How wholesale innovation helps small businesses be competitive with big distributors is an important education piece for business owners who value sustainability and future proofing their business.
The Consequences Of Not Changing
A few years ago, Jeffrey Atizado, co-founder of SMB Consultants spoke at the “Big Day In” for the University of Technology Sydney. It was an opportunity for Jeffrey to inspire the next generation of innovators and highlight the importance of innovation. In Jeffrey’s talk he shed light on businesses that ignored the importance of innovation at their peril.
Innovation is coming up with new ways to do things. It can be a change in processes or creating more effective products and ideas that provide new ways to solve problems. One of the main reasons we innovate is to save time and money. It's also key for businesses to regularly look at ways to develop and implement innovation to enable a competitive advantage.
What does the word Nokia bring to mind? Or Blockbuster?
In the talk, Jeffrey made mention of the delay of Nokia to innovate against the newcomers such as Apple and Android. Nokia’s ignorance of innovation cost them the mobile phone market share they had coveted for so long. Nokia is still around, albeit in a very different form. To survive, after losing the lion's share of the mobile phone market, they realised in the end they had to evolve and innovate.
So what does this mean for a wholesale business, especially a small wholesale business when competing against the large conglomerates?
As more and more businesses look to adopt new technologies, mostly these are cloud-based apps. A cloud-based application is simply an application that is accessed via the internet and all of the main processing and storage is carried out in the ‘cloud’ not on premise. Whilst the adage of ‘there’s an app for that’ rings true, not all apps are equal. They each have their nuances, strengths and weaknesses.
Wholesale software like Dear Systems, Cin7or Trade Gecko allow businesses of all sizes to be more efficient whilst remaining small and taking advantage of lower overheads.
Dear Systems are useful for inventory management and warehouse management.
Dear Systems was initially built in Australia for the Australian market and has now become known worldwide. It’s focus is around manufacturing, allowing the business to track raw material through to finished goods and provide production planning. With integrations to accounting platforms, eCommerce, fulfilment, forecasting and more, it is a package suited to Australian wholesalers.
Cin7 stands out in the market for integration with Shopify Plus and Xero.
Cin7 stands out in the market for its integrations with third parties and sales channels. If you have a retail storefront, wholesale channel, sell on eBay or Amazon and use a 3PL (third party logistic) then this could be the package for you. Again, it was initially built in New Zealand and continues to develop internationally.
On the surface, these platforms are both great for a wholesaler, however you need to look closer to determine which one is right for you and how you buy or sell. Small things mean a big difference when it comes to workflows.
Trade Gecko is a system we have historically implemented for businesses successfully. However, software does change and bigger systems acquire smaller systems to complement their platform or simply buy a customer base. In late 2020, Intuit in the USA acquired Trade Gecko and less than 2 years later they will be rolling it up into their bigger Quickbooks platform and not provide access to users outside of the USA. Whilst Trade Gecko was a great inventory solution for many, it is now no longer accessible and a migration to a new system is required. When necessary we are helping clients in this transition process.
So as a Wholesale Business Owner looking to update and improve your systems, which apps do you implement?
This is a common question we get asked and the simple answer is it depends on you and your business circumstances. As you may already know, when you implement a new system or process in your business, it can have a ripple effect and you will then notice how it impacts other business processes. It’s why we recommend having a 15 min chat with us for free, BEFORE you implement any apps. We are proudly app agnostic and specifically work to enable wholesale businesses to be more efficient by implementing better processes.
So how does SMB Consultants make life easier for Wholesale Businesses?
A great example of how we’ve used innovation for one of our clients is mission-driven camera and art accessories business, Urth.
SMB consultants teamed up with Cin7 to transform Urth’s business processes.
For the founders of Urth, formerly known as Gobe, a road trip from California to Patagonia was the impetus to create change — by giving more people the opportunity to experience nature for themselves.
A journey across the Americas can be a powerfully formative experience. From Mark Twain to Patagonia founder Yvon Chouinard to Che Guevara, history is full of people who’ve found their purpose on the road.
The products Urth sells and that support their mission are varied; Urth makes products, grouped together loosely into the categories “Art, Carry, and Camera,” that help their customers either spend more time in nature with their cameras, or engage with nature-inspired art. In addition to sourcing environmentally friendly products and materials, and creating products that can be used for a lifetime, all purchases from Urth are offset against the carbon emissions they create, as well as helping fund communities to plant trees.
“Urth creates products that support creativity,“ says co-founder Chris Gooley. ”We started off in the photography niche, but are expanding out into all different forms of art and artistic pursuits.“
Today, Chris Gooley continues as one of Urth’s directors, and his focus is on operations and finance. “It’s eight years later now, and things are going pretty well. We’re selling all over the world, and we’ve got a strong customer base.”
To get to this point, Urth needed strong systems on which they could build their vision. And before Cin7 and SMB Consultants, those foundations were looking a bit shaky.
“Cin7 is the way to go”
Urth was already a well-established ecommerce business by the time they found Cin7, and started working with SMB Consultants. Before then, they’d been running both their ecommerce and inventory through ecommerce platform Magento. While many product sellers (including Cin7 customers) find Magento an excellent platform for ecommerce, it’s not intended to work as a full-fledged inventory management system. This in itself was an important distinction. As businesses like Urth grow, they realise how important it is to evaluate the systems, platforms and processes they use and see if through innovation, they could do better based on their circumstances. Given that their products and mission were their expertise, they turned to experts in digital to help them evaluate and adapt their systems.
Many product sellers start out using spreadsheets, accounting software, or their ecommerce platform to manage inventory, and while this often works for small sales volumes, it can be a big impediment to operating efficiently at scale.
For Urth, this problem was compounded by the fact they were already running inventory out of Fulfillment By Amazon – and Magento and Amazon weren’t talking.
“We were running inventory with Magento, so there were a lot of manual updates,” Chris remembers. “Magento could really only deal with recovering inventory by unit sold. It couldn’t do inbound shipment updates, adjust for stock variances, et cetera. We’d have to upload our website orders to the fulfillment centers manually. It was a pretty inefficient system, to say the least.”
This, in addition to being incredibly time-consuming, led to a host of further issues, the biggest of which was customers being able to place orders for items that were actually out of stock. It also limited Urth’s capacity for further growth, with expansion to new markets or sales channels made all but impossible.
“It caused enormous headaches, and a poor customer experience,” Chris says. Fixing mis-ships took “a lot of back and forth emails, offering different products as replacements, and dealing with – well, not necessarily irate, but definitely upset customers. And manually uploading our orders to the fulfillment centers was always a nightmare, and very time-consuming. And our opportunity for expansion was limited as well. It had a pretty stifling effect.“
In 2020, the Urth team made a decision - they’d move off Magento and on to Shopify. To do this, they worked with a web development agency called Process Creative, who suggested they find an inventory management system that integrated natively with Shopify and Amazon FBA – and they recommended SMB Consultants to help them do it.
“They said, look, if you’re going to make the Shopify website work efficiently and you want to make room for expansion, then Cin7 is the way to go,” Chris says. “So we did our own research, and came to the same conclusion. And we’re glad that we also followed their advice of getting SMB Consultants to talk us through that process and set it all up.”
If You Want To Change The World, You Need To Plan It
When SMB Consultants were brought in to bring Cin7 to Urth, they found themselves faced with a formidable set of requirements. For international tax and compliance reasons, they would need to implement two instances of Cin7 (one to take care of APAC and US sales, and another for the UK and Europe) as well as multiple sales channels and fulfillment centers.
Together, SMB Consultants and Urth worked to identify two key objectives for the implementation: an accurate inventory valuation, and understanding of the cost of goods sold (COGS.) With that baseline, automations could be put in place to massively increase the business’ efficiency, as well as ease of management.
“Urth was already a successful, growing business, so the main thing for us was working together with a good client, to come up with a good solution that everyone is happy with,” says Jeffrey Atizado, CEO and co-founder of SMB Consultants.
With key inventory data safe in Cin7 and syncing seamlessly between Urth’s Shopify stores and Xero accounts, the task for Deepak Stevens, SMB Consultants’ resident Cin7 expert, was to implement Cin7’s powerful automations, taking away the time spent on admin work.
“Our scope was to set Urth up so they could focus more on the business – on sales, customer service, and all that good stuff,” Deepak says. “The really cool thing for us at SMB Consultants, is that this was probably the first account where we utilized the full potential of Cin7’s automation functionality.”
Wholesale Innovation is helping small businesses compete with the big distributors and what the SMB Consultants team love is the opportunity to bring it to clients every single day to help them strengthen their foundation so they can scale, achieving their business goals in the process.
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