and those two things tie together.

00:06:57 Kevin Mako: So I want to actually switch over to the back end just for a little bit. Can you go through those terms that you mentioned and describe what each of them are

00:07:04 Kevin Mako: and how that actually applies to a strong backend system? Because in my opinion, you need to start at least with a strong foundation

00:07:10 Tim Bucciarelli: of how you're managing your inventory, your customers, and your data. then try and figure out which platform and how to connect to it to actually start using that to sell.

00:07:20 Tim Bucciarelli: Yeah, ERP is enterprise resource platform, and that is essentially most often,

00:07:27 Tim Bucciarelli: it's where companies house their product information, their inventory management. But just to be honest, not every company has an ERP.

00:07:34 Tim Bucciarelli: It could be a variety of different platforms that they use, but essentially it's inventory,

00:07:40 Tim Bucciarelli: it's pricing, it's the nuts and bolts of your product information. So if you've got a highly engineered product with a lot of detailed specifications,

00:07:50 Tim Bucciarelli: those specifications would be housed in a database, likely in a separate database.

00:07:56 Tim Bucciarelli: And you would need to make sure that you have the pipes to carry that information up to your front end

00:08:03 Tim Bucciarelli: so that you can display it accurately so that you can create that experience with your audience

00:08:09 Tim Bucciarelli: who depends on knowing those specifications to want to work with your product.

00:08:14 Tim Bucciarelli: particular. So that's just one element and that's really the core is the pricing, the inventory management, the product details.

00:08:21 Tim Bucciarelli: Then there's, if you have a separate tool to create your marketing content, some people call it a PIM or a DAM.

00:08:28 Tim Bucciarelli: So a PIM is a product information management tool. Platform like Kineo, for example, is a popular one.

00:08:34 Tim Bucciarelli: And that is a central repository again for product data, but also more of the copy and the images and

00:08:43 Tim Bucciarelli: the banners or the taglines that you can send out to your website, but also to your marketing platforms, social media. I think those

00:08:52 Tim Bucciarelli: are likely two of the largest. I mean, if you really wanted to get it integrated, you would be

00:08:57 Tim Bucciarelli: looking at integrations with your financial system as well so that your orders are automatically

00:09:01 Kevin Mako: pass through into your order management system or your financial system. So those are just a few

00:09:07 Kevin Mako: of the backend areas that are important to connect to e-commerce. And I think especially for startups, it's important to realize that most of the time these things

00:09:16 Kevin Mako: start as a spreadsheet, all of them. So you think about your ERP system. Well, that's your inventory. So you ordered 500 units. How much did you pay?

00:09:24 Kevin Mako: How much did it cost to get it here? What's your landed cost? How much do you want to sell it for? And then where's your one-page information

00:09:31 Kevin Mako: sheet that you're using to sell or whatever else your marketing sheet? And that could be it. That's how a lot of hardware startups begin.

00:09:39 Kevin Mako: And then, of course, over time, as you start to have multiple buyers or possibly even multiple sellers, then you need more and more advanced systems over time.

00:09:47 Kevin Mako: I only mention that just because I don't want to scare folks off with all of these terms. But the reality is if you're thinking about kind of how the bigger players do it, which is

00:09:55 Kevin Mako: what Tim's involved with, it all kind of trickles down to this basic data that you can start with on day one, just organizing in a spreadsheet, which is simple as

00:10:04 Kevin Mako: putting your basic information that you know at the time into that spreadsheet so that it's organized. And believe it or not, a lot of startups don't even have that in place.

00:10:12 Kevin Mako: So that's your easy first step. But then keep a mind that as things evolve over time, as you get more serious, you will have to probably start integrating

00:10:21 Tim Bucciarelli: it with actual managed platforms so that, as Tim mentioned, it connects with these pipelines, these data pipelines between your selling material or your buyers and

00:10:30 Tim Bucciarelli: your platform, your underlying initial data that you're actually submitting to those various buyers? That's a really good point,

00:10:37 Tim Bucciarelli: because I think that all of your listeners want to build their business. All of your listeners want to not just do 100 sales a month.

00:10:45 Tim Bucciarelli: They want to grow. And so when you're considering what you want to be doing online and the technology that can support you, you should be looking at least

00:10:53 Tim Bucciarelli: out at a six-year window. And can that technology scale with your scaling plans? So if you're

00:11:01 Tim Bucciarelli: starting out on a very simple e-commerce platform, that might be good for your budget today.

00:11:06 Tim Bucciarelli: But looking forward, six years from now, is it going to be able to support, let's say, you know,

00:11:12 Tim Bucciarelli: you want to triple your sales in the first three years and then triple again in the next three years, the volume of people coming to your website will increase dramatically.

00:11:20 Tim Bucciarelli: The number of transactions per day per month will increase dramatically. Your site needs to be fast, legible. It has to have all the information in it.

00:11:30 Kevin Mako: And can that site support that as you plan to grow? So that's a really important consideration.

00:11:36 Kevin Mako: And it's not like you have to have all those systems that I mentioned, but at the very least, your vision of growth should be matched with the technologies that you

00:11:44 Kevin Mako: select. And remember, to tack on to that, it's always easier to build a system when you're smaller and have less data sets than in the future.

00:11:53 Kevin Mako: Now is always easier, cheaper, faster than trying to retroactively do it back. And I even think of Mako Design in the early days. When we only had a

00:12:01 Kevin Mako: handful of clients, it was on a word document in order, right? And at the four or five different clients and what the current status was.

00:12:08 Kevin Mako: Eventually, we migrated to a spreadsheet. And then from there, we migrated to CRM. But we did it always far ahead of when we actually needed it. So we were ahead of the

00:12:16 Kevin Mako: curve. Because especially as you're moving from one system, especially something simple like word to a

00:12:21 Kevin Mako: spreadsheet or spreadsheet to a database, you're going to have manual transactions that occur. You're going to have some sort of data inaccuracies.

00:12:27 Kevin Mako: And if you're looking through all those different inaccuracies as a larger organization as opposed to a smaller one, it's simply going to consume more time. So one of the

00:12:34 Kevin Mako: best things that you can do is just get comfortable with the tools, not just because of the speed and the cost to implement these systems now, but so that you can

00:12:42 Kevin Mako: learn as an entrepreneur. You're here to build a business and to scale. So the quicker and the easier you learn these technologies, the more you realize they're not daunting.

00:12:52 Tim Bucciarelli: They're not scary. In fact, they're built to be user-friendly once you actually learn how to figure them out, there's a reason that everybody's using them at the bigger levels.

00:13:00 Tim Bucciarelli: It's because there is that simplicity built into the complexity. And the sooner you start, the easier that process all becomes. So I will say one additional thing.

00:13:09 Tim Bucciarelli: I think for entrepreneurs,

00:13:11 Tim Bucciarelli: small business owners, maybe creating one product and really trying to drive that through the online channel,

00:13:17 Tim Bucciarelli: you know, you could probably hire a solo developer to help you implement an e-commerce website. It's just

00:13:23 Tim Bucciarelli: important, again, with that scalability, eventually you may need a design and development agency like Ironplane.

00:13:30 Tim Bucciarelli: This isn't a big sales pitch, but I just want to make sure that that relationship is really important.

00:13:36 Tim Bucciarelli: If you can find an agency that you can trust and depend on to grow with you and start you out and knows your business and knows your product and knows your audience and over

00:13:46 Tim Bucciarelli: the years can help you build out that platform for your e-commerce and optimize that platform, that's really a critical relationship.

00:13:55 Tim Bucciarelli: It's not like you just go out and you buy an e-commerce platform.

00:13:58 Kevin Mako: I mean, yes, in some cases, but there's always the ongoing improvement and care and feeding of that platform.

00:14:06 Kevin Mako: And the stronger the relationship you have with an agency or development team to help you, the better you are for the long term, I think.

00:14:13 Kevin Mako: So that's an important element to consider. Let's focus on some of the front-facing side.

00:14:18 Kevin Mako: So we've kind of focused on the back end and how important the data is to manage and built well

00:14:22 Kevin Mako: into systems that actually can translate to the front-end platforms. Go through some of the platforms that you talked about earlier.

00:14:28 Kevin Mako: You talked about the simple stuff, the medium stuff, and enterprise. Start at the bottom. What are some of the basic platforms that somebody could get

00:14:35 Kevin Mako: involved with actually sell via e-commerce and maybe some

00:14:39 Tim Bucciarelli: quick pros and cons to each? And then work your way up to some of those mid-tier systems so that everybody can have an

00:14:44 Tim Bucciarelli: understanding of how a business could scale from kind of starting out small to building into a mid-sized enterprise like so many of your clients have.

00:14:53 Tim Bucciarelli: A lot of your listeners will know WordPress, for example, and it's a very popular. It started out as really a blogging platform, and it has evolved

00:15:02 Tim Bucciarelli: to support many very large websites from the content side of things. And over the years, their clientele was very interested in having an

00:15:12 Tim Bucciarelli: add-on to their blog for e-commerce. So essentially, you would have your blog, but you want to sell some things on the same.

00:15:19 Tim Bucciarelli: side. And so that's where their add-on came about, and that's what WooCommerce is. So it's WooCommerce is an add-on to the WordPress platform.

00:15:28 Tim Bucciarelli: So that is a pretty customizable tool, but it's also because it's linked to the WordPress Foundation, it may prove a little bit less

00:15:38 Tim Bucciarelli: robust than some of the more substantial e-commerce platforms out there. And that is, you host it somewhere on a hosting company.

00:15:45 Tim Bucciarelli: You can customize it to your needs over time. The flip side of of that is what's called SaaS, software as a service, and that's where Shopify comes in.

00:15:55 Tim Bucciarelli: What that is, it's basically a central maintained piece of software that's distributed out to all of its users.

00:16:03 Tim Bucciarelli: So you don't really have the way to get into the Shopify core code and customize it to your needs.

00:16:09 Tim Bucciarelli: It's centrally managed by the Shopify team, but they've built it so that it's substantially what most companies will need to serve

00:16:17 Tim Bucciarelli: their needs. So you know, you don't You don't have to worry about hosting. You don't have to worry about PCI compliance. You don't have to worry about site security.

00:16:25 Tim Bucciarelli: Shopify has that all dialed in very well. If you do want some super custom design or super custom functionality,

00:16:34 Tim Bucciarelli: you're not going to be able to do that with Shopify. There are other limitations within that platform because it is centrally managed.

00:16:40 Tim Bucciarelli: Big Commerce is similar, but they've tried to open it up a little bit more so that you can do a little bit more customization and integration, but it is a SaaS platform as well.

00:16:49 Tim Bucciarelli: Then on the other end of the spectrum is Adobe's platform, which is Adobe Commerce.

00:16:56 Tim Bucciarelli: And that used to be called Magento. So Adobe purchased Magento, I think it was 2014.

00:17:02 Tim Bucciarelli: And they've constantly been upgrading the platform. And they now have it as part of their Adobe Experience Cloud.

00:17:09 Tim Bucciarelli: This is very robust, very customizable, very capable of being integrated with any number of systems. This platform has been around.

00:17:19 Tim Bucciarelli: for almost 20 years now. And a lot of people have been developing on this platform. So that's

00:17:25 Kevin Mako: really where IronPlane specializes in that platform itself. So we know that inside and out.

00:17:31 Kevin Mako: But we also help people make that decision, which platform is going to be best for their business. So that's kind of just a very broad introduction of some

00:17:41 Kevin Mako: of the biggest names in e-commerce right now.

00:17:44 Kevin Mako: I appreciate that overview. And it's great to see how you can kind of start small and lean and mean, but you're not going to have a lot of customization, but then eventually

00:17:52 Kevin Mako: work your way up to. And depending on your business model, obviously, you can start at any point in the process.

00:17:57 Kevin Mako: But any of these are a platform that can integrate with your backend platforms. And there's all sorts of connections via Zapier and other technology that allows you to connect

00:18:06 Kevin Mako: all this data. I think the key message here is make sure that your data is linked. Your front end and your back end is linked.

00:18:11 Kevin Mako: So you have complete exposure to exactly what's happening in real time via the cloud from your mobile phone or your computer anywhere on the world so that your data

00:18:20 Kevin Mako: is tracked so you're managing both your customers and your suppliers and making that link strong

00:18:25 Kevin Mako: and with these platforms they all have the ability to do that at least at a base level and of course as

00:18:30 Kevin Mako: you get into the better and more customizable platforms you have more tools available but it's

00:18:35 Kevin Mako: important to at least start with one of these especially as you get past your especially as a startup

00:18:40 Kevin Mako: after you get past your first or second let's say set of orders if you're selling bulk it's going to

00:18:45 Kevin Mako: become more and more important because it is exponentially more difficult, especially as a scaling

00:18:50 Kevin Mako: from, especially one that scales without seeing it coming, which is quite common in hardware.

00:18:55 Kevin Mako: Hardware is one of those things where, you know, if you do a few hundred units well, all of a sudden now somebody knocks on your door and wants a few thousand a month.

00:19:01 Kevin Mako: And that changes your business dramatically. And now you're scrambling to pay catch-ups. So the sooner that you can get these

00:19:06 Kevin Mako: things in place, the easier it's going to be to scale when that opportunity for scale comes.

00:19:11 Kevin Mako: And a lot of the time as well, these structures are part of the reason that you do end up

00:19:16 Kevin Mako: scaling because you have it in order and you have the proper content and you look professional

00:19:20 Tim Bucciarelli: and everything's done well. So that might be the deciding factor between a buy, no buy decision from a substantial buyer pool.

00:19:29 Tim Bucciarelli: So all of this stuff kind of plays into, you know, thinking about this strategy from day one, especially as you're starting to emerge, especially if you're scaling, this will come

00:19:38 Tim Bucciarelli: into play sooner or later if you haven't brought this into place today. Yeah, and I think the world of the B2B buyers, you know, the big purchasers,

00:19:46 Tim Bucciarelli: their temperament has been changing. So the people who are now in those positions are, you know, 30 something and they've grown up working with the Amazon's of the world.

00:19:56 Tim Bucciarelli: And so they come to expect that online interactivity so that they're coming into this thinking, oh, I should be able to go online right now

00:20:04 Tim Bucciarelli: and buy a thousand units. And oh, I know that I'm going to need those thousand units every six months. So I just

00:20:11 Tim Bucciarelli: just want to set up a recurring order and they might even expect that they should be able to do that online.

00:20:18 Tim Bucciarelli: And so knowing what your expectations are of your buyers and trying to deliver that to them online is a challenge and an opportunity because not everyone can

00:20:27 Tim Bucciarelli: do it and not everyone can do it well. And it's especially true if you have a customizable product, whether it's the

00:20:34 Tim Bucciarelli: color of the product or, you know, let's say the memory or,

00:20:39 Kevin Mako: you know, other other facets of the product, that you can allow your consumers to configure online.

00:20:46 Tim Bucciarelli: How are you going to translate that configuration from a phone call or in person to your online website?

00:20:53 Tim Bucciarelli: So these are really important considerations as you go into it. What is your buyer going to expect? How can you make their experience more efficient online?

00:21:02 Tim Bucciarelli: That's great stuff, Tim.

00:21:04 Kevin Mako: Any last tips for scaling hardware startups in the e-commerce space before we say goodbye?

00:21:09 Tim Bucciarelli: Well, do your research first.

00:21:12 Kevin Mako: It's the worst case scenario is you make the wrong choice for your e-commerce platform and four years into it, you have to re-platform. That is a terrible situation to be in.

00:21:21 Kevin Mako: Do your research, talk to a company that knows what they're doing and just get as many demos and learn as much as you can before you make a decision. That's great advice, Tim.

00:21:30 Kevin Mako: Thanks again for your time today and all your words of wisdom. Look forward to talk to you soon. Take care of it. Thank you. My pleasure. Bye-bye.

00:21:39 Kevin Mako: this episode of the Product Startup Podcast, the show that teaches you what it really takes to bring your product to market and turn it into a big success.

00:21:49 Kevin Mako: This podcast series is brought to you by Mako Design + Invent, the original and leading firm

00:21:55 Narrator: in North America to provide global caliber in-to-end physical consumer product development to startups, inventors, and small product business clients.

00:22:04 Narrator: If you're looking for product development help on your invention, head over to MakoDesign.com.

00:22:10 Narrator: That's ma-k-o-design.com for a free consultation from one of Mako Design's four design studios from coast to coast.

00:22:19 Narrator: Thanks for listening and see you next time.