Taking On International Fulfilment with ShipBob

Phillip: [00:00:14] Hello and welcome to Future Commerce, the podcast about the next generation of commerce. I'm Phillip, and here hot off a Series E, clocking in at two hundred million dollars, it's Mr. Casey Armstrong, the CMO of Shipbob. Welcome to Future Commerce for the first time.

Casey: [00:02:08] Yes, thank you. It's great to see you here.

Phillip: [00:02:11] Great to see you, too. And wow, we've been partnered up for a few months and we've been working together, Shipbob and Future Commerce, and hopefully building something really lasting together. I know that you've helped sponsor a bunch of content that we've put together recently, but that's not why you're here today. You're here because I pinged you on Twitter and said, "Come talk about the raise," and tell us a little bit about what you guys are doing going into this new infusion of capital.

Casey: [00:02:40] Perfect. Where should I start?

Phillip: [00:02:42] What are you going to do with it?

Casey: [00:02:43] What are we going to do with it?

Phillip: [00:02:45] You're flush with cash.

Casey: [00:02:46] I mean, the overarching theme... I'd say there's two overarching themes, and then I can get into some specifics. It's really continuing to invest heavily in product and operations. And we really view them as the same. What's been interesting with Shipbob versus, let's say pure software, is with the operational element it's like this a whole other dimension that you need to take into consideration. It's not just a pure software problem, which is fun to solve and attack. And that's why there is such an opportunity for our customers and for us. And the other overarching theme is really fast and affordable and reliable shipping. That's why people come to us in the first place. And that's what we need to provide for brands of all sizes, whether you're just getting started or you're doing one hundred million plus in revenue, get that Amazon level fulfillment experience. And so for us, a handful of areas that we're really focusing on is international. So we just recently launched our first fulfillment center in Australia. So that will give us four locations overseas. So Canada, Ireland, the UK, and Australia. And so we'll be expanding very quickly internationally. In Q3 we'll add probably at least two more international locations and maybe a third in Q4. It's still TBD. Another area is really omni, and I'm using that term somewhat loosely. So it's not just platforms and channels, but really our integrations across the board. So we have our own app store where we integrate with solutions across the board. I'm happy to dive into that. It's an area that I'm rather passionate about and then another big area is B2B. And so the company is really founded on direct consumer. But we've always had B2B components, whether it's B2B or B2B2C from a fulfillment standpoint. But it's interesting to see these customers evolve so much earlier in their lifecycle and get into retail or get into different omnichannel solutions that look like B2B so much sooner. And so we know that's a must have for our customers across the board.

Phillip: [00:04:56]  [00:04:56]So it's not just growing in capabilities or sort of reaching what I think is sort of been not just meeting this need of this underserved market of more operations or more logistics infrastructure capability that's lighting up every day across North America. It's also like channel development. It's going outside of just the core B2C, eCommerce, consumer and the logistics operations that serve that. [00:05:28]

Casey: [00:05:28] Exactly. That's one of the most enjoyable parts of working at these fast growing eCommerce enablement or infrastructure companies is for a long time it's, "OK. We're going to do one thing really well." Let's say that's direct to consumer fulfillment. And that's out of one facility. Then that's added to. And next thing you know, you're at four or five facilities and it's in North America and things are going well. But you need to start branching off into all these other areas very quickly. And so that gets into omni. That gets in the B2B. That gets into international. There's a lot of other stuff that's in our roadmap that we'll be launching this year and next year that we'll be pushing out shortly. But if you keep adding these kind of other business units within the organization, like for us, we have a whole another business unit that's focused solely on these customers that are just getting started. And so how do we help you if you're at zero or let's say, a quarter million in revenue, really graduate to that next level? What's that look like? How can you get onboarded as easy as you would like a pure software solution? And so just continuing to open up different channels and business units to support the overall mission of the company.

Phillip: [00:06:43] There's some confusion because there's so many software tech SaaS platforms in the space. There's sort of this confusion of like where in the ecosystem. And by the way, when I say confusion, I mean the confusion is mine. {laughter} Where in the ecosystem, some folks with "ship" in their name are trying to go direct to the direct to consumer brand. And they are like a rate calculation solution. And then there's others who are trying to enable the actual warehouse ops and warehouse management piece. They also have "ship" in their name. I think no matter where you sit in the spectrum, there is the opportunity in the marketplace to try to be the other thing to try to become more ubiquitous and to try to get a larger piece of the pie, because there is so much, I think, white space here for you to grab up. Why B2B? If there's so many other places that need solving and along the customer journey and CX of logistics, it seems like going to B2B seems like a different kind of challenge to solve.

Casey: [00:07:55] Yeah. So I'll get to B2B in a second. So I'm glad you called out there's a "ship asterisk," like "ship" fill in the blank, you can pick whatever you want, like go to GoDaddy and try to buy something after the word ship and they're probably all taken. So anyways at Shipbob we are a full service fulfillment platform. And so you would ship us your inventory and we will sell things across the world. Then there are companies like, let's say Shippo, which is a great solution to print labels if you're fulfilling yourself or they're actually a very close partner of ours where we leverage their software and technology and partnerships as a shipping API component to make sure that we are always getting the best rates. And so we partner with them closely on that. And so, again, you can use them standalone or a company like Shipbob will use them. And then there are other solutions that are, like you mentioned, powering what's happening in the fulfillment centers. And so those are called warehouse management system or WMS. Those again, those are much needed if you're going to run a strong fulfillment center or warehouse that standalone or maybe you have a couple of them. We built our own WMS, and so that's fully that's one hundred percent Shipbob. But again, there's another area for that. And so there are a lot of different shipping solutions and it's tough. I totally understand for merchant's who are saying like, "What the heck is the difference between all of this?" But I'm glad you brought that up so I could just kind of explain where we sit in the space and why there is such a need for all these other solutions. And then with B2B... You're right. [00:09:28] We could just focus on DTC until the end of time, but what so many of these customers, these merchants, these sellers want is they want one solution. They want one stop.  [00:09:39]

Phillip: [00:09:39] Exactly.

Casey: [00:09:39] And they want that for a lot of reasons. They just want to drop in their inventory and say it's just as easy as you sign up for Shopify, you don't want to use a different Shopify for people in Australia to be able to see your content or people in the UK or people in North America.

Phillip: [00:09:57] Right.

Casey: [00:09:57] You just want to like, say, "Cool, this is my store," and allow people to view and transact. And so we want the same to be here. And so whether that be international or that be B2B, and B2B is such a, I don't know if vague is the right word, but it's a vague term because it's like there's you scratch slightly below the surface and like there's so much to unpack. And I mentioned earlier, B2B and B2B2C, and so that means like let's say you sell in Target. And so we could ship your goods to Target or maybe to a Target distribution center and they distribute it to multiple locations. Or there's Target.com. And so you place that order and Target.com or Walmart.com and then that order would come from Shipbob. And so that's more B2B2C because we're shipping a single order to the end consumer, not in bulk to a Walmart.

Phillip: [00:10:48] There is just so many... It's much the same problem that you have when you say eCommerce, because eCommerce means a lot of things. Right? And there's various flavors of it transacting in online. So, yeah, there's these sort of nebulous terms. And the thing that I keep coming back to is this growing concern in logistics of growing brands who are having to find ways to move out of their bedroom. We're seeing explosive growth for a lot of brands in the space, depending on when you're listening to this, that could be imperiled by things like, I don't know, IDFA and whatever else is the challenge at the moment. But you have these companies that are growing rapidly. They're looking to take fulfillment and take it to the next level. And there seems to be some other resource constraint in the ecosystem around commercial real estate development. And just plain old, just like where do I even go? Forget my international expansion. But I have to take these ops out of house and have to send it somewhere anyway. And I see a lot of that sort of coming online. There was a story in the Palm Beach Post here where I live around this sort of laggard CRE work that's happening. A lot of it's coming online in the next six months. And now we could be facing a surplus of eCommerce logistics in a space that typically isn't where you put eCommerce inventory in South Florida. Right? So these are all interesting. These are all interesting conversations. And I feel like you probably have some insight into that. And how much of that are you touching with these expansion plans? I mean, outside of international.

Casey: [00:12:42] Well, South Florida is an interesting location because out of all the major metropolitan areas, you can get two day ground coverage from just a handful of locations relatively easily. Like a lot of our customers will split between, let's say, Southern California, the Northeast and let's say Illinois or Texas, and they can almost get ninety five percent plus two day coverage ground, except the biggest gap or miss is in southern Florida. It's just tough to get to. And so I can't speak specifically for the real estate market in southern Miami or southern Florida. And so we'll see what happens there. Overall, the markets just been insanely hot for industrial. And we'll see if there's like an overcorrection. Amazon wasn't even able to rent or buy as much as they wanted last year because there was so much competition. It will be interesting to watch like the Prologis earnings calls and see what they're saying as well. They are one of, if not the biggest player in the space for industrial real estate. So it's definitely a fascinating space to be in. I have some friends here in Southern California that have bought some stuff out that was pretty east. And they were getting laughed at for a couple of years. And now they're definitely the ones holding the cards and laughing at everybody else. Just because the demand is so high, and there's very, very little supply from raw dirt to the actual buildings. Something you mentioned also though with competition with some of these brands, and as they go, they sell B2B and sell elsewhere... As kind of a bit of a tangent, but I find that I love to see these companies, like we mentioned, Shopify or let's say, Big Commerce, allowing people to sell much easier online or Shipbob of trying to make it much easier to just grow a business with a few people because you outsource all of your fulfillment, which is very time intensive. Now there's so many more brands. And so the competition is off the charts there as well. And then you throw in, you look at the cost of Facebook and some of the changes, like what's happening with like Facebook and Apple, and so these brands are forced to get very creative and innovative. And so that's one of the things I love most about the space, is how these brands just adapt really quickly. And just different from software is popping up to allow them to cross-sell to just different partnerships. Again, whether it works well or not, people are definitely trying to stuff like I saw CROSSNET and Black Wolf, they launched a partnership the other day because just there's a strong overlap with, like, their ideal customers. That kind of stuff we're going to continue to see pop up more and more during the summer. I know that there is the name, image, likeness or NIL stuff with the NCAA and the athletes there. And there's just a lot of brands that are doing some interesting stuff there. I think that's kind of a slippery slope. So we'll see what plays out between NIL and NCAA, but just the innovation and how creative these entrepreneurs are, because it's really sink or swim. They've got all their money and everything invested and time and reputation invested in these companies. And so, again, it's going to be an interesting Q3 and of course, Q4. Q4 is always a wild ride.

Phillip: [00:15:56] {laughter} That's the one. Thank you for, I think you corrected me there. I said commercial real estate. It's industrial. We have an interesting, speaking of Black Wolf, Sam, I believe is a frequent visitor to South Florida and another friend of the show helps out over at Black Wolf, a guy, Jake, from Tillinger is a part of our community down here. And there's a lot of conversation there, too, around sort of owning the experience and sort of these small entrepreneurs who think that part of the experience and part of their hustle really is that their personal brand is wrapped up in the actual front end and CX piece. Part of my day job is understanding the end to end of CX and that a lot of loyalty hinges on your ability to deliver a product at the end of the day. Very few people will buy from you again if it takes three weeks to get a product to your door, depending on what it is you're selling anyway. And so, you know, a lot of that is I think there's a lot of this concept of as you grow and you sort of graduate, part of owning the experience is coming to an inflection point. When I would say when you're growing out of the two fifty million band is how much do you then decide to bring back in-house or when do you start to decide that part of owning the experience requires you to be owning the operations of delivery? Do you think that that is a relevant conversation at all to be having yet? Or do brands actually graduate like that anymore? Because I think a lot of that just you see a lot of this step getting skipped via M&A into big, large CPGs, who probably have that solved to some degree.

Casey: [00:17:55] There are companies that graduate or that have very edge case needs. You know, [00:18:03] one of our goals is to continue to build the solution that, again, works for people who are just getting started that can scale up like I mentioned with international B2B, so you don't have to look elsewhere. [00:18:13] You know, there's I don't know if it was Allbirds or Adams that would send you three pairs and you could return two.

Phillip: [00:18:24] Yeah, Adams. Yeah.

Casey: [00:18:25] That is a logistical nightmare. Or maybe that's their opportunity. And so that's something that I know that they built in house. You did mention things like customization. So I mentioned that earlier. I mean, that's another huge focus area for us is because that's necessary. The cliche, what gets close to a hundred percent open rate as anything? It's actually people opening the package that they bought from you. And so you want to have that level of customization you're looking for, whether you're doing yourself or outsourcing it, it can be more expensive. And so you need to be thoughtful there. A brand that I love and does a great job of the unboxing experience is Lovevery. But they also charge a price point that allows them to offer that level of customization. And so if you're selling, let's say whatever, twenty nine dollar sunscreen or like a lower average order value item or items, you might not have that luxury. But there's still ways you could incorporate maybe some level of customization to continue to build your brand.

Phillip: [00:19:39] There's a lot of truisms that I hear, or the sort of the same tactical advice over and over that you get before the buy box. Right? There's like a conversion rate optimization. How many people are not talking about the things that you sort of test for, for customer experience and uplift for everything that happens after the buy box? Is that something that you guys are thinking about and focused on and helping brands improve to make primary and secondary packaging experiences better? And how do you become, because that's usually an ops team role, right? It's not a CX demand general. So are there things to be learned from demand gen side that happened in ops that can help drive loyalty?

Casey: [00:20:29] Definitely. So it is Ship Scout... They're an interesting app out there which offers shipping A/B testing and that's just an example of maybe test... To change your operations, if you're doing it yourself, is often much harder than, let's say, A/B testing something from like a CX perspective or UX perspective on the website so that could be an option. Something you mentioned earlier is around the buy box and people will... I think this is pretty fascinating, its core to just really the catalyst of Shipbob is people would be able to check out like Amazon style on their website, whether it be through PayPal or Apple Pay, One Click or Shop Pay. And what Stripe's been able to roll out there and just get these really fast checkout experiences, both desktop and mobile, of course. But then they would get this Amazon level experience on the website. And then, like you said, it would take, whatever, two weeks to get there. And that's just a very disjointed experience. And so, again, I think that there are ways you can test that higher up in the funnel on the demand gen side to see is this... If we offer these better solutions, can we improve our click through rate, our conversion rates, and then we can invest in there? Because it's so easy for me to say, of course, you should offer a free two day shipping because both myself and your customers are the biggest winners there. But that costs money. And so, you know, you need to make sure where is the right trade off on that front.

Phillip: [00:22:08] It's so funny because, you know, we had Jack DeFuria from Parade on the show back in October, and he said a few things that I feel like I've now cited him three or four shows in a row. So he wins some kind of an award.

Casey: [00:22:24] Yeah, he does.

Phillip: [00:22:26] They said a couple of things that really stood out to me. One is they see themselves like more of a fabric innovation platform than anything else, much more akin to, say, like Lululemon. And a lot of what they do is sort of just in time manufacturing. It's what allows them to do like this really like mind blowing colorways style silhouette, like just this incredible diversity of the kind of products. I mean, their SKU count is insane if you were to just add it all up, not offering everything all at one time. But having bought from them a few times myself because I prefer a high rise thong like any... I'm sure you do too. But having ordered from them a few times, the shipping times are quite long. My question to him was, why? Well it's shipping direct from China. Like it's being manufactured. It's coming direct, right? It's like getting to my door via, you know, another country. Is that, you know, not to get you to weigh in on their strategy so much. But at a certain price point, I think you can forgive that, right? Seven, eight, nine dollars a pair. Like it's OK I think probably. Is that becoming normalized? Do you think we're relaxing our expectations around price point and do our expectations sort of scale up linearly or exponentially the more that we pay? And maybe there's a couple of questions hidden in there, but I don't want to overload you. I think that is an interesting logistics innovation. But I think it toys with the expectation that a customer should get something in a few days time, and that's just not the case.

Casey: [00:24:05] I haven't seen any swing towards longer shipping speeds. Again, they have a different business, like you mentioned, they have a an extremely large catalog SKU wise, which adds so much complexity to a business. Again, that also gives them an opportunity. And they're doing rather well themselves. Shipping direct from China, I mean, that's not innovation. That's really like how drop shipping's been. I used to hear that a lot more a couple of years ago and been seeing a lot of brands do that less and less. And so, again, they have a large catalog and they're doing something right. And so hats off to them. With just in time, I'm not going to get into the pros and cons of that too in depth, but because it's necessary for you to run your cash flow. But we're seeing a lot of the struggles of that right now where so many merchants can't even sell right now or sell their full catalog because stuff is stuck overseas. And that's because of raw material shortages and increases in prices there. That's because there's a boat shortage. And also all the ports are clogged internationally and domestically, especially in Southern California. And so just to even get stuff landed in the US and to your house or to your fulfillment center is tough. And so, just like everything in business, you have to weigh the pros and cons. Does it make sense for them to buy everything in advance and ship it over here and offer much better shipping and fulfillment experience while taking a massive hit from a cashflow perspective and maybe sitting on a lot of dead inventory at the end of the day versus saying, hey, we will just ship from China, and if if there's a delay, there's a delay? Again, that's something that every company needs to balance. It's just there are risks and rewards, just like with everything. And that's something I did want to mention, too, on the quest you mentioned earlier on, how do you balance, like, demand gen and ops? There's actually I was talking to a customer of ours about a month ago and something that they said I thought was really interesting... This shows kind of like the evolution in these brands. Actually, I've been seeing... A pretty interesting shift I've seen lately is a lot of these brands, their first hires won't be a marketer. It's more like an ops person to start because they know the importance of that. And with marketing a lot of these Founders, that's what they're good at. Or they'll use the outsource, use a company like MarketerHire or something like that to scale.

Phillip: [00:26:39] Right.

Casey: [00:26:40] But what this woman said that was pretty fascinating, was how they started modifying their manufacturing process and the size and the materials that they'd use to reduce the size and the weights to make sure that they fit within different dimensional weight thresholds, because you're fulfillment costs are more or less based off of dimensional weight and you're shipping zones. And so you can solve the shipping zones by distributing your inventory. But how do you modify the dimensional weight? And so, again, she started modifying how they created the product so they can get a lower dimensional weight while still selling more or less the same item. And then that either put more money into her pocket at the bottom line, she could reduce her costs at the top or the purchase price for the customers, which will improve her conversion rate, or she could use those cost savings to provide a better shipping experience. And so it just gave her a lot of optionality, which is great. And again, this is something I think a lot of these eCom sellers will eventually evolve to, which is, "OK, cool. I've hacked Facebook," or whatever channel they're trying to. Where is their opportunity? And so I thought is pretty creative on her part.

Phillip: [00:31:39] I think probably a skill that is one that's cultivated by working in the business and not necessarily having the... It's hard to acquire that skill through like a guru, of course, right? Where this is a thing that we're all sort of challenged with is as long as I've been doing eCommerce, which is since shoot 2003? Sooner, but let's just call it 2003 because I'm old now, but for all the time that I've been in it, and I spent 10 years working for direct to consumer startups, the world has changed so very much. We're still in its infancy really. I mean, it's near one hundred percent employment, to get anyone with any sort of skills that you sort of have to recruit away, and marketing skill sets are hard enough to hire for. Operations, I feel like is that much higher of a bar. And I feel like there's less and less of a sense. And maybe this speaks to sort of the some of the startup names you dropped earlier around Stripe in some others. Is that really it's hard to suss out what you know, what an operator's capabilities are and what they could do specifically with your brand unless they have pedigree at a known name or a brand that's like early stage DTC, like Bonobos and Warby Parker. That's why you see a lot of alumni there going on to do things of their own. How do we solve that? I mean, is there a future where Shipbob can credentials operations professionals and help? How do we scale that and meet that problem, which I feel like is one that we're all going to have to solve pretty soon?

Casey: [00:33:28] I agree. It's something that we are... Well, it's something we've already been investing in for a while, where we have success managers that are employed by Shipbob, and they work with some of our largest merchants and we don't charge them anything for that. And so they are getting access to that. How do we expand that beyond Shipbob? That's again, that's something that we're looking into. And we'll probably launch something in Q4 at the latest around that because with marketers, well one, they talk about themselves a lot more and it's easier. And so I don't know. I feel like sometimes it's easier to find who they are. Also, I think it's something easier to understand. And as a Founder, you're like, OK, can you improve my return on ad spend by X or give me some examples of how you've been able to scale certain channels or market across different channels, and it's just more of like a known entity. And again, it's maybe somewhat-ish easier to solve and people talk about a lot more and it's often something where you can drive impact very quickly. Whereas again, it's going to take a while, but we will see this shift where people say, OK, I need to improve my bottom line. If that's not a marketing problem right now, what it is is actually like a logistics or operations problem. And so how can I bring in somebody that can help me understand how we should manufacture, how we should manage our just in time or what we order and how should we distribute it? And who should we use for direct consumer? Or who should we use for B2B? Or who should use for both? And which channels should we sell through? And we are seeing these people as direct to consumer and just eCommerce continues to evolve that have worked at a lot of companies that have scaled well. This other woman I was talking to recently, she she just got poached, which I was pretty surprised, to now the third eCommerce brands she's worked for. And she just understands operations, especially in DTC, extremely well. And she was the person I alluded to earlier. She was their first hire. And it was these two experienced women who launched the brand. And they knew that that was going to be just paramount to their success. And so they went out and tried to find the best person they could for that role. And I think we're just going to see more of that. And again, it's going to be tough. People make some of the bad hires just like they will for any role.

Phillip: [00:35:52] Yup.

Casey: [00:35:53] But people will start saying, OK, well, it's not just top of funnel. How can I prove the throughput and the customer experience? And that brings people back again. And so what does that look like in the next year? I don't know, but we're definitely going to see, I think, a lot more discussion over there.

Phillip: [00:36:14] Want to get your take on something. You know, we're seeing as brands grow up and their needs around fulfillment grow, I think it's pretty safe to say, like you mentioned before, getting to two day, to cover most of your customers with two day requires multi source inventory. It requires fulfilling from multiple places, but it seems like there isn't an e-commerce platform that I'm aware of that sort of supports that as a default use case. It's usually some additional level of effort to go to support that. And I might be speaking from some ignorance here, but it seems to be a challenge that we're constantly having to overcome. Magento purports to do something out of the box. Shopify has a solution. Neither of those are ones that we actually reach for over at Rightpoint where I spend my days toiling away. So I'm curious what your take is on do eCommerce platforms actually serve the needs of these growing businesses who actually have some complexity around logistics? And if not, is that why Shipbob exists? There's just too much variability.

Casey: [00:37:38] What do you guys use?

Phillip: [00:37:38] As far as what?

Casey: [00:37:39] For handling multi location inventory?

Phillip: [00:37:44] It's such an interesting question. It can be incredibly custom depending on the need. So if not to name drop a bunch of clients, but, you know, L'Oreal and Nestlé and Rite Aid all have very different use cases for the way that they employ and for their sub brands. Right? So the way that they employ... Rite Aid has BOPIS. And that's its own challenge to meet. There's POS integration. There's in car delivery, there's delivery to home. And so they have a very complex way of realizing inventory, both at the DC level and in the store level. Exposing all of that to the end customer is kind of a magic trick. Like we make it look easy and it's insanely complex. There's nothing out of the box that provides for that experience. And then but the easiest use case would be, OK, I'm you know, I fulfill out of two DCs. We work for a subsidiary of Nestlé, Garden of Life, and they have a few DCs on hand that they'll fulfill out of. Even then there's rules. Some stuff ships cold, some stuff ships, you know, depending on a threshold. So I'm sorry, I'm giving you a whole... You're now my therapist. It doesn't seem that out of the box any eCommerce platform or like an experience platform really provides for the thing that you would assume is now like the growing use case for growing brands. It seems to be a challenge.

Casey: [00:39:21] Agree. I mean, there's I mean, that's like I'd say the beauty of our industry, at least on the software perspective, is that's what opens up so much opportunity for complementary solutions. But it also makes it a pain at times because now you're managing multiple solutions. Hopefully they're all tying it together well so that you have a unified data set. I mean, you look at there's, of course, NetSuite. There's a bunch of players like, I'd say lower in the space. There's Skubana who was acquired, there's Stitch Labs who was acquired, there's Brightpearl, there's Since Seven, who's actually going the opposite direction of getting acquired. Well actually I don't know if they are positioning for or not for that. But they've acquired a handful of companies to expand the solutions that they offer. And then there's people like us that we integrate with all of them. But also we want to make it so you have like, you really only need one solution to tie into your platform. And it's just, I mean, you touched on it briefly, but it highlights the complexity with eCommerce across the board. There's so many edge cases and these brands are always trying to like, not purposely, but like break the way that things are done so that they have some level of competitive advantage. So whether it be you need things that have temp control or items that are frozen or buy online, pick up on store, just some things have certain batteries or...

Phillip: [00:40:57] Yep.

Casey: [00:40:58] There's hazmat. There's even like with all the people don't realize, even with all the hand sanitizers, like some of those fell into just different hazmat classifications. And again [00:41:10] with B2B, are you selling through Walmart? Or are you selling through... Like we had a customer that we were talking to for a bit, and they sold across like a thousand different golf pro shops. And like those are both called B2B, but those are wildly different. And so because et's say with Walmart, you ship to one or two distribution centers. With all of these pro shops, maybe you're sending it to all thousand pro shops. That's a much different ask. And so but again, that's the opportunity for all these solutions to offer something for these brands to handle that, because it's again, I don't see these brands getting less sophisticated. [00:41:53]

Phillip: [00:41:54] I feel like that's where sort of platforms hit this sort of this bell curve of whatever the product team was working on five years ago, like is what is available now. And my concern is that, at least in our industry, the thing that is currently being built is extra platform. It happens outside of what the core capability of the platform is. If you were building for what the platform is capable of, you're building for the experience of a few years ago. You're not building for the experience of today,

Casey: [00:42:27] I argue against that. Well, I know how we approach the Shipbob and we talk to our customers a lot and we are trying to place bets and things we know that are necessary today. But also, how can we carve out some time so we can make some bets for the future? And again, you're not always right. That's part of our job. But then also on the platform side, you look at a company like Big Commerce where they've stayed very focused on it sounds very buzzword, but I think it's going to put them in a good position, which is open SaaS. And so how can they continue to invest? And similar to what we're doing and how can they invest so heavily in their API that all these other solutions that, like you said, are maybe building towards building for the future... Because Big Commerce, just like Shopify and others, they can't build for the future across every single use case. What they can do is they can and continue to invest in deepening and expanding all the different end points that they have for all of their data sets or data points. And so that you can leverage that again in a unified way across all these different solutions. And so whatever there is like the next like Skubana or Brightpearl or there is the next fill in the blank solution, whatever it may be, and you can still use that data in whoever is actually seeing the future like you stated.

Phillip: [00:43:45] Yeah, that's my concern and sort of the shorthand there is that when you're in eCommerce, you're typically, like you have to build. And that's why I feel like no and low code solutions cover 80 percent. It's yeah. They cover the 80/20. They cover 80 percent. But the other 20 percent is where you're going to spend 80 percent of your time is trying to architect for the edge cases that aren't covered by what broad platforms are. And there are so many more of them. That's the other concern I have, too. I don't know what your take is here, but because they require so many point solutions nowadays. And you mentioned a few offhand, in a given store there's 20, 30 integrations, depending on how you want to count it. That becomes margin erosive over time too, and operating. It's not just technical complexity or operational complexity. It's also like margin complexity. It's in effect some sort of a tax. And I don't know how I don't see that getting any easier over time. Anyway, just waxing poetic, I guess.

Casey: [00:45:08] I agree. It is like the SaaS tax and the app tax, like what is it costing you for all this? But maybe at times it's also to view whatever glass half full. It's this forcing mechanism where you're like, wait, I'm spending three grand a month in all these, like supporting apps,? What do I really need?

Phillip: [00:45:32] That's right.

Casey: [00:45:33] And so going through and cleaning it up because you can't chase every shiny penny and because you know that guy or girl on Twitter said, "Hey, this app has changed my life." Like, do you really need it or should you continue to focus on what's actually driving your sales? And so I am with you. I don't know how that will play out because people will continue to build some very interesting solutions for things people like others haven't thought of. But you can't have 50 apps running your store because then you get into the situation like so many of us that run websites on WordPress, where now you have to update all these apps. Now, half of them don't talk to each other and one of them was built somewhat maliciously. And so now they start like whatever, doing weird stuff on your website. And so, again, we'll see what happens there, because WordPress hasn't been able to fix that either. Again, they're a different business than a lot of the platforms because they're more in the open source-ish vein. But so I don't know. I guess we don't have history to look at.

Phillip: [00:46:34] No. But I do think well, history does sort of rhyme a little bit. There's likely a coming again and not to again, we're called Future Commerce. So I'm thinking about what's next. In my mind when you see Shopify open its developer program to sort of subsidize the first million in revenue for which we've written quite a bit about. But it was an announcement that was made at Shopify Unite around Rev Share for the first million for all of its app developers. They're going to allow you to operate up to the first million with no Shopify tax, basically like they're not taking money away from you, which I think to be 20 percent. This is great, right? At the same time, I think it also is a different way of a company like Shopify or any platform to subsidize research and development, because all platforms, it's sort of a law, all platforms eventually compete with their partner ecosystem. When you have a critical mass of folks looking for a specific solution, at some point someone rightfully asks the question, "Why can't I just do subscriptions in Shopify? Why do I have to have four apps that manage that? Why do I have to have an app that manages Churn? Why do I have to have an app that manages the payment? And why do I have to have one that helps me with Dunning?" It does become complex in its own right where the platform should actually have a unified, opinionated solution for this emergent use case that everybody seems to want. So, yeah, there's an agglomeration that I think that happens over time as well, whether in feature set or in actual M&A where they go out or a partnership where Shopify is knighted Affirm in the BNPL space to say, hey, we're going to choose a player here.

Casey: [00:48:33] I think the partnership thing you call that with Affirm is maybe something more to keep an eye on, because I agree, like, it makes sense. And sometimes, especially from the outside, it might be like, why don't they just build X in-house? I think Shopify, like Salesforce, has done a great job of fostering this app ecosystem. And I'd say this past Unite more so than any other where they really did put their money, where their mouth is. And we're like, "We want to open this up and allow more people to build in." And then you're right, it's not purely altruistic like it is already R&D for them. It helps make their platform stickier. But also, if a company is focused solely on Churn or focused solely on subscription or focused solely like with us, on fulfillment, from the CEO on down, that's all the company is thinking about. And so you think of, like you mentioned earlier, building for the future, that's where people are looking for that innovation and trying to get ahead where like one platform can't think about the future everywhere. And there's only so many developers you can have at one company. I mean, Google's done a good job of hiring a lot, but that's for another conversation. And so you can't solve and see everything. And so that's where this is just opening up the platform, like Shopify and Big Commerce have done or these partnership opportunities. I thought Affirm eventually what they did with Shopify got a little bit more press, but that was pretty interesting where they were kind of donned the winner in the space for that. But there are still others, and even Apple threw their hat in the ring last week would buy now pay later.

Phillip: [00:50:13] Yeah.

Casey: [00:50:13] And so again, these companies aren't just going to roll over when these big announcements are made. So and that's what will continue to push the innovation.

Phillip: [00:50:23] This is my roundabout way of getting around to trying to talk about Shopify fulfillment and how you see that panning out in space.

Casey: [00:50:33] So that's a question? I don't know, we'll see. I mean, we work with thousands of Shopify brands where they're only global Shopify Plus fulfillment partner. We work very closely with them. We met with them last week. And so I know that we're going to continue to invest heavily in our partnership and integration with Shopify, as we do with others. And we're long on the space like like they are. And so what that means with their fulfillment networks, TBD. But, you know, it's not a pure software problem either. And so you can't just onboard a million companies overnight. It takes a bit of time. And so so we'll see. But right now, yeah, things are going well. We're working very closely with them.

Phillip: [00:51:23] Nice. Comms training coming in handy. {laughter}

Casey: [00:51:26] Well it's the truth also. I mean, again, you can see where we've invested and we are number one up for fulfillment and their only Shopify Plus certified partner. And so there we go. Shipbob.com. Comms training.

Phillip: [00:51:42] I love it. What haven't we talked about that we should be talking about? What's happening for holiday? And I'll give you the last word here. What's happening for holiday? I'm sure you see more than anyone, you know, sort of the leading indicators based on the way people are stocking up and planning and resourcing. So what can we expect?

Casey: [00:52:07] Stock up. I mean, again, you've got to balance your cash flow, but from talking to some of our partners, like Freightos and others, I don't see these port congestion issues and supply chain issues throughout the world easing up this year. And they have already started having some I forget what it's called exactly, but kind of like the child stimulus checks hitting people's banks last week. And hopefully those get spent on the right things. But there's going to be... And also just different variants of COVID. And just in general, regardless of all that, not that we won't rehash COVID. There's eCommerce is going to continue to grow. We'll have like the step function jump like it did last year. But just prepare for a big Q4 like always. And also get creative on how you can get ahead of it, because Walmart, Target, others announced that they're not going to be open for I think it's either... I don't think they're going to be open on Thanksgiving. And so just as these brands get creative and move, it went from Black Friday to Black Friday and Cyber Monday. Then there was Cyber five. So it's like a five day sprint. It's like now Q4. Q4 is the crazy sprint. And so I'd start getting prepared earlier and ignore like the millions of blog posts on what to do. Just you know what to do with your business.

Phillip: [00:53:29] Yeah, definitely more so than anything I could possibly write on at FutureCommerce.fm. Casey. You're a mench. This is great. Thank you so much.

Casey: [00:53:40] Thank you very much for having me.

Phillip: [00:53:41] And thank you for listening. Hey, you know where you can find other great content. You can find it at Future Commerce. Go sign up and subscribe, so you never miss another great interview like this one I just had with Casey. I'm going to pat myself on the back. That was a pretty good one. But if there's something I missed, and you want to tell me about it, and I know you will, drop us a line at hello@FutureCommerce.fm. Remember, hey, we can change the future because why? Because we control commerce, right? Commerce touches everybody, and we have the power to make the future what we want it to be. Thanks for listening to Future Commerce.

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