[EP 20] Modern Merchant Podcast: Rick Wilson w/ Miva

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In this episode of the Modern Merchant Podcast, we are excited to welcome Rick Wilson, CEO of Miva, a flexible ecommerce platform, website, and shopping cart solution for online sellers.

Austin, Travis, and Rick dive into various topics, including how Miva got started, notable SaaS inflection points, brands and manufacturers going D2C, having a mixed selling strategy online, what are we expecting for 2022, and much more!

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Below, you will find a transcript of the episode.

Austin Rose:

Hey, everyone. Thanks for tuning into another episode of Modern Merchant Podcast. I am your host, Austin. I’m here with Travis, the CEO of Flxpoint. And in today’s episode, we have a really special guest and a great partner of ours. This is Rick Wilson, CEO of Miva. Rick, thanks for jumping on today.

Rick Wilson:

Awesome. Hey, guys. Thanks for having me. Always a pleasure.

Austin Rose:

Yeah. Yeah. And we’ve had a really good relationship so far, I think at least in this past year with Miva. There’s a lot of great stuff that we can get into and talk about our services and how it works with Miva, really good solid integration.

Austin Rose:

But for everybody out there that hasn’t heard of Miva, Rick, why don’t you give us just a quick overview of your services and what you guys provide?

Rick Wilson:

Sure. So we’re an ecommerce platform. We sit in the space somewhere between Shopify on the low end and Magento on the complex end. We’re kind of in that big center, right? So people doing anywhere from a million to 100 million in online sales who have complex businesses, often B2B, D2C combined.

Austin Rose:

Gotcha. Gotcha. That’s actually a great way of explaining it. I feel like when I first started hearing about Miva, I wasn’t too sure where you guys fit into the mold.

Rick Wilson:

I will tell you, that sentence is an incredibly hard sentence to distill down, especially since we raised some financing in 2021. You finally figure out how to get that statement out of your mouth.

Austin Rose:

I noticed you got started with Miva a good bit back. How did that happen? How did you get started with Miva and what was that journey like at the beginning?

Rick Wilson:

Sure. So Miva has been around forever when it comes to internet time. I was friends with the founder of Miva. He’s been out of the business now, gosh, for 18 years. But Miva started in the 1990s and I came on as the director of sales, I was in my 20s. I was a young man.

Rick Wilson:

And back then, software as a service didn’t exist, so we sold through hosting companies. So imagine if the only way you could get your ecommerce platform was to go to, say, GoDaddy or Bluehost or something.

Rick Wilson:

And so we used to sell to web-hosting companies. And frankly, I was just out pounding the pavement, talking to every web-hosting company under the sun. This is in the late ’90s, early 2000s. We sold that company to a publicly-traded company in 2003.

Rick Wilson:

Without going into that long backstory, their plan didn’t really work out because they were a competitor of Google AdWords, and we all know Google AdWords won that space. And so in 2007, they sold off all the things they bought, including Miva.

Rick Wilson:

And so myself and four other people bought it back from them and we rebuilt it. And so I’ve been running Miva now since 2007. Lots to dig into there, so I’ll let you guide that discussion, but that’s how I got here.

Austin Rose:

That’s an interesting way to get there. And that sounds like what leads up to this question. And I know, Travis, you like to ask this question too with other CEOs in the space of SaaS. What are some notable inflection points for Miva over the last 14 years?

Austin Rose:

I’m assuming that would be one of the first. Any other ones that just come to mind that you really enjoy, that you’ve been through that either barrier or win for the team?

Rick Wilson:

Yeah. Gosh, lots of them. But I think when we bought Miva back in 2007, we didn’t have a recurring revenue base. Right? People would buy licenses the way you bought Microsoft Word in the ’90s. Some of those people listening, they may not remember that, but I do.

Rick Wilson:

So the first inflection point really was to create a stable revenue base. And then the second and probably the most important one, and I think for your average E-tailer, this probably isn’t as top-of-mind, but for anyone who’s in the software space, it is. Figuring out our business model took a long time. And that really came to fruition in 2015.

Rick Wilson:

We’re not trying to be WooCommerce. We’re not trying to be Shopify. There’s no world in which we imagine a million merchants. Right? We’re more on the Magento end. We serve a couple of thousand merchants, but they do billions in sales. So we had to have a business model that aligned with that. And so being able to have a revenue-based business model.

Rick Wilson:

Because if someone’s doing 50 million in online sales, their support needs and their demands are going to be different than someone doing 50,000 in online sales. And so we needed a pricing model to match that. So that was probably the biggest inflection point of the company to really set us up for the modern stage of growth.

Travis Mariea:

And do you guys scale with revenue taking a percentage or do they just go to a new plan or is it orders? How do you guys end up doing that?

Rick Wilson:

Generally they go to a new plan, so it’s buckets. So we do revenue buckets. Right? Shopify Plus does it as a pure percentage of sales. There’s a world in which I can imagine that. There’s a lot of complexities around that though. Right? What happens when there’s a refund? What happens when you sell something to your mom? Right?

Rick Wilson:

So it’s a little easier to navigate when you just put it into a bucket. Right? So if you’re doing a million to 2.5 million in sales, that’s Price A. If you’re doing 2.5 to five, it’s Price B. And that’s been a lot easier for us to understand and for our customers to understand.

Travis Mariea:

Cool. Yeah. Before we move on, I know we’re going to want to get into some D2C stuff and talk about brands, I’d love to just maybe stop and pause and talk about… It sounds like the raising of money was recent, right? You said this year or what? Yeah. Can you talk a little bit about that?

Travis Mariea:

You’ve been with the company for a while now it sounds, obviously, right? So yeah. Was this the first time you guys raised? Why was this the right time? Just curious about your thoughts about raising money in general.

Rick Wilson:

Sure. So this is our second private equity raise. So we bootstrapped the company when we bought it back in 2007, we bootstrapped it for the first 10 years. So for 10 years, we went from about half a million in revenue to about 10 million in revenue, all doing it while being profitable.

Rick Wilson:

And we went from about five employees to about 80 employees back in 2017. In 2017, my business partner who I did that with, for some personal health reasons, wanted to retire. And so we did our first private equity deal back then. And it was a minority deal that was mostly focused on getting him the capital to retire.

Rick Wilson:

And I viewed that phase as… A private equity-backed tech company is a very different thing than a bootstrapped tech company. And so we really viewed that first round of investment as a transitory period to turn into a more private equity-backed company.

Rick Wilson:

So we did all the things you might expect, right? You build out a customer success team. You hire a senior VP of sales and marketing. You do Salesforce. You do HubSpot. You do all those tech things that modern SaaS companies do.

Rick Wilson:

And we did that and executed on that over from 2017 through late 2020. We had been nailing our growth, especially in our core market. So our mid-market and emerging enterprise business was growing around 35%. And we decided it was time to go back out to market. So we did another round that just closed in October and that round bought out the previous private equity guys and set us up for this next phase.

Rick Wilson:

I don’t like to spend too much time on timing. You do it when it’s right for the business. Right? Trying to time the market is a bit of a fool’s errand. It’s like jumping off a cliff into the ocean and trying to figure out what the ocean’s going to be at when you land.

Rick Wilson:

So we just thought it was the right time for the business. The other thing is, and again, I don’t want to go too inside baseball, but when it comes to private-equity deals, your investors invest on a time horizon. And so we were still pretty early in our previous investors’ time horizon. We were only four and a half years in. But they want to be out at the five to seven-year mark and things seemed like a good time to do it.

Travis Mariea:

Yeah. Yeah. No, makes a ton of sense. Yeah. Austin, if it’s all right, switching gears maybe into more of that. And I think this is probably a good segue to start talking about your guys’ customer base and that market that you’re attacking.

Travis Mariea:

I’m just curious. We talk about brands. We talk about the retailer side of things, D2C versus traditional retail. When you look at your customers, what is the makeup of, “I’m a sub-10 SKU brand. I have my own brand. I create my own or I white-label or whatever it might be. And I’m selling about 10 SKUs on average.” Versus a reseller or the retailer side that is buying up other brands, buying wholesale, dropshipping, holding 100+, maybe 1,000 SKUs, a catalog is 1,000 SKUs.

Travis Mariea:

How do you guys look at those two different personas and what’s your current makeup and who are you actually going after?

Rick Wilson:

Sure. So almost all of our customers are going to have hundreds, if not thousands or tens of thousands of SKUs. Right? Now, that doesn’t mean they’re resellers.

Rick Wilson:

I would say the world of business-to-consumer resellers, kind of little-bitty mini Amazons, not that world has changed. In the late ’90s or early 2000s, you’d have one doing that in whatever, bicycle parts or motocross. And we still see some of that. But really when it comes to selling other people’s products, you have Amazon, Walmart, Target, and they’ve really dominated that. Right?

Rick Wilson:

But our customers… If you’re selling 10 SKUs and you’re making them yourself and you’re going D2C, that is a stereotypical Shopify client. And for those who philosophically don’t want to pay a SaaS fee and therefore they’ll pay a hosting fee and they want to use WooCommerce, then they go to WooCommerce. But you’re on a certain end of the market. We don’t get a lot of that.

Rick Wilson:

Our customers tend to be… We do have a lot of manufacturers though. And so we have a lot of manufacturers who want to do hybrid business-to-business. And that term is a little funky, right? Because business-to-business literally just means any business selling to another business.

Rick Wilson:

So if I sell you guys something at Flxpoint, now we’re business-to-business. Right? But if I sell something to you directly, Travis, now we’re direct-to-consumer. Right? So that line can be a little murky. But about half of our customers do both on the same site. And so that’s one of our specialties.

Rick Wilson:

The other thing is large SKU counts. If you’re a manufacturer of aftermarket auto parts and you’re selling things you can add to a Ford F-150. And Ford F-150s, sometimes those pieces change based on not just the model year, but the sub-model year, right? So you might need to have a different product for a 2017 Ford F-150 or a 2017.5 Ford F-150.

Rick Wilson:

So you could have something as simple as a single SKU of, say, a truck bed liner. And that truck bed liner could have 50 sub-SKUs. Right? And those are the things that are hard to do on a WooCommerce or Shopify and do them well.

Rick Wilson:

The alternative to us would be custom platforms or Magento. And Magento, you can do a lot with it, no knock on the platform, but it is a big lift. It’s a heavy overhead.

Travis Mariea:

Right. So it sounds like the two big pieces here I’m taking away, so the data management and fitment data was your example, but more the sophisticated data management of the relationship of the different data points that you’ve got on a product. And then doing both B2B and D2C from the same site. Right?

Rick Wilson:

Yep.

Travis Mariea:

Outside the data, what kind of complexities are there that we’re not thinking about that makes it tough to do it on other platforms?

Rick Wilson:

Sure. There’s a number of things, right? You can start with API limits. So if you’re trying to do buy online, pick up in-store, even if you had a relatively small SKU count list… Although if you have a retail store, you probably have more than a few SKUs.

Rick Wilson:

But if you’re a retail store, let’s say you’re doing clothing of some sort and you have 100 retail outlets and you want to do locally-shipped inventory and you want people to do buy online, pick up in-store, that requires a pretty robust API that’s going to allow you to do lookups at will. Right?

Rick Wilson:

Because if someone hits your store to look up, is there a baseball cap down the street from me available right now? It’s not acceptable to them if you’ve maxed out an API limit, right? They need to know the answer to that question. So you could do that.

Rick Wilson:

Probably the biggest thing on B2B though, beyond that, is that when a business is selling to another business, the complexity really lies in the relationship rules. So do I charge you sales tax? Do I charge you for the shipping or do I put it on your shipping account?

Rick Wilson:

What’s your special pricing? Do you have products that I don’t normally show on my website but you need to be able to order on my website? It’s one thing for a consumer, right?

Rick Wilson:

Let’s say you’re selling cosmetics. So a consumer might want to come, someone’s going to go look for a lipstick. And they’re going to find the lipstick and they’re going to pick a shade. They don’t mind that it’s six clicks because they want to look at the pictures, they want to read the reviews.

Rick Wilson:

But if I’m a boutique and I want to buy 100 of those lipsticks, I don’t want to do six clicks and I don’t want to see all the reviews. I already know the SKU I want. I want to go to something that looks more like an Excel page. Right? I want to see something that looks like a spreadsheet.

Rick Wilson:

And I want to see all the SKUs I normally order and I just want to go type in quantities and check out and put my PO in. And it really is a different shopping experience than an optimized-for-conversion retail shopping experience.

Travis Mariea:

Yeah. Makes sense. And then just be able to have that flexibility, manage it in one spot, but be able to provide those two different user experiences.

Rick Wilson:

Yeah. And then, gosh, B2B really quickly goes into a million areas. Right? What if you have sales reps on the field and you need to have a sales rep portal, etc., etc.?

Travis Mariea:

Invoicing. Right. That’s a big thing. Net terms, pay later, all of that. Yeah.

Rick Wilson:

Yep. Exactly. And then one of the other complexities you see, and this doesn’t necessarily tie to B2B per se, but when we talk complexity, we think of other things like do you have to be approved to buy something?

Rick Wilson:

So is it, say, a pharmaceutical and you need to up to upload a medical license? Or are you doing specialty foods and you need just-in-time delivery? If I’m shipping you a Maine lobster, I need to know that lobster is cold and gets there on time. Right?

Rick Wilson:

And so I still might only have 20 SKUs, but I better be able to tell you exactly when it’s leaving the warehouse and exactly when it’s landing. Otherwise, that very expensive crustacean you just bought from me may not be very good.

Travis Mariea:

Yeah. Yeah. We see that the data management is becoming more and more important when it comes to larger, bigger, really more complex fulfillment options, like you mentioned, buy online, pick up in-store.

Travis Mariea:

Even just specialty items, right? Just keeping like, “This is a California-restricted item.” Or this says, “Must ship out today.” Or this one has a five-week lead time. Even the relationship between the listing you have on your store but could be fulfilled from multiple locations. This is a five-week lead time here, but it’s ready to go if it’s in this other warehouse in two days.

Travis Mariea:

So yeah, that’s definitely the gap we’re seeing getting closed in where you don’t want to do a full custom site or a Magento build. You want a SaaS platform that has that. Shopify certainly isn’t filling that today.

Travis Mariea:

BigCommerce, I don’t think. They’re trying a bit more, but not so much. So that’s where Miva sits is a little bit more of that complexity in the data management.

Rick Wilson:

Yeah, that’s right. That’s very well said. And you think about, let’s take something as popular as selling alcohol or wine, right? Talk about state shipping restrictions. Or you used the five-week lead time example. Someone wants to buy furniture and you got to manage credit card payments on that.

Rick Wilson:

Most ecommerce sites are set up… Now, granted, sure, you can tokenize a card and save it. Most ecommerce sites are set up to often capture and ship right away. That is the simplest path. Right? If I’ve got a T-shirt in stock and you want to buy it and you want it in three days, I’m going to off, capture, and fulfill.

Rick Wilson:

And once you deviate from that, then you start getting into the complexities of business. Look, if business wasn’t complex, first of all, there’d be no money to make. But second of all, everyone would do it.

Travis Mariea:

Yep.

Austin Rose:

Yeah.

Travis Mariea:

Yeah. So the last thing. Austin, I’ll kick it back to you. That’s the defensible side of Miva as a platform. I’m just talking about the business as a whole. Sure, it’s a lot of advantages there for the merchants because it allows them to do things they can’t do on other platforms in more of a plug-and-play way versus custom-building it.

Travis Mariea:

But being able to provide that complexity and provide hard-to-do or hard-to-manage businesses to those kinds of customers, I bet you have a good customer base. Right?

Travis Mariea:

It’s not a fly-by-night, “I want to start selling and making this thing online.” Just thinking out loud, that seems like it’s a huge advantage if a private equity firm is looking at you, I would assume.

Rick Wilson:

Yeah. No, absolutely. Our churn rate, our average customer lasts north of 12 years. So those are very long-tail customers.

Rick Wilson:

Even the ones who do churn, now, this is a little bit more of our legacy small base when we used to sell a lower price point. 60-65% of the people when they churn, they churn because they go out of business.

Rick Wilson:

Now, sometimes going out of business means you got bought and absorbed into someone else’s company. Right? There’s different definitions of going out of business. It doesn’t mean you always rolled up shop.

Rick Wilson:

But yeah, our churn rate’s low. And it is a very defensible place. On the one side, compared to, say, a Shopify store, if I gave my mom a Miva site, it’s going to feel more complex. Right?

Rick Wilson:

She’s not going to know where to start because it’s sort of like setting up QuickBooks the first time. QuickBooks isn’t hard to use, but if you don’t know accounting, QuickBooks is almost impossible. Right? Same idea here. Same idea with Photoshop.

Rick Wilson:

Great software is trying to take complex processes and make them usable, but you still need some expertise.

Travis Mariea:

No doubt. We see the same thing. All right. I got my good questions and I wanted to get a couple of them but I promised we’ll get on topic here.

Austin Rose:

We’re staying on pretty well. It’s funny. I want to snippet out what you just said about making complex software easy. I feel like we’ve heard that with our two head devs multiple times. And we could talk about that for hours.

Austin Rose:

Relatively staying on topic with manufacturers and brands, going direct-to-consumer versus going B2B versus doing both, it sounds like you guys I’m sure would get some people on. We get the same where they’re only doing B2B or they’re only doing D2C and they need to find that next new thing, whether it’s sales channels, whether it’s fulfillments to get a leg up for this year.

Austin Rose:

Is it advantageous for people to launch… Let’s stick with brands and manufacturers. Usually, they’re doing just B2B. Do we think it’s advantageous, especially nowadays, the past 5-10 years of this online boom, for them to start looking at D2C? And do they put all their eggs in that bucket? What does that look like for you, Rick, and your customers?

Rick Wilson:

Yeah. Obviously, this is just a perspective, right? But my take on that is that if I wasn’t manufacturing software but if I was manufacturing a good that I was selling online this way, I would want to have a direct relationship with my consumers, especially if it gets consumed that way.

Rick Wilson:

Now, there can be exceptions, right? If I sell parts to HP to build printers, most consumers aren’t looking for that part. Right? But if there is consumer demand for a product, there’s lots and lots of benefits for a manufacturer to go direct.

Rick Wilson:

First of all, because of modern online shopping, we’ve all been trained for it. The default assumption today is that you can go search for a brand’s website and there will be a way to buy.

Rick Wilson:

And we’ve all had that experience where you’ll find a brand and then it’s like, “Oh, find us on Amazon or Home Depot or Walmart.” And you’re kind of annoyed, right? You’re like, “Oh, okay.” And maybe you’re cool with Amazon because you’ve got Prime and you’re going to get it in two days. Or maybe you’re cool with Home Depot because you can go to the store and grab it.

Rick Wilson:

But sometimes you just want to go to the brand site because the brand site’s going to have support information, it’s going to have installation documents, it’s going to have more content than you’re going to find at Amazon. Amazon, for all of the benefits they provide, their product display pages are horrendous and customer service is non-existent.

Rick Wilson:

So customers expect brands to sell direct-to-consumer. And my experience with brands that don’t sell direct-to-consumer is they’re usually worried they’re going to offend their channel. They’re worried that the people they sell to who resell their product are going to somehow shun them. And I think that’s more of an old way of thinking.

Rick Wilson:

Always, there’s caveats to all this stuff, right? So it depends on your market, it depends on what you sell. But if a consumer expects you to sell direct and you can sell direct, you should.

Austin Rose:

Yeah. No, I agree. Travis, what do you think about… From what we’ve seen, I feel like, for most people, it makes a lot of sense for them to start going direct-to-consumer or doing a bit of both. We see a handful of different people in this realm.

Travis Mariea:

Yeah. No, I completely agree that having a diversified channel strategy, whether that’s multiple marketplaces or B2B and B2C and all that good stuff, it can definitely make a lot of sense for most businesses.

Travis Mariea:

I’ve been in this space for I think over 10 years now. And a lot of what I did before this company was work with brands. And I used to go to trade shows to go find them and pick them up and sell to them and all that stuff when they were trying to sell everyone else. But it still worked out.

Travis Mariea:

But one big thing that I noticed with brands that did not want to go direct-to-consumer, they didn’t want to ruin the relationship. They didn’t want to piss off their big retailer or whatever it might be. And this was 10 years ago. D2C was not as big as it is now.

Travis Mariea:

I’m curious. There’s definitely ways I always would pitch how you can manage both a B2B channel and your D2C channel. But I’m curious what you’ve seen with your customer base on the best practices to avoid that channel conflict essentially.

Rick Wilson:

Sure. I think there’s a few things. One, obviously, I think the most important thing, and it’s actually fairly simple to do, don’t be the low-price leader on your own website. Right?

Rick Wilson:

So it’s okay. If someone cares about saving 5%… I’ll use Amazon as the example since they’re ubiquitous. If someone cares about saving 5%, they’ll go to Amazon. They’ll figure it out. Or they’ll go to Walmart. So they’re going to go to the retailer that’s going to have that.

Rick Wilson:

But people have different buying needs, right? So sometimes you want product expertise. Sometimes you want to go see something in-person. Right? So sometimes it doesn’t really matter that it’s online. I want to go to the store. I want to hold the thing. I want to see if it fits.

Rick Wilson:

And so I think the main way to avoid channel conflict is to not undercut your channel. And then I think the second main way is just to be transparent with them. They all understand it. It is, I believe, an unreasonable request for your distribution partner to expect you to lose margin just to protect them. Right.

Rick Wilson:

Because the whole point of there being a distribution partner is they have to add value to the chain. So that value is customer service, that value is availability in person, or something else.

Rick Wilson:

If I wanted a telescope, let’s say it’s Christmas and I had a son and he wants to see the stars and I don’t know crap about telescopes, going to Amazon and picking a telescope is probably a challenging situation. It might be the cheaper option, but it would be better for me to go to a telescope shop and talk to someone who does this stuff. And they’re going to teach you. Or think about buying a nice bicycle or whatever.

Rick Wilson:

So your distributors should add value to the chain, and then just don’t undercut them, be transparent. And that should work. You’re absolutely right. I think 10 years ago, people threw hissy fits, they talked about trying to go around you. That’s not true. They’re not doing it.

Rick Wilson:

Well, I’ll say they’re not doing it unless they can. And if they can, they’ve already white-labeled or private-labeled it and they’ve already cut you out. That’s the other side of this coin that I think a lot of manufacturers get scared of.

Rick Wilson:

We’ve all been to Vons or Safeway, and there’s Tylenol and there’s a thing identical to Tylenol with a slightly different label. That’s the way of the retail world.

Travis Mariea:

Yeah. No doubt. It’s great to see that people have come around. And you’re right, it’s about being transparent. That was one of the things that shocked me when I first got into this industry where brands would set up little fake retail sites just to sell it, among other stuff.

Travis Mariea:

It’s funny though because you have seen this merge, and I think that’s what you guys have seen as well, just telling how you guys have built out your platform, this merge of what we call the mixed model kind of merchant where they’re a brand, and then they resell other products and augment their catalog and maybe spin up another site there just to gain traffic to their brand. Right?

Travis Mariea:

That’s a really common strategy we’ve seen a lot with people who are new. I used to consult with a kayak company, and they would sell other competitor kayaks just to get the AdWords and get the spend and shopping images up and be able to get exposure.

Travis Mariea:

Not only did they manufacture their own stuff, bring it over on a boat and sell it out of their own warehouse, they dropshipped to other kayak manufacturers. They brought in accessories to just bring in people who were searching for paddles and stuff like that.

Travis Mariea:

So that mixed model has been awesome to see and added a bunch of complexity for people like you and me and our companies to figure out how to solve for.

Travis Mariea:

So I guess the question in that is, seeing this, is there a certain strategy or… I guess we want to talk about putting eggs in certain baskets. How do you see the mixed selling model of the B2B and D2C evolving? Did we reach it? Everyone does everything now and it’s kind of a mixed model? Is it evolving past this? Just curious what you’re seeing as far as maybe some future strategies that are evolving currently.

Rick Wilson:

I don’t know if there’s a single answer to that. I think probably the one, you alluded to it a few minutes ago but we haven’t dug into it much is the omnichannel strategy. Right?

Rick Wilson:

At least in North America, Amazon is 40-50% of retail in North America, depending on your product line. And so I sort of start there, right? So if marketplaces in total are 50% of retail, so Amazon, eBay, Etsy, maybe throw Google shopping in there, although that’s not really the same thing. And if you’re not selling on marketplaces, maybe you’re scared Amazon’s going to knock your product off or whatever.

Rick Wilson:

I think that’s also an untenable situation. Right? Unless your product really is so easy to knock off that there’s nothing protecting you. But you should be mixed to the market.

Rick Wilson:

So what are your competitors doing? Because if your competitors are selling twice as much as you because [inaudible 00:27:16] on Amazon, you better fix that. Because over time, that slight edge advantage of having more revenue come in the door is going to help build a bigger business.

Rick Wilson:

And I think the alternative goes for B2B. So we still see a surprising number of business-to-business companies that their online ordering is atrocious. And they’re still heavily relying on salespeople to get the orders into the system.

Rick Wilson:

Look, I’m a salesperson by nature. Right? I started as a guy in sales, so I’m not an anti-sales person. But if over a five-year window, if your cost of sales is 10% higher than your competitor’s, I can pretty much predict who’s going to win in five years. Right? Because you can’t maintain an advantage over that.

Rick Wilson:

So I think it’s unique to your industry. And then occasionally, we see customers who, especially right now, they’re entirely supply-constrained, right? So it doesn’t matter if they can sell anymore. They don’t have any more product to sell. They have different issues, right?

Rick Wilson:

They need to think about pricing strategy, customer loyalty. Sure, you could probably crank your prices up for a while, but does that hurt you in the long run?

Rick Wilson:

So I think this continues to evolve and I think each individual market is, to some extent, unique. But you need to make sure that you’re distributing comparatively to your closest competitors.

Travis Mariea:

Yep. No doubt.

Austin Rose:

Great point. I think one thing too that we haven’t talked about, we’re talking about a lot of this mixed model, whether it’s sales strategy, omnichannel, D2C and B2B, let’s take a step back and let’s look at how we’re fulfilling products too.

Austin Rose:

And I think that’s one big hurdle that a lot of people don’t realize. Or maybe they realize it once they finally think, “I’ve been doing B2B. I’ve been selling pallets. We do huge shipments over to the West Coast or we do this, we do that.” And then they’re like, “Oh, let’s get an advantage. Let’s start doing D2C. This is where online shopping is going.”

Austin Rose:

People don’t take into account the fulfillment from your either 3PLs, your in-house warehousing, wherever you’re doing fulfillment from. You’re going from 100-unit shipping to one-unit shipping. What does that look like for your customers, Rick, and the challenges that they possess and maybe where Miva can help out?

Rick Wilson:

Yeah. That’s a great question. Speaking of transparency, well, Miva does help out a lot with that and my employees help a lot with that. Fulfillment is not my particular specialty.

Rick Wilson:

So I hear these stories bubble up the chain, but I can only tell anecdotes here. But we see everything, right? One of the trends you see right now is as fulfillment software gets better, if you have retail locations, the ability to use your retail inventory as shipment inventory. Right?

Rick Wilson:

Essentially, that’s become more and more common where buy online, pick up in-store becomes buy online, ship from store. Right? And so, therefore, I’m not maintaining separate warehouses, right? So we’re seeing that.

Rick Wilson:

And once you have the infrastructure for buy online, pick up in-store, as long as you have the ability to pack a box, you have the infrastructure for buy online, ship from store. Right? It’s the same concept.

Rick Wilson:

And what we see right now, we see a truly mixed-use scenario. So everything from a manufacturer with a singular warehouse and they’re just focused on shipping times based on carrier to people mixing 3PLs and warehouses and maybe even FBA. And so I don’t know that there’s a one-size-fits-all solution other than…

Rick Wilson:

Well, a couple of thoughts. Amazon had really set expectations for one to two-day shipping and then we had this whole supply chain disruption that’s going to continue through next year. And so at some level, customers’ expectations have been a little bit reset. Right?

Rick Wilson:

A year ago, we all thought, other than maybe finding toilet paper at the beginning of the pandemic, we all thought that we could get anything that day or the next day. I think people have had a reality check around that, which is probably good for your run-of-the-mill merchant. If Amazon can’t get it to you in a day or two, nobody can.

Rick Wilson:

And I think that’s nice expectation-setting. I think going back, customers this year, we saw it in our own sales figures, customers shopped earlier for the holidays.

Rick Wilson:

And so I think what we saw was the budding of a communication relationship between merchant and customer where merchants… We all got these emails this year, “Hey. Shop early because I want to make sure you get it in time.”

Rick Wilson:

You’ve seen a little bit of that in years past, but that was the message of 2021. Right? Don’t get left on the sidelines. Get your stuff early. Get it handled. And you saw a different kind of relationship being forged. And I think fulfillment was a key part of that.

Austin Rose:

It’s a good point. I think one thing that we talk about too, and Travis, I don’t know if you have any follow-up thoughts on this, is if you’ve never fulfilled individual packages versus pallets, just try it. Just give it a try. Figure it out.

Austin Rose:

All of us, we’ve all made certain decisions. I’m sure you’ve made decisions with Miva. Travis has made a decision with Flxpoint inventory sources. We’re just going to give it a try and we’re going to get our boots on the ground. And then you can start to figure out the nuances of individual shipping versus pallets.

Austin Rose:

And Travis, from a fulfillment perspective, because I feel like this is where our realm comes into play with doing both B2B and D2C, what are the challenges that we’ve seen with our customers? Whether it’s from individual fulfillments, connecting in the different centers.

Austin Rose:

We integrate with ShipStation, the likes of a SkuVault, a ShipHero. Some of the stuff that we’ve talked about in past podcasts. What are your thoughts on that, Trav?

Travis Mariea:

Yeah. I think this whole rise of direct-to-consumer in the last 10 years has been great for the industry we’re in where dropshipping and things like that have grown because these manufacturers, these brands have grown up shipping these one-off shipments. So I think that’s great to see.

Travis Mariea:

The rise of the 3PL is huge. The fact that they’re really good at creating a product and branding and they don’t want to be good at shipping logistics. I think that’s great for ecommerce in general of that segmentation of people getting really good at what they do.

Travis Mariea:

All around, it’s an exciting time to be in ecommerce and the shift that’s happening here because we’re doubling down and we’ve all been talking about it for several years. The pandemic put it in overdrive.

Travis Mariea:

And as Rick was saying, the relationship has changed. People are more focused on ecommerce, investors. The money that came into the ecommerce world in the last two years has been just unprecedented. So even more technology.

Travis Mariea:

Just with that, with all the money coming into our space, it’s just got me excited about what we’re going to see with the changing landscape too and as consumers start thinking about the supply issues and how that might change things too.

Travis Mariea:

I guess I’m just curious, Rick, what are you most excited about when it comes to this upcoming year? It feels like it’s going to be a different year because of all the money, because of this changing dynamic between consumers and merchants, whether it’s with Miva and maybe what you guys have planned or just ecommerce in general. I’m curious how you’re looking at this year and what gets you excited.

Rick Wilson:

That’s a great question. I don’t know if I’ve even yet thought about it in those terms. Right now, end of the year, I think a lot of us go through this, I’m trying to figure out what to focus on.

Rick Wilson:

So we have a million things we could focus on. And our stated objective is to be the best customer-centric mid-market and enterprise ecommerce platform. Right? So Shopify is great, but Shopify is not so hot about getting someone on the telephone. Amazon, same thing. Right? But they’re different specialties. Right?

Rick Wilson:

So I think for us, it’s really about making it easier for marketers. One of the trends we’ve seen change is that, a decade ago, everyone expected there to be a web development process or a technical person involved in content launch. Right?

Rick Wilson:

And frankly, you still need a little bit of that. But let’s say I’m a brand and I want to launch a new microsite, right? I used to have to go design the site, get a web developer, get all this stuff. And it was a more friction-filled process.

Rick Wilson:

And we see a future where, obviously, you’re not getting rid of web developers. Sometimes you’ll see companies raise money based on that, but that’s silly. But we see a world in which we’ve empowered marketers to run their business with minimum technical resources necessary because all the frameworks are in place.

Rick Wilson:

And I think that goes for everything from whether you’re selling something omnichannel, whether you’re launching a microsite, whether you’re launching a new language site and doing multicurrency, or whether you’re doing a B2B, D2C thing combined, it’s really allowing customers to do… Allowing for us, our customers, our merchants, to do things that they were unable to do historically.

Rick Wilson:

Maybe they were able to do it technologically, but it was either out of budget or out of scope. And you’re really trying to bring it down to make it accessible to the customers. A lot of stuff that we take for granted in ecommerce today was 10 years ago exclusive to Amazon, and I think that trend will continue. Right?

Rick Wilson:

I was talking to an analyst yesterday. They were brainstorming some whitepapers. They want to write about ecommerce next year. We were talking about fulfillment and reverse logistics.

Rick Wilson:

And he’s like, “What do you think about a paper focusing on reverse logistics?” And I said, “I think that’s awesome.” I said, “I don’t know how sexy it is so to speak.” I said, “But, God, there’s so much efficiency to be mined in reverse logistics.” Right?

Rick Wilson:

And there’s becoming consumer awareness. You’re seeing more and more articles about how if you go buy two items of clothing to see which one fits, that other item doesn’t necessarily go back and get on the shelf like we all imagine it. And I think customers are going to become more aware of the impacts of their choices.

Rick Wilson:

At the end of the day, it’s always about helping our customers run their businesses more efficiently.

Travis Mariea:

Yeah. It’s funny you bring up reverse logistics because that’s been on the top of my mind recently, lately. I just saw an article that $120 billion is going in returns this holiday season.

Rick Wilson:

I haven’t seen that. That’s wild, but not surprising.

Travis Mariea:

I’ve never seen that number. Someone posted it on LinkedIn. It was like an ABC News article. But $120 billion. And so I sent it to my buddy here who’s actually starting… It’s called halfback.com. He’s starting this reverse logistics marketplace, almost like this peer-to-peer marketplace.

Travis Mariea:

It’s super early-stage. He’s just got it going, just testing it out. But the idea that… He has experience of receiving in all the expenses of receiving in those returns and how most of it just goes in the trash. And this concept of why don’t you just post it to this marketplace? Give it a three-day window, almost like this daily deals kind of vibe.

Rick Wilson:

Yeah. Almost like Woot for returns.

Travis Mariea:

Yeah, exactly. And I was like, “That’s genius.” It sounds like an uphill battle logistically. A two-sided marketplace is tough, but if you get that formula figured out, I agree with you, man, the reverse logistics side of the market, man, is probably going to explode.

Travis Mariea:

Yeah. Because returns is, that’s one thing that… Amazon has basically made it where you need to figure out how to take a return. You need to make sure that it’s a good experience. And it’s just such a huge burden on the merchant in most cases.

Rick Wilson:

Yeah. Most merchants are not dialed in to handle it. And anytime you see something that’s hard to do, it’s a great opportunity for a business person to come help solve it.

Travis Mariea:

Yeah. Yeah, for sure.

Austin Rose:

[inaudible 00:38:53]. That’s a good point. Okay, cool. Well, we are actually coming up here on time. A lot of great conversations and content that we’re talking about. A lot of stuff stood out to me, honestly, Rick, that you’ve said that I haven’t even thought about.

Austin Rose:

This year is going to be crazy, obviously. Things are [inaudible 00:39:10] from these past couple. So really to just end us out here, give all listeners here a quick little plug of why they should be considering Miva.

Rick Wilson:

I think on the Miva side, if any of the stuff I talked about complexity rings true, if those are hard problems for you to solve, then Miva is a great solution to look at.

Rick Wilson:

And then the only other plug I would give is I have a podcast. Maybe we can have you guys back on that one. Just published a new book, 10 Principles for Entrepreneurs. So check that out at dragonproof.us.

Travis Mariea:

Awesome.

Austin Rose:

Cool. Awesome. Yeah. Definitely checking that out. Travis, any last thoughts?

Travis Mariea:

No. It was great having you on here, Rick. Man, honestly, there’s a lot of really good insights. We love the space you’re in. I actually learned a little bit more about Miva. We know a good bit, but the whole data management side, I wasn’t as aware. Awesome just to be a listener here. So thanks again for joining.

Rick Wilson:

Of course, guys. Thanks for having me. I really appreciate it.

Austin Rose:

Absolutely. Absolutely. I feel like we can have a couple more podcasts with you, Rick. We got a lot of good content to talk about. But thanks for jumping on.

Austin Rose:

Obviously, everybody that’s listening here, thanks for giving us a listen. If you haven’t already done so, if you’re on YouTube or Spotify, make sure to subscribe and give us a like. Rick, thanks again. Everybody else, tune in to the next episode. Appreciate you having us on.