On this 63rd episode of The E-Comm Show, our host and BlueTuskr CEO Andrew Maff is with Yaron Shapira, co-founder and CEO at 8fig. As an entrepreneur at heart, Yaron has founded multiple successfully acquired startups ranging from mobile payment app, Check, travel and culture outlet, The Culture Trip, and international trading payment security platform, Qlarium.
Today, as he manages 8fig, he is helping businesses to solve challenges in the e-commerce space from managing inventory to handling supply chain and logistics. Listen to Yaron and Andrew as they talk about how to make better business decisions by using a growth platform like 8fig.
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How to Better Plan and Manage Your E-commerce Business - 8fig
SPEAKER
Andrew Maff and Yaron Shapira
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Yaron Shapira
Yaron Shapira is co-founder and CEO at 8fig. He is an entrepreneur at heart and has founded multiple successfully acquired startups. These include the mobile payment app Check, travel and culture outlet The Culture Trip, and international trading payment security platform Qlarium. His personal work experience in fintech and consumer app development and his family’s history in import trading sparked his interest in eCommerce and supply chain technology. He co-founded 8fig in 2020 as a comprehensive solution to the many challenges eCommerce sellers face. Yaron has a BSc. in Computer Science, a B. An in Economics and an M.B.A. from Bar Ilan University, Israel.
Transcript:
00:04
I prefer not to gamble. Okay, so for those who have a crystal ball, go with your suggestion for those who don't go with mine.
00:13
Hey everyone this is Nezar Akeel of Max Pro. Hi, I'm Linda, and I'm Paul, and we're Love and Pebble.
00:22
Hi, this is Lopa Van Der Mersch from RASA. You're listening to, and you're listening, and you are listening to The E-Comm Show.
00:34
Welcome to The E-Comm Show, presented by BlueTuskr, the number one place to hear the inside scoop from other ecommerce experts where they share their secrets on how they scaled their businesses and are now living the dream. Now, here's your host, Andrew Maff. Hello,
00:55
everyone, welcome to another episode of The E-Comm Show. I'm your host, Andrew Maff. And today I am joined by the amazing Yaron Shapiro. How are you doing? You're ready for a good show.
01:05
I'm good. I'm good. Thank you so so much. I'm super happy to be here today with you.
01:12
Yes, super excited to have you on the show. So I always like to kind of start these off the stereotypical way, which is basically, why don't you tell us a little bit about yourself where you started, and then obviously about the right thing, and we'll kind of go from there. Okay.
01:25
Yeah. So I know this is an ecommerce show, right? I am not an E-commerce seller. But I'm coming from a commerce company. My family deals with E-commerce throughout all of our lives in bad memory I'm coming from an engineering background, and I learn computer science. I develop code. So all of my careers, this is where I'm coming from. So, I worked in multiple tech companies, including miracle way which was acquired by HP. I was part of the founding team at a company called to check, where we were the first mobile bill payments application actually enabled consumers to pay their bills directly from their phones. Today, it sounds like a normal thing right to pay for your phone doesn't sound like a big thing. But when we did that, we were app number 500 on the App Store, okay, so the first 500 applications as well. So back then to make payments from your phone, your phone was like science fiction, okay. It returned very nicely until it was acquired by it. That we are all familiar with. Then I was co-founder and CTO at a company called the cultural trip. A big brand, a big website. I'm sure many of the viewers are familiar with, I think a lot quite a lot of content that people usually love. And then, a co-founder and I were CEOs of a company called colloquium, where we created the chronology to underwrite the risks in the supply chain. And then, we started this company was acquired in late 2019. And then we started a fix. So to summarize, I'm coming from an engineering background, with a lot of knowledge in payments, a lot of knowledge in the supply chain, and a lot of a family experience in commerce. And we decided to take all of that in order to help what they think is a revolution in commerce. And I think that using smart payments and technology, and especially supply chain, can really help the E-commerce sellers, who are the new entrepreneurs who are actually doing the rain and new commerce era. So I'm really excited to be here to talk about equals.
04:18
Beautiful. So you're, you're in a space where there's definitely a bunch of lenders out there, right? Like that's, that's kind of the there's a bunch it's not complicated to find any of them. But there are obviously some differentiators that everyone kind of points at. And I know Shopify does something themselves. I believe Amazon does something themselves, too, if I'm not mistaken, but what's the what is differentiator between eight figs and everyone else that you know we won't say names?
04:53
There is there are a lot of differences. I actually do not want to be in this show, and copyright-like don't want to play. Say, Hey, you should only use a trick, but hey, you should or you should URL. Here's a question I want to ask you; maybe I can take this question to a little bit different level to think about ecommerce and what are the challenges that they are facing. Because I think that the challenges that they are facing? Well, getting capital getting funds is one of these challenges. But I think that most of the viewers will think similarly to me that this is not the only challenge that they are facing; let's try to think about them, okay? They're usually who are doing what they are passionate about, they are doing things that they know a lot about. So they are selling goods that they develop in a very good in good quality. Right pricing. So very, very nicely, and there, their profits are good profits, okay, they are making good profits out of that they have their businesses, usually a solid one. So very profitable. Another thing that ecommerce sellers have, and this is what excites me, is that they're super scalable. So they are selling on amazon.com, they are selling on Shopify Bigcommerce, and WooCommerce. At Walmart, there are a lot of options. And so if I missed any, if I missed, exactly, there are a lot of things, and I think, is that they are able to scale, like significantly, almost, I must say, infinitely, so very profitable, and super scalable. So, all is good, right? The thing is that once they start to go, the challenges start to come in there. They rely on the supply chain many times on international supply chains. Now, if you're ordering one batch from another country, let's say China, let's say that takes four as an example. It might take you a few months to get the goods. This is a lead time, and then some logistics time, and then some time until you are making them, and then the marketing and getting things out, and you're getting paid. This is a post. Now, if you're small, you're doing this process again and again. And again, it's fine. Once you start going, you start being successful, it stops being very tense because the frequency of orders is increasing the amounts that you need to pay for a deposit for the balance for shipping, it starts to accumulate start to be a significant amount. And you might start to have multiple products, you might even have multiple platforms that you are running on. This is the place that is a very profitable business that they are passionate about. And super scalable. This is where it starts to become complex. So getting funds is one of the solutions to the challenge that they have. But another thing is about planning, being able to create their business plan, plan their cash flow, and adjust the cash flow and adjust the business plan as they go. Because they make make make a plan. Every ecommerce seller knows that the plant that he did last month has all the walls, and it's fine; you just need to adjust. And so I think ecommerce sellers, as they are small businesses, they need the ability to do the planning. They need the ability to get capital, which is tailored to this ever-changing planning. I think this is the king.
09:08
So with that, I mean, that definitely makes a lot of sense. But obviously now, going into 2023, We're looking at probably, you know, some people speculate whether this is true or not. But we're looking at probably going into a recession in many different countries, which would be where their supply chain starts, and where it ends. What's your thought process on taking in additional capital during a recession? When really it's kind of a big question mark or are they going to continue to see the sales that you know, they were projecting? Are they going to see a significant decrease? Is it just going to kind of be like a flat year? How are you supposed to kind of make that judgment on when you should be bringing in additional capital or not?
09:53
It's a good question. I will answer your question, but if you want, later I will give you my assessment or prediction, or guests on what they think is going to happen. But to answer your question, I think this is a very hard question. I do not have an answer. I can just say that I do not know. The thing is that all of the ecommerce sellers who are currently listening to us do not know, either, right? They didn't know if, let's take Amazon saying blinding in July was going to be successful or not. Eventually, it was. But it was very hard to anticipate that everyone talked about the recession. A point that was awesome. What does it say about the holiday season? I don't know. So far, it seems quite nice. But it was hard to predict. Do you know what is going to happen in q1? I do not know, q2, I do not know. So what I do know is that once you are living in certainty, what you need is you need flexibility. So if you are committing now to take a loan or the advance of $100,000, $500,000, or $1 million, okay, it depends on the size of your business, right? It might be frightening, I totally get it. This is why the right way to do that is to make plans and to make sure that the cash that you're getting, the loans or advances that you're getting, are going to gather with the plan. Because then if your plan will go, it will go worse than what you expected. So you update the plan down, you're getting less cash, which is awesome for you, and you're not committing too much. If you're doing better, maybe you were too pessimistic for mistakes. And actually, you're doing awesome, right? It is, let's be positive, it's also an option, then you're going you will need to update your plan up, and the cash will go up with you. So getting flexible cash that goes with the business plan that you're doing that you can always change, I think it is a significant key.
12:16
So let's pivot back to what you mentioned. What do you think gonna happen?
12:21
I think I do not know how the recession is going to influence consumers' consumption. Right. But let's take the war side, let's say that consumers will buy less, less, and for cheaper, okay, this is the world's commerce case, right? My thinking is that, unlike any similar era, the similar crisis in the past ecommerce today, so establish that I think that ecommerce sellers are actually in a better position to overcome the recession than brick and mortar stores, brick and mortar stores, they have a lot of fixed commitments and liabilities, they have rent, they have a lot of employees, they have a lot of commitments. So they are less agile ecommerce sellers. If you think about that, almost everything is flexible, and almost everything is urgent. So I do not know what is going to happen. But I know that ecommerce sellers can adjust quickly I think that this is what they think is helping them as well through making a business plan and the cash flow that goes with it is very flexible. So ecommerce sellers, I think, are in a better position to adjust to whatever the future in then in 2020, Facebooking is ahead of us.
13:49
Yeah. Well, if you think about that, though, so let's look at like the brick and mortar aside. Yeah, they have a lot of other people on staff. You know, they have rent they have things like that they still have to pay for but the majority of ecommerce sellers, at least a lot of the ones I'm familiar with, are typically using like three pls and you know, they have while they're not dealing with the headaches of management, and you know, staff and all that fun stuff, they still have that giant chunk of what they're paying for their three PL so if they do see kind of, you know, diminishing returns, they start to see a big reduction in revenue coming in. Don't they start kind of running that risk of like, I can't afford this three PL anymore or maybe like you know, their manufacturer, it's just like, I can't order enough quantities for it to stay at a certain level in which case now your margins get lower, like how do you kind of combat that?
14:41
Yeah, so My recommendation for ecommerce sellers. It's might be a little bit counterintuitive, but I might say that they need to start working in smaller and shorter cycles or batches or even a year to buy. I just gave an example, to buy inventory for a quarter, once a quarter, maybe they should go to do it twice per quarter. So half the inventory, but making it faster, maybe even, for example, if they do it internationally, instead of shipping by sea, consider shipping by air. So you're going to pay more probably only on the goods because your chunks are smaller, you might pay more on shipping if you do it by air, expedite, or whatever is relevant to your business. So your expenses will go up, and your agility will go up as well. And your commitment to your three PLs, for example, can be a little bit more mitigated. So it's a little bit counterintuitive. But if you think about that, I think that this can be very good for them. So shorter cycles and betters a plan ahead, but we talked about this already. And maybe the last piece of advice that I might suggest is a try to create your own traffic, try to create your own audience. And the best way that I know about this is you should create your own content. And it's relevant for every industry that you are in create it can be a solo video can be so written content, or create your website, it's it might be pertinent for some of the sellers, and we are helping them with doing that. Because if I explained my experience earlier, we have a lot of experience in content creation, in scale overhearing inside a fixer, and we are helping clients. But I will recommend going in that direction. It can make you independent, not reliable on platforms. And if you own your inventory and its space due to short cycles, and you control your income flow of consumers, you might be much much stronger.
17:21
Just so our listeners know, I did not pay you to say that you should create more content. But I appreciate you saying that. Well, so obviously that obviously means I've been in the E-commerce marketing side of things for I think coming up on like 15 years now. But the operation side wildly infuriates me, I don't entirely get it. And it's why I was never a seller myself is because that's the side that I I don't have any trust in myself for it. So forgive me if this is a dumb question, but why couldn't you go in the other direction? So you just had what seems to be a tolerable q4, as opposed to what a lot of people were expecting, why not do a significantly larger order so that instead of maybe doing quarterly, maybe now you're maybe you're a little bit less agile, but you might have been able to do a bigger run and even get your margins a little bit better? In which case, what are the pros and cons of if they were to actually take in additional capital if they need it? Or even if they had a good enough q4 to do a larger order and just have inventory for a significantly longer time.
18:31
I could do that than coming from a familiar of commerce, right? This is in our DNA for future generations. I will tell you something about my father, okay? I'm not a gambler. I'm not a gambler. Like what do you suggest it can be like, if it walks you you are, this is the best solution obviously. So if you have a crystal ball, that can tell you that this will work for you. Go ahead and do that. If you do not have a crystal ball, and by the way, I do not have one, then what I will suggest doing is increasing your probability of survival and success. So going into shorter batches might be a little bit more expensive, I get it. Agility is going to save your business. Eventually, in the mid-range in the midterm. It's going also to pay you off in profits. You might find that you can make small changes and maybe price it for more. For example, you see that the mood of consumers is shifting a little bit. They're still buying your products, but they want a little bit different. A lot of things, especially when if consumer's conceptions will go down, and maybe they are going might be pickier. You, I prefer not to gamble. Okay? So for those who have a crystal ball, go with your suggestion for those who don't go with mine.
20:21
That's exactly why I don't do operations. So the other thing I was thinking about too, I've always heard that you don't really want to take a loan or any kind of capital injection, and you don't need it if you need it. And you're like, kind of desperate, for it's probably not the right time to do that. Even though your answer might be biased, but super interested in what your thoughts are like, how do you stand on that?
20:51
I do not see what we're doing as injecting capital. This is where we are doing the type we are given, we're giving capital to our partners, to our A, to the E-commerce sellers who are working with us, and if any one of you is listening to us, so thank you, we really, really appreciate your business. And I see it a little bit differently. We see ourselves as the AI CFO that these businesses do not have, they might use an external accountant to do the reporting and stuff, which is awesome. But the CFO job is a little bit different CFO is doing your planning and giving you warnings about what you should do, and what you should not do. He might see things before you see because he analyzed the data in a little bit different way, then, then you as the businessman looking at that they're looking for the CFO looking from a different angle. And the good CFO or CIO who provides the cash is talking with the banks bringing in the cash, and he's tracking your execution versus the plan. And if there is a gap between the plan is like that the execution is like that, or the execution is better than the plan, who will make adjustments? This is what a good CFO would have done for you if you had one. But many ecommerce sellers do not have one. So he gets the AI CFO. And I think this is the offer that we are giving them. So I do not see the money that we give clients as a loan or wins in advance or as a capital injection, we are actually their partners, and we give them money. Not in general, we give them money to buy this batch of goods according to the plan. And then they need more to buy more goods because let's say the sales in the holiday season coming up to be awesome. So they need to order another batch of Nopal. And they come into the app and say hey, I need more. They create a new line. This is our term. So they create a new line, and boom, they get more funds because it just makes sense. This is a good business decision to go and get more goods. Okay. Let me give you a negative example. as well. They order a lot of goods for the holiday season. They also plan to order some more goods in the q1 holiday season is not that great. They are stuck with some inventory. A good business decision, which is good for the client will be okay, no problem. Let's take more time to sell this inventory. That's it, my service base goes down. What can you do? But maybe it's time to postpone for a month or two next bit, right? This is the right business decision. This is exactly what I'm saying when I'm talking about updating the business plan. This is exactly what I'm talking about. So this is what the trick is doing for them. So it's more of a partnership than a lender. If you're looking for a lender, as you said, there are tons of options that we will not name, but if you are looking for a partner for an AI CFO, I think we might be helpful.
24:15
Beautiful, your honor, really appreciates having you on the show. Obviously love to give you a moment here let everyone know where they can find out more about you and more about a topic.
24:23
So, of course, the best way is to go to our website, 8fig.com A you can also find us on most social networks you can find you can text me directly on LinkedIn. But you can find us also on Facebook, Tik Tok, Instagram, and Twitter, I hope that I did not insult any social media. But if you have another social media we have one over there as well. Polly, please come. I mean, you can come into the website, and there is a button to text with us. You're welcome to text us. Feel free to text me directly. And thank you so much for having me today.
25:14
Yeah, thank you so much for being on the show for all of our listeners. I'll put this in the show notes. It's eight figs in the number eight not spelled out. So just in case, you go finding it, you don't have to do all that work of spelling it out. But obviously really appreciate it to everyone on the show. Per usual, please make sure you rate, review, subscribe, and all that fun stuff on whichever platform you're watching this on, which could be any podcast platform you prefer, or YouTube or whatever the comm show.com to see all of our previous episodes and all that fun stuff. But usual, thank you so much for joining us, and we'll see you all next time.
25:48
Thank you for tuning in to The E-Comm Show head over to ecommshow.com to subscribe on your favorite podcast platform or on the BlueTuskr YouTube channel. The E-Comm Show is brought to you by BlueTuskr, a full-service digital marketing company specifically for E-commerce sellers looking to accelerate their growth. Go to BlueTuskr.com Now for more information. Remember to tune in next week for another amazing episode of The E-Comm Show.
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