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Matt Edmundson: Well, hello and
welcome to the e-Commerce podcast

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with me, your host, Matt Edmundson.

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The E-Commerce podcast is all about
helping you deliver e-commerce.

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Wow.

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And to help us do just that today I'm
chatting with my very special guest,

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Eric Youngststrom from On Ramp Funds
about why e-commerce is challenging and

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what you can do to make it work for you.

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Uh, this is gonna be a real
fascinating conversation.

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I'm looking forward to this one, but
before Eric and I jump into that, let

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me suggest a few other episodes that
I think you'll enjoy, especially if

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you've not been with us for that long.

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Uh, we've got a massive
archive of episodes.

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And so, uh, check out what does e-commerce
marketing look like in 2022, even though

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we are like practically at the end of it.

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Uh, it's still a good podcast to listen
to, Check out the one with Kenny Gray,

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and also check out my conversation with my
good friend Ian Finch about why technology

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is not the issue, but you are, I, so it's
one of my favorite episodes actually.

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Uh, you can find these and our entire
archive of episodes on our website

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for free at ecommercepodcast.net.

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Now this episode is brought to you
by the fabulous e-commerce cohort.

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Yes, it is.

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Uh, e-commerce cohort is, is
live and it is going strong.

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Uh, Eric, I'm sure you've been
around e-commerce a little bit.

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Uh, and for those maybe who are starting
out in e-commerce business as well

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as that has been established, but
starting out, I mean, it's a hard road.

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We're gonna be talking
about that today, Uh, and.

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If you're starting out, what do you do?

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What do you do?

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Uh, who can help you?

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Who can guide you?

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That's where cohort comes in.

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Not only do you get guided sprints,
so some great teaching, some good

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workshops, some good stuff you can
learn, but you're involved in a

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community that you can also draw on.

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So if you would like to know more,
checkout ecommercecohort.com.

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Uh, or you can email me,
matt@ecommercepodcast.net

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with your questions.

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I I'll try and answer them.

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Uh, but if you've been around
an eCommerce, whether you're

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starting out or whether you are
brand new, uh, do check it out.

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It's gonna be really, really good for you.

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Of that I have no doubt Now.

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Let's talk to Eric.

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Eric is the founder and CEO of On-Ramp
Funds, a purpose-built financing

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platform for e-commerce brands.

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And in less than two years, since its
founding, Eric and the On-Ramp team

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have raised over $40 million in seed
funding and have helped dozens of

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e-commerce SMBs get off the ground.

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Uh, Eric, welcome to the show.

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Great to have you here despite
it being allergy season for you.

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Uh, a warm welcome.

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Eric Youngstrom: Thank
you so much for having me.

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I'm excited to be here today.

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Matt Edmundson: Well, it's great
that it's great that you are here.

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So, uh, behind you, uh, dear listener,
if you're listening to the audio

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version of the podcast, which I know
like 98% of people who consume this

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show, listen to it rather than view it.

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Uh, you will not notice that there
is a big Texan flag, uh, behind your,

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uh, uh, your beautiful face there.

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Uh, so I take it you live in Texas and
you hail from that part of the world.

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Eric Youngstrom: That's right.

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We're here in Austin, Texas.

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Um, been in Texas for 30 years
now, and, and on Ramp was born

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and raised here, if you will.

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Matt Edmundson: Oh, okay.

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Okay.

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Austin is one of those
beautiful cities, isn't it?

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It's just a, it is just a lovely
part of the world and a good

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place to go to if you ever get the
chance, uh, and great food too.

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Eric Youngstrom: fantastic food.

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Rolling hills, beautiful trees.

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It's, it is a, it's a beautiful
place to be, um, and great people.

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So you can't go wrong on coming
to Austin that's for certain,

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Matt Edmundson: Yeah.

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Yeah.

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Very idyllic.

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So, Eric, tell me about, uh, on-RAMP
funds and what it does and why?

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Eric Youngstrom: Sure.

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We're, we're a working capital financing
solution for small e-commerce business.

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We work with businesses, uh, with
less than 10 million in revenue.

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Um, you can literally be at about your
first kind of 90,000 in revenue and

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start working with us, Uh, even smaller.

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Um, our goal is to help the e-commerce
merchant, the, the business owner, really

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keep their very, very valuable capital and
cash and, and credit cards, if you will.

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Mm-hmm.

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out of, um, sales and inventory turnover.

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Right.

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That, that feels like a very low
risk kind of almost sure thing

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on a 30 to 90 to 150 day basis.

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And so what we do is fund that turnover.

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We give you the capital necessary to
turn over your next 90 days worth of

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inventory to drive the advertising
on that, and then make sure that you

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always have the shipping and fulfillment
budget ready to go to, to fulfill

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that next order as it comes through,
so that you can generate the sale and

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actually get those deposits in and,
and reduce the chance of, you know,

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refunds and charge backs and whatnot.

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Matt Edmundson: Mm-hmm.

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, It's interesting, isn't it?

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Cuz I, I remember.

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Our first business, uh, or first real
successful online business, um, we,

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uh, we predicted that we would do
maybe 10, 15 grand in revenue the first

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four months we launched in August.

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Uh, and so we figured by the
end of the year if we did 10,

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15 grand in sales, we'll dance a
jig, we'll be all kinds of happy.

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Well, the business actually
did 400,000, uh, in sales.

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Those first four months.

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It went, it went totally crazy.

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And it went crazy very quickly,
and it was a wonderful thing.

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But one of the things that we experienced
then as a result of that is how

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do you finance that growth, right?

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Because you, you've
gotta go buy the stock.

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To sell to the consumer.

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And so, um, we needed bigger warehouses.

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We needed to  everything that we
thought was gonna happen needed to

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be rethought in a, in an instant.

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And, and don't get me wrong, this was
a beautiful problem to have, right?

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I, I'm not, Yeah, yeah, yeah.

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Totally beautiful.

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But I, I get how, um, an e-commerce,
actually, it's one of those

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things, it's not traditional
bricks and mortar business.

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It becomes a lot harder to quantify.

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But actually the need for help,
certainly when scaling, I think is, is,

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is, is apparent and, and is obvious.

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I dunno if you found that.

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Eric Youngstrom: Uh, well, I, yes,
that's, that's why we're here.

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Right.

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Um.

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We've seen the, the challenge that the
small business merchant has with just

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having the necessary capital, right,
to order that next round of inventory

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or their credit cards maxed out.

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And so guess what?

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They can't run an ad on Google to drive
that next sale to their Shopify store.

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Um, and now they're struggling to figure
out which card do they pay down and you

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know, which one are they gonna be late
with a payment on and that sort of thing.

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So they can keep the wheels turning.

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And that feels like a very, um, it's, it's
I won't say it's necessarily easy, but

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there's a, there's a collateral stream
there, a sales stream there that you can

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then go offer capital on, um, that is
very tightly aligned with just the kind

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of cost to gets sold to the business.

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Mm-hmm.

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. And then the other thing
that happens is this, right?

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Is that the e-commerce industry,
you know, has a kind of 60 to

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120 day cash conversion cycle.

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Mm-hmm.

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, right?

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When you think about purchasing inventory
that you're gonna have to use your

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own funds up for, call that 20, 25% of
your 90 day revenue stream, and then

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spending another 15 to 25% of that
90 day revenue stream on marketing

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to drive the sales, and then shipping
and fulfillment to honor the sales.

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Um, and then by the time you get
to day 60, you're not quite yet

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to getting the profit dollars out.

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But now you're buying
next quarter's inventory.

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Mm-hmm..

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And so now you're actually
tying up capital again.

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And at least under US accounting
standards, which this often means is

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while a merchant with a million dollar
revenue business who should be generating

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$150,000 in profit, that profit is
always captured in that turnover cycle.

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Yeah.

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And so, Um, if, if you kinda
look at the world of the, the

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e-commerce aggregators, right?

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Buying up these small kind of $1 million
to $2 million companies, they offer

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very, very low valuations because they
understand that a lot of these business

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merchants are just kind of exhausted
of being on a treadmill that they

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can't get off and they don't feel like
they're paying themselves, you know,

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they don't feel like they're saving
for college or things like that yet.

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And so they see an opportunity.

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Um, our mission is just to give
them the capital they need to keep

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growing so that if that offer comes
along and it's one year's, you know,

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profit, they could look at that and
say, Well, why would I take that?

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I can, you know, I've got on ramp now.

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Mm-hmm, um, I can simply pay,
I, I'm now paying my salary.

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Why would I trade one year's worth
of salary, you know, for a sale today

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when if I spend another year or two at
this while I'm still paying myself a

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salary, maybe doing a little saving,
um, I could grow that business to

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two or three times the size it is.

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Um, and.

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And take an exit, and hopefully they
can get a real multiple on that exit.

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So our mission is just to see more and
more small business owners thriving,

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um, because we just think it's a,
it's a, a better thing for the world,

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um, if we have more small business
owners and fewer large businesses.

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Matt Edmundson: Well, I, I
couldn't agree with you more.

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Uh, the power of the small business to
change the world, um, I think is, is,

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is one of the things that we should
be having more conversations about.

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And I'm, I'm always amazed, actually,
here in the UK there's a lot of

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political turmoil, Let's just
put it that way, at the moment.

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Everywhere.

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Yeah.

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Everywhere.

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Uh, especially here in the UK.

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And, um, I'm always amazed as a small
business how much the small business is

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not really thought about from a political
standpoint, but I, I think actually

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it really should be, you know, so.

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So you've been doing this for two years.

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You started this two years ago.

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How did you get into it?

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Did you just wake up one day and thought
this is what I'm now gonna do, or was

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there a bit more of a story to it?

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Eric Youngstrom: Oh, there's
more of a story to it.

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So, um, Uh, I helped launch a company
called Shipping Easy back in 2012.

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Um, we provided an order management
and multi-carrier shipping solution

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to these same small business owners.

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Mm-hmm..

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Um, so you, you would plug in your
Amazon, your Shopify, big commerce, eBay,

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Walmart, wherever you sold online, and
all those orders would be downloaded into,

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um, a SAS space web application, Right.

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So you had one screen to see every
order, regardless of where you sold.

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Um, and then that application would
run a machine learning algorithm,

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um, and tell you how to then ship
the next package to optimize for it.

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Was it the free shipping
service the customer asked for?

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So how do you get it as fast as
possible, but as the lowest cost?

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Um, was it overnight?

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Well, how do we make sure it gets
there overnight and not two days where

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you're gonna have an unhappy customer?

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Um, was this one of your best customers
who maybe asked for free shipping?

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It'd be worth it to just go ahead
and give them the two day product

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so that they feel like really
taken care of, that kind of thing.

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Mm-hmm..

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Um, and during that process we saw that,
um, a lot of these small business owners

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were struggling with working capital.

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Um, They would get orders into our
system and they didn't have the

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money to pay for the next shipment.

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Um, and all of a sudden then like, hold
on, that, that's actually worse than,

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it's worse to get an order that you
won't fulfill than it is just to turn the

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site off and not take the order mm-hmm.

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so that you're not paying, you're not
having to go pay the, the credit card

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processing fees to go give the money back.

227
00:11:08,706 --> 00:11:09,071
Mm-hmm..

228
00:11:09,391 --> 00:11:13,531
So, um, after doing that, we,
we built that business and were

229
00:11:13,531 --> 00:11:14,881
acquired in about four years.

230
00:11:15,241 --> 00:11:17,911
Uh, I worked for the parent company for
a number of years after that, running

231
00:11:17,941 --> 00:11:19,526
a global business development forum.

232
00:11:19,956 --> 00:11:23,176
And then, um, just kept seeing
this problem and decided I wanted

233
00:11:23,176 --> 00:11:27,406
to go do another startup, and,
um, saw the opportunity to go

234
00:11:27,436 --> 00:11:31,756
really focus on this and, and
build a product around e-commerce.

235
00:11:31,786 --> 00:11:36,196
Looked at the industry and really saw that
most of the competitive products felt like

236
00:11:36,196 --> 00:11:38,086
kind of off the shelf Wall Street tools.

237
00:11:38,091 --> 00:11:38,366
Mm-hmm.

238
00:11:38,566 --> 00:11:41,926
that weren't really purpose built
for e-commerce and that there was a

239
00:11:41,931 --> 00:11:46,846
way to really look at the e-commerce
data streams from, you know, the

240
00:11:46,846 --> 00:11:52,966
most granular level and then build an
underwriting algorithm from the bottom

241
00:11:52,966 --> 00:11:57,316
up that was intentionally designed
around how e-commerce businesses run.

242
00:11:57,526 --> 00:11:57,616
Mm-hmm..

243
00:11:57,861 --> 00:12:01,546
Um, that would provide a disciplined
set of capital tools specific to this

244
00:12:01,546 --> 00:12:05,506
working capital challenge, um, and
really let the merchant extract their

245
00:12:05,506 --> 00:12:09,196
own personal capital from this part of
the business so that they could redeploy

246
00:12:09,196 --> 00:12:10,826
that into higher growth activities.

247
00:12:12,126 --> 00:12:15,766
Matt Edmundson: So you'd, uh, so,
so this business stemmed out of, uh,

248
00:12:15,766 --> 00:12:16,696
something else that you were doing.

249
00:12:16,696 --> 00:12:19,336
You saw the need, and you're like, Well,
okay, we can get involved with that.

250
00:12:19,336 --> 00:12:22,276
And, and so that's, you kind of
put two and two together and,

251
00:12:22,276 --> 00:12:23,866
and, and, and created all of this.

252
00:12:24,406 --> 00:12:29,266
So, so you've been around eCommerce
then for more than the two years

253
00:12:29,266 --> 00:12:31,026
you've been involved with on ramp.

254
00:12:31,486 --> 00:12:31,886
Eric Youngstrom: Yes.

255
00:12:32,126 --> 00:12:37,006
So I've been, I've been in e-commerce now
for a decade, um, and I've been building,

256
00:12:37,096 --> 00:12:41,506
you know, let's call it SAS based software
companies now for about 20, 25 years.

257
00:12:41,986 --> 00:12:42,316
Matt Edmundson: Okay.

258
00:12:42,316 --> 00:12:43,846
So that's your, that's your background.

259
00:12:43,846 --> 00:12:47,956
So some of the things that you've
noticed in the e-commerce based

260
00:12:47,961 --> 00:12:48,946
then over the last 10 years.

261
00:12:48,946 --> 00:12:51,976
Where, where do you, where do
you think as an industry its

262
00:12:51,976 --> 00:12:53,536
currently sitting E-commerce?

263
00:12:55,066 --> 00:12:56,026
Eric Youngstrom: Well, you know, I think.

264
00:12:57,556 --> 00:12:59,416
And there's a lot of regional
differentiation, right?

265
00:12:59,421 --> 00:13:03,016
Like the, the e-commerce adoption
in the UK, I think is what, two or

266
00:13:03,016 --> 00:13:04,906
three times that of in the US right?

267
00:13:05,206 --> 00:13:07,876
In the United States, I think
we're at kind of 16, 17%.

268
00:13:08,026 --> 00:13:08,116
Mm-hmm.

269
00:13:08,361 --> 00:13:10,186
of retail being the e-commerce.

270
00:13:10,191 --> 00:13:14,266
I think the last I checked, I thought
you guys were maybe north of 30.

271
00:13:14,686 --> 00:13:15,266
Um, yeah.

272
00:13:15,271 --> 00:13:15,556
Yeah, we are.

273
00:13:15,556 --> 00:13:19,336
So at least 2X, um, now
you're, you're a, you're.

274
00:13:20,326 --> 00:13:22,186
You're a tighter geography, right?

275
00:13:22,186 --> 00:13:22,876
With a digital

276
00:13:22,876 --> 00:13:22,936
Matt Edmundson: Yeah.

277
00:13:23,196 --> 00:13:24,346
That's the key difference, isn't it?

278
00:13:24,496 --> 00:13:24,796
Yeah.

279
00:13:24,796 --> 00:13:24,916
Yep.

280
00:13:25,156 --> 00:13:28,636
I can ships stuff anywhere in the UK
usually next day and it's not a problem.

281
00:13:28,846 --> 00:13:31,126
Uh, whereas for you it's
not that straight forward.

282
00:13:31,456 --> 00:13:31,816
Yeah.

283
00:13:31,816 --> 00:13:32,086
Eric Youngstrom: Yeah.

284
00:13:33,316 --> 00:13:36,286
I can do it in Austin, but if
it's gotta get to Salt Lake City

285
00:13:36,286 --> 00:13:37,876
or Seattle or New York, right.

286
00:13:37,876 --> 00:13:38,836
It takes longer.

287
00:13:39,196 --> 00:13:40,146
Um, so I.

288
00:13:40,866 --> 00:13:44,876
I see just a tremendous amount of runway
left for, for e-commerce to continue to

289
00:13:44,876 --> 00:13:51,146
grow, continue to be, you know, to evolve,
um, and really specialize and, and just

290
00:13:51,146 --> 00:13:52,586
take over more and more of that retail.

291
00:13:52,766 --> 00:13:55,286
Now I do think, you know, the
omnichannel stuff we're seeing really

292
00:13:55,376 --> 00:13:58,946
become more prevalent today is an
important part of that process.

293
00:13:58,946 --> 00:13:59,276
Mm-hmm.

294
00:13:59,516 --> 00:14:01,966
Um, but I don't think it's,
I, I don't think it's a

295
00:14:01,966 --> 00:14:03,166
requirement to be omnichannel.

296
00:14:03,166 --> 00:14:07,156
I think there's still a huge opportunity
for the, the digital only retailer,

297
00:14:07,156 --> 00:14:12,316
if you will, um, to grow, build
brands, um, and, and build businesses

298
00:14:12,316 --> 00:14:14,146
that are long term sustainable.

299
00:14:14,476 --> 00:14:14,836
Matt Edmundson: Yeah.

300
00:14:15,166 --> 00:14:15,346
Yeah.

301
00:14:15,346 --> 00:14:19,336
I, I agree because, you know, everyone
talks don't, they, a lot about Omni

302
00:14:19,336 --> 00:14:24,166
and it's an omnichannel is fine if
you're Nordstrom, you know, or if

303
00:14:24,166 --> 00:14:27,406
you are, whatever you doing, you've,
you've got the ability to do it.

304
00:14:27,406 --> 00:14:31,636
Makes a lot of sense to integrate all your
stores with your online, and I can, I can

305
00:14:31,636 --> 00:14:35,656
click and collect, I can return to the
store, I can do all those kind of things.

306
00:14:36,496 --> 00:14:39,376
But it, like you're saying at the
start, you know, most of us is

307
00:14:39,376 --> 00:14:43,516
small enough not to even think
about, uh, Right that type of thing.

308
00:14:44,926 --> 00:14:46,746
Eric Youngstrom: Well, what's,
what's really interesting I think

309
00:14:47,136 --> 00:14:51,721
or funny is if you look at the
big, um, mall owners, right?

310
00:14:51,721 --> 00:14:53,191
Simon Malls, Westfield.

311
00:14:53,371 --> 00:14:53,791
Mm-hmm, right?

312
00:14:53,791 --> 00:14:56,851
Those guys, you know, Amazon said
20 years ago they were gonna have

313
00:14:57,041 --> 00:15:00,841
a, a shipping facility within 20
miles to 95% of the US population.

314
00:15:00,871 --> 00:15:03,181
That was gonna be one of
their key differentiators.

315
00:15:03,541 --> 00:15:05,941
And what's crazy is that
that already existed.

316
00:15:06,331 --> 00:15:10,081
In all the US shopping malls mm-hmm, and
yet none of those big mall guys could,

317
00:15:10,201 --> 00:15:11,791
could see the e-commerce opportunity.

318
00:15:11,791 --> 00:15:15,361
They were so focused on their real
estate play mm-hmm, but they actually

319
00:15:15,366 --> 00:15:19,261
could have listed essentially a, a
product catalog that was the same size

320
00:15:19,266 --> 00:15:22,621
of Amazon and then said, Hey, you can
drive to the mall and pick it up, or we

321
00:15:22,621 --> 00:15:25,561
can just ship it from the mall to you,
but it'll be their same day next day.

322
00:15:26,816 --> 00:15:27,986
And you know?

323
00:15:28,556 --> 00:15:31,826
What a missed opportunity, I won't
say would've been easy, right?

324
00:15:31,826 --> 00:15:33,806
There's, there's a whole
lot that goes into that.

325
00:15:34,136 --> 00:15:36,356
Um, but it is interesting to see, right?

326
00:15:36,656 --> 00:15:39,956
You know, the mall might just convert
into a giant warehouse, right?

327
00:15:39,956 --> 00:15:40,166
Mm-hmm.

328
00:15:40,406 --> 00:15:44,636
with maybe a few showrooms in it, um, and
become then your distribution point that

329
00:15:44,696 --> 00:15:48,806
the interesting thing about that becomes
how much easier will it become, you know,

330
00:15:48,811 --> 00:15:51,466
10 years from now for the small business.

331
00:15:52,021 --> 00:15:56,011
D to C retail or e-commerce only
brand to all of a sudden then start

332
00:15:56,011 --> 00:16:00,001
to use those facilities to become
an omnichannel provider as well.

333
00:16:00,031 --> 00:16:00,631
Um, yeah.

334
00:16:00,661 --> 00:16:02,671
Without having to go become, you
know, you don't have to be, you

335
00:16:02,671 --> 00:16:05,671
don't have to go find rent and
deal landlords and stuff like that.

336
00:16:05,911 --> 00:16:09,181
You know, could you just go into,
you know, somebody else's store.

337
00:16:09,186 --> 00:16:09,481
Right.

338
00:16:09,481 --> 00:16:12,421
That's looking for all of these
really unique niche brands.

339
00:16:12,841 --> 00:16:13,141
Matt Edmundson: Yeah.

340
00:16:13,321 --> 00:16:13,811
Yeah.

341
00:16:13,891 --> 00:16:16,591
It's an interesting idea and you're
right about the mall thing and,

342
00:16:16,911 --> 00:16:20,646
and, and Amazon came along and did
something that they should have

343
00:16:20,646 --> 00:16:22,786
done 20 years ago, but never did.

344
00:16:22,786 --> 00:16:26,296
And I'm, it reminds me of
the, the blockbuster story.

345
00:16:26,296 --> 00:16:28,876
You know, Netflix came along and did
something that Blockbuster should

346
00:16:28,876 --> 00:16:30,076
have done, but then never did.

347
00:16:30,826 --> 00:16:32,086
It's quite fascinating, isn't it?

348
00:16:32,091 --> 00:16:38,401
And you, you, you hear about these, uh,
Sort of bigger company, and I think this

349
00:16:38,401 --> 00:16:41,761
is part of the benefit I think of being
a small business is you can pivot and you

350
00:16:41,761 --> 00:16:44,071
can change direction very, very quickly.

351
00:16:44,611 --> 00:16:47,791
It's a bit like driving a speed
boat versus driving a massive,

352
00:16:48,001 --> 00:16:51,301
you know, ocean liner that takes
years to turn that thing around.

353
00:16:51,931 --> 00:16:52,771
And maybe that's right.

354
00:16:53,011 --> 00:16:56,191
Maybe that's why maybe they saw it
but couldn't do anything about it.

355
00:16:56,191 --> 00:16:56,401
I don't know.

356
00:16:56,406 --> 00:16:59,851
I'd be really intrigued, you know, to
hear some of those conversations if

357
00:16:59,851 --> 00:17:04,441
they were ever recorded in the boardroom
and the decisions that were made.

358
00:17:04,441 --> 00:17:04,831
Eric Youngstrom: Yeah.

359
00:17:04,831 --> 00:17:08,731
No, I mean, it's, it's, you certainly
can't blame them, but you have to

360
00:17:08,731 --> 00:17:11,611
look at them and say, Man, there's a,
there was a missed opportunity there.

361
00:17:11,941 --> 00:17:15,721
Um, and honestly, I think that
opportunity probably still exists,

362
00:17:16,081 --> 00:17:19,201
but it might just seem so overwhelming
that it's, it's just something they

363
00:17:19,201 --> 00:17:20,341
can't even begin to figure out.

364
00:17:20,491 --> 00:17:20,761
Mm-hmm.

365
00:17:21,061 --> 00:17:21,421
, we'll see.

366
00:17:21,426 --> 00:17:21,691
Right.

367
00:17:21,691 --> 00:17:23,471
I mean, time's gonna tell on that one.

368
00:17:24,401 --> 00:17:26,221
Matt Edmundson: Well, one of the
interesting things for me, I mean,

369
00:17:26,221 --> 00:17:30,841
I, I'm a Brit, I live in the UK, and
so I see what's going on here and I

370
00:17:30,841 --> 00:17:32,191
see what's going on in the states.

371
00:17:32,341 --> 00:17:36,271
Um, and I see what's going on in
Canada and Australia and you know,

372
00:17:36,271 --> 00:17:37,711
the markets that sort of interest me.

373
00:17:38,881 --> 00:17:44,101
And a few years ago it's, it felt
to me like, and, and maybe Eric, you

374
00:17:44,101 --> 00:17:47,761
can talk to this, it felt to me like
everybody was talking about Amazon

375
00:17:47,761 --> 00:17:50,386
online and Walmart offline, Right?

376
00:17:50,386 --> 00:17:51,826
They, they were the two key stores.

377
00:17:52,486 --> 00:17:56,266
Now, the conversations I'm
having, people are talking about

378
00:17:56,266 --> 00:17:58,546
Walmart, both online and offline.

379
00:17:58,551 --> 00:18:02,566
It's like it's become another
marketplace, another Amazon type

380
00:18:02,566 --> 00:18:04,756
esque place where people can sell.

381
00:18:04,966 --> 00:18:11,476
And so it seems to me like Walmart have
done a pretty good job of catching up with

382
00:18:11,476 --> 00:18:16,006
that, kind of catching up, maybe the wrong
phrase, but sort of, uh, jumping on this

383
00:18:16,006 --> 00:18:17,866
bandwagon for want of a better expression.

384
00:18:17,866 --> 00:18:20,326
Because again, Walmarts are
everywhere in the states, right?

385
00:18:21,316 --> 00:18:21,826
Eric Youngstrom: That's right.

386
00:18:21,826 --> 00:18:25,346
They, they have that
same footprint, um, and.

387
00:18:26,026 --> 00:18:29,386
You know, they, what, about three
or four months ago they stopped

388
00:18:29,386 --> 00:18:31,066
curating the merchant, right?

389
00:18:31,126 --> 00:18:35,056
Um, so prior to then you had to
apply to be a merchant on Walmart

390
00:18:35,056 --> 00:18:36,646
and it, it was a process, right?

391
00:18:36,646 --> 00:18:38,176
Took three or four months to get approval.

392
00:18:38,446 --> 00:18:42,376
Um, and then, you know, sometime kind
of early summer, they just said, Look,

393
00:18:42,376 --> 00:18:46,546
we're gonna, we're gonna make it far
easier now to, to be a merchant, to get

394
00:18:46,546 --> 00:18:48,406
onto the Walmart platform and sell here.

395
00:18:48,826 --> 00:18:52,156
Um, which I think, you know, probably
is a testament to four or five years

396
00:18:52,156 --> 00:18:54,526
of maybe more than that six years.

397
00:18:55,561 --> 00:18:59,551
Building out that marketplace, getting
the technology in place, learning how

398
00:18:59,551 --> 00:19:00,841
to work with the merchants, right?

399
00:19:00,841 --> 00:19:04,291
Learning how to make sure that
when an order's processed,

400
00:19:04,291 --> 00:19:05,431
it's getting delivered right.

401
00:19:05,431 --> 00:19:08,761
That the, the right tools are in
place, the APIs are working, um,

402
00:19:08,761 --> 00:19:12,451
all the technology is there and you
know, now they can go expand that.

403
00:19:12,451 --> 00:19:17,011
And I think, I think I read that, um,
either Q2 or q3, Walmart added as many

404
00:19:17,011 --> 00:19:18,601
new merchants in that quarter as Amazon.

405
00:19:18,991 --> 00:19:22,741
Um, and so, you know, it's a, it's
a fantastic opportunity, right?

406
00:19:22,941 --> 00:19:25,921
To continue to diversify the
number of sales channels you have.

407
00:19:26,271 --> 00:19:28,511
Um, to, to get in front of more customers.

408
00:19:28,841 --> 00:19:32,291
And I think in a recessionary environment,
um, probably even more important because

409
00:19:32,291 --> 00:19:34,691
Walmart is, you know, a Lowcost provider.

410
00:19:34,931 --> 00:19:35,051
Mm-hmm.

411
00:19:35,296 --> 00:19:38,681
and, um, has, you know, I think
their, their sales are probably

412
00:19:38,681 --> 00:19:41,321
gonna increase during, you know, the
next kind of three to six months.

413
00:19:41,561 --> 00:19:45,401
Um, as you see some of the higher end
retailers, um, taking on the chin just

414
00:19:45,401 --> 00:19:48,953
because of, um, you know, inflation
and, and a recessionary environment.

415
00:19:48,953 --> 00:19:50,801
Matt Edmundson: Mm,
that's really interesting.

416
00:19:51,001 --> 00:19:53,431
They're really interesting on the
sort of the state of where it's at.

417
00:19:53,581 --> 00:19:57,781
And I, and I, like I say, I'm an outsider
watching what's going on in the US and

418
00:19:57,781 --> 00:19:59,821
thinking that's really interesting.

419
00:19:59,821 --> 00:20:02,271
I wonder how that's gonna
play out here in the uUKk.

420
00:20:02,491 --> 00:20:07,171
And, um, and what that's gonna
mean for places like Australia.

421
00:20:07,201 --> 00:20:10,351
Cuz you know, a few years ago, Amazon went
to Australia and you kind of think, well,

422
00:20:10,961 --> 00:20:14,311
well what's gonna happen now is that's
gonna tidy up all the delivery systems.

423
00:20:14,311 --> 00:20:16,831
And so over the next few years,
e-commerce will become a little

424
00:20:16,831 --> 00:20:18,991
bit, you know, bit more interesting.

425
00:20:19,411 --> 00:20:21,151
I mean, Australia is massive, isn't it?

426
00:20:21,156 --> 00:20:22,801
As a, as a, as a sort of a place.

427
00:20:22,801 --> 00:20:27,691
So, you know, um, but you, you,
you can kind of look at it from

428
00:20:27,691 --> 00:20:30,031
an outsider and you can follow the
trends a little bit, can't you?

429
00:20:30,036 --> 00:20:31,171
And just go, Oh, that's interesting.

430
00:20:31,176 --> 00:20:32,951
I'll just keep, ask
people to write on that.

431
00:20:34,626 --> 00:20:35,416
Eric Youngstrom: It, it, yeah.

432
00:20:35,416 --> 00:20:39,136
I mean, Australia has, has a huge, well
had, it was a very difficult market

433
00:20:39,136 --> 00:20:40,216
to do your fulfillment in, right?

434
00:20:40,246 --> 00:20:40,336
Mm-hmm..

435
00:20:40,576 --> 00:20:43,786
Cause the, the way the carriers worked
down there were different, um, you

436
00:20:43,786 --> 00:20:45,046
know, and the Canadian market's.

437
00:20:45,046 --> 00:20:45,916
Very interesting, right?

438
00:20:45,916 --> 00:20:49,376
Because it's really dependent
upon the US and the Maritimes.

439
00:20:49,396 --> 00:20:53,086
You know, there's, there's one highway
and rail line that connects the Maritimes

440
00:20:53,086 --> 00:20:54,796
into, you know, Montreal, Toronto.

441
00:20:54,946 --> 00:20:55,036
Mm-hmm..

442
00:20:55,276 --> 00:20:58,636
And then there's only one highway and
railroad that takes you from Toronto

443
00:20:58,636 --> 00:21:01,966
all the way through to Vancouver,
which means all those cities are, you

444
00:21:01,966 --> 00:21:06,766
know, less than 90 miles from, you
know, wa the, excuse me, the states.

445
00:21:07,096 --> 00:21:11,506
And so I think they're, they're actually
more pre, more, more, um, linked to

446
00:21:11,766 --> 00:21:16,876
the US um, as different regions than
they are to Canada as a single entity.

447
00:21:17,116 --> 00:21:18,736
Um, although I'm sure there's
some Canadians who would be

448
00:21:18,736 --> 00:21:19,726
upset with me saying that.

449
00:21:20,821 --> 00:21:23,371
You know, just from a, a
geography perspective Right.

450
00:21:23,376 --> 00:21:25,381
It's, it's not an easy thing to overcome.

451
00:21:26,551 --> 00:21:26,791
Yeah.

452
00:21:26,791 --> 00:21:29,541
Things you sort of, And Australia Yeah.

453
00:21:29,551 --> 00:21:30,871
Australia having a similar problem, right?

454
00:21:30,901 --> 00:21:34,261
Just, it's a massive geography
where, you know, you've got your,

455
00:21:34,321 --> 00:21:36,361
your kind of east coast, right?

456
00:21:36,451 --> 00:21:39,601
Cities that are closer together,
but then you go to Perth and

457
00:21:39,601 --> 00:21:40,381
all that sort of stuff, right?

458
00:21:40,381 --> 00:21:42,001
Like that's a long flight.

459
00:21:42,061 --> 00:21:45,321
That's not, it's not an easy
transport for shipping product.

460
00:21:45,701 --> 00:21:48,181
Matt Edmundson: Yeah, it's not a,
it's not a quick transport and in some

461
00:21:48,181 --> 00:21:52,771
respects, our testing has been, it's
almost quicker to ship from the UK to one

462
00:21:52,771 --> 00:21:55,711
side of Australia and to the other side
of Australia than it is to get a parcel

463
00:21:55,711 --> 00:21:58,411
from one side of Australia to the other
side of Australia, if that makes sense..

464
00:21:59,161 --> 00:22:02,611
Uh, and you're just like, I, I'm not
even quite sure how that works, but, um,

465
00:22:03,061 --> 00:22:06,991
I think it'll change, I think it would
evolve and, and sort of, uh, develop.

466
00:22:07,471 --> 00:22:11,671
So you've been working alongside,
um, e-commerce businesses, uh, more

467
00:22:11,671 --> 00:22:15,286
hands on, I guess for the last couple
years with the, with the financing.

468
00:22:16,426 --> 00:22:19,276
What's a typical size
business that you work with?

469
00:22:20,836 --> 00:22:24,016
Eric Youngstrom: Our, our average customer
probably ranges somewhere from 500,000

470
00:22:24,021 --> 00:22:26,116
to about two 2 million in revenue.

471
00:22:27,166 --> 00:22:33,166
Um, running a kind of 10
to 20%, um, profit margin.

472
00:22:33,306 --> 00:22:33,916
Matt Edmundson: Mm-hmm.

473
00:22:34,896 --> 00:22:40,891
and so, and is this, uh, sort
of that size business, are they

474
00:22:40,891 --> 00:22:43,961
pretty much all online or are they
trying to do the omnichannel thing?

475
00:22:46,276 --> 00:22:50,236
Eric Youngstrom: You know, we,
we have a number of, um, I'd say

476
00:22:50,236 --> 00:22:51,646
we're dominant on online only.

477
00:22:51,876 --> 00:22:52,316
Mm-hmm.

478
00:22:52,396 --> 00:22:54,766
. But we do have a lot of customers
who might have a boutique, right.

479
00:22:54,766 --> 00:22:55,096
Where mm-hmm.

480
00:22:55,561 --> 00:22:57,016
, um, in their local community, right?

481
00:22:57,016 --> 00:22:59,056
They're on Main Street, whatnot,
and they're selling there.

482
00:22:59,056 --> 00:23:03,031
But that, um, You know, maybe Covid or
maybe even before Covid, they saw the

483
00:23:03,031 --> 00:23:07,561
opportunity to also be online and, and
that boutique has become almost, you

484
00:23:07,561 --> 00:23:11,161
know, a, a retail shipping point, right?

485
00:23:11,221 --> 00:23:13,801
Um, so if you're, if you're
a true online only, right?

486
00:23:13,801 --> 00:23:18,451
You probably have a small warehouse on
the outskirts of town, uh, in the suburbs,

487
00:23:18,451 --> 00:23:22,621
right in, in here, Austin, for instance,
where, you know, space is cheap and you

488
00:23:22,621 --> 00:23:24,311
can put up some shelves and, and you.

489
00:23:24,826 --> 00:23:28,186
Five or 10,000 square feet, um,
not have much in the way of rent.

490
00:23:28,186 --> 00:23:30,346
And that's where you're gonna process
all the orders that coming online

491
00:23:30,346 --> 00:23:33,136
until you're ready to go, you know,
hand it off to an outsourced provider.

492
00:23:33,316 --> 00:23:33,406
Mm-hmm.

493
00:23:33,816 --> 00:23:34,936
. But if you're a retail boutique, right?

494
00:23:34,936 --> 00:23:37,096
It has customers coming in
and out off the street, Right.

495
00:23:37,101 --> 00:23:40,396
Who are buying there, well then you're
still gonna have inventory there.

496
00:23:40,486 --> 00:23:43,786
That's an opportunity then to take orders
from customers from around the world.

497
00:23:43,791 --> 00:23:43,936
Right.

498
00:23:44,536 --> 00:23:49,261
Um, and certainly the covid experience
here in the States drove a whole

499
00:23:49,261 --> 00:23:50,251
lot more adoption to that, right?

500
00:23:50,251 --> 00:23:50,311
Yeah.

501
00:23:50,341 --> 00:23:53,881
There were a lot of Main Street retailers
who, because people weren't leaving

502
00:23:53,881 --> 00:23:57,811
the house, put up a quick website and
said, Great, if you know you want,

503
00:23:57,811 --> 00:24:01,171
whatever it is I sell, here it is,
and we can still deliver it to you.

504
00:24:01,411 --> 00:24:04,771
Um, and so that drove, you
know, more of that adoption.

505
00:24:05,296 --> 00:24:10,096
Matt Edmundson: Yeah, I remember, um,
I, I can't remember what the site I,

506
00:24:10,096 --> 00:24:13,696
the, the site's totally gone outta
my head, but I remember I, a friend's

507
00:24:13,696 --> 00:24:17,416
advisor in Dallas, I wanted to buy them
a present, and I came across a website.

508
00:24:17,421 --> 00:24:20,596
I genuinely, no idea how I came
across this website called, I think

509
00:24:20,596 --> 00:24:23,686
it was the three Nanas, the three
Nans, the three Nanas, the three

510
00:24:23,686 --> 00:24:24,916
grandmas, something like that.

511
00:24:25,476 --> 00:24:28,561
And they just literally
baked cakes, right?

512
00:24:28,561 --> 00:24:29,491
That's what they did.

513
00:24:29,551 --> 00:24:35,431
They baked cakes and they would deliver
these beautiful, uh, cakes, which started

514
00:24:35,431 --> 00:24:37,741
getting some extraordinary reviews online.

515
00:24:38,341 --> 00:24:42,091
And um, and when they realized I was
ordering from a friend, but I was

516
00:24:42,091 --> 00:24:46,011
ordering from the UK, it sparked a whole
chain of emails with these beautiful

517
00:24:46,561 --> 00:24:50,761
nanas who were just distributing cakes.

518
00:24:50,761 --> 00:24:56,896
And I thought, isn't this wonderful that
actually I can, I can get an old fashioned

519
00:24:56,896 --> 00:25:02,056
pound cake from homemade by Nan herself,
you know, and shipped to my friend.

520
00:25:02,536 --> 00:25:05,836
Uh, and I'm having conversations with
her, uh, from halfway around the world.

521
00:25:05,836 --> 00:25:07,576
I thought it was, I thought
it was lovely actually.

522
00:25:08,576 --> 00:25:09,376
Eric Youngstrom: It, it is.

523
00:25:09,376 --> 00:25:13,396
It's, it's amazing the hobbies that
people have and the passions they have

524
00:25:13,846 --> 00:25:15,556
that, that, with the internet, right?

525
00:25:15,556 --> 00:25:19,126
You have this opportunity to see if
you can make that a business, right?

526
00:25:19,156 --> 00:25:19,246
Mm-hmm.

527
00:25:19,576 --> 00:25:25,201
, look, a lot of them don't work, but
the cost of trying is so low that it's,

528
00:25:25,261 --> 00:25:29,521
you know, the opportunities are just
enormous and you know, a lot of them do.

529
00:25:29,931 --> 00:25:31,156
Our lightning in a bottle, right?

530
00:25:31,156 --> 00:25:33,136
And all of a sudden you're like,
Hold on, I got a real business here

531
00:25:33,496 --> 00:25:35,836
and it's something I love to do
and I'm passionate about, and I get

532
00:25:35,841 --> 00:25:37,186
share my passion with the world.

533
00:25:37,186 --> 00:25:40,696
And, and you know, that what's
makes, that makes me super

534
00:25:40,696 --> 00:25:42,496
excited about on Ramp, right?

535
00:25:42,501 --> 00:25:45,766
How we help people with that passion
and we get to help more and more

536
00:25:45,766 --> 00:25:49,246
of those business owners, um, you
know, continue to pursue the growth

537
00:25:49,251 --> 00:25:53,046
that's available to them, um, and,
and help them through that process.

538
00:25:54,361 --> 00:25:57,121
Matt Edmundson: So the clients that
you've had, the sort of the half

539
00:25:57,121 --> 00:26:01,351
millions, 2 million typically, uh, in
turnover, what are some of the things

540
00:26:01,351 --> 00:26:04,081
that you've noticed in those businesses?

541
00:26:04,201 --> 00:26:06,391
Some of the common successful traits?

542
00:26:06,391 --> 00:26:07,861
If, if I can put it that way,

543
00:26:09,721 --> 00:26:18,016
Eric Youngstrom: I think, uh,
I won't put these in any order.

544
00:26:18,286 --> 00:26:20,626
Uh, one, they're really good
at using technology, right?

545
00:26:20,626 --> 00:26:20,716
Mm-hmm.

546
00:26:20,956 --> 00:26:24,616
, So there, there, there are tools at their
disposal that they're taking advantage of.

547
00:26:24,616 --> 00:26:27,256
So if they're, if they do their own
fulfillment right, they're gonna use a

548
00:26:27,256 --> 00:26:32,236
product like a Shipping Easy or a ship
station, um, to make sure that, Right.

549
00:26:32,236 --> 00:26:34,546
That they're just processing
things quickly and efficiently.

550
00:26:34,726 --> 00:26:34,906
Yeah.

551
00:26:34,911 --> 00:26:39,856
Um, and they're letting those tools
guide them in how they do things.

552
00:26:39,856 --> 00:26:41,746
So they're not spending
time making decisions.

553
00:26:41,746 --> 00:26:44,656
They're, they're using the rules and
setting the rules up ahead of time

554
00:26:44,656 --> 00:26:47,776
so that decisions are made quickly
and you can spend as little time

555
00:26:47,776 --> 00:26:49,276
as possible in each of those tasks.

556
00:26:49,456 --> 00:26:49,516
Yeah.

557
00:26:49,606 --> 00:26:52,816
Um, because the most, most
important use of their time right,

558
00:26:53,236 --> 00:26:56,026
is really, I'd say merchandising.

559
00:26:56,051 --> 00:26:59,351
Pricing, um, you know,
and, and marketing, right?

560
00:26:59,351 --> 00:27:01,091
Driving the next sale.

561
00:27:01,271 --> 00:27:01,391
Mm-hmm.

562
00:27:01,661 --> 00:27:05,681
, um, and then followed quickly
behind that would be really

563
00:27:05,741 --> 00:27:07,151
owning their supply chain, right?

564
00:27:07,181 --> 00:27:10,571
Knowing, you know, how do they ring
every cost out of that so that running

565
00:27:10,571 --> 00:27:13,691
efficiently so they can maximize
margin, um, and that they're then

566
00:27:13,691 --> 00:27:15,881
maximizing demand, um, at the same time.

567
00:27:16,421 --> 00:27:21,756
Um, And then I think the other
thing that really makes for a,

568
00:27:21,761 --> 00:27:26,316
a strong, small business is an,
is sufficient financial acumen.

569
00:27:26,626 --> 00:27:30,886
Um, which by the way, financial
acumen changes as your

570
00:27:31,266 --> 00:27:32,026
business gets bigger, right?

571
00:27:32,026 --> 00:27:36,136
There are different demands, um,
where you can really leverage the

572
00:27:36,136 --> 00:27:37,466
different capital sources out there.

573
00:27:37,466 --> 00:27:41,686
On RAMP is, is but one small piece
in the overall capital stack.

574
00:27:41,866 --> 00:27:44,536
And so there are a lot of
different financial tools and,

575
00:27:44,536 --> 00:27:48,766
and using them correctly, um,
is an incredibly powerful thing.

576
00:27:48,771 --> 00:27:53,926
It provides massive leverage using them
incorrectly, um, can actually really,

577
00:27:53,986 --> 00:27:55,336
you know, bottle up your business.

578
00:27:55,396 --> 00:27:55,456
Yeah.

579
00:27:55,486 --> 00:27:57,256
Um, and, and you talked
earlier right about.

580
00:27:57,731 --> 00:28:00,821
You expected kind of 10 to $15,000
a month in sales and all of a

581
00:28:00,821 --> 00:28:02,231
sudden you're hitting 400,000.

582
00:28:02,621 --> 00:28:07,961
Um, rapid growth, um, is actually
some one of those things that actually

583
00:28:07,961 --> 00:28:09,461
puts a lot of people outta business.

584
00:28:09,701 --> 00:28:09,791
Mm-hmm.

585
00:28:10,031 --> 00:28:13,541
, um, because they don't know
how to scale for it, and they.

586
00:28:14,221 --> 00:28:16,741
The capital allocation
gets a little outta whack.

587
00:28:17,011 --> 00:28:19,681
Um, and all of a sudden that
causes problems and bottlenecks

588
00:28:19,681 --> 00:28:21,121
that then stop sales.

589
00:28:21,121 --> 00:28:25,411
And now you've allocated a whole
bunch of money for inventory, but

590
00:28:25,411 --> 00:28:26,521
you're not pushing it through.

591
00:28:26,521 --> 00:28:28,651
And, and now you're oversupplied
on inventory, right?

592
00:28:28,656 --> 00:28:28,821
Mm-hmm.

593
00:28:28,901 --> 00:28:32,721
. So, um, It, it's, it's not
an easy thing to grow, right?

594
00:28:32,721 --> 00:28:35,451
It's a better problem to
have than not having growth

595
00:28:36,171 --> 00:28:36,501
Right?

596
00:28:36,506 --> 00:28:38,551
It's, it's better solve Right.

597
00:28:39,201 --> 00:28:42,321
, but, um, it, it's, it's, it
doesn't come without a cost.

598
00:28:42,321 --> 00:28:42,561
Right?

599
00:28:42,561 --> 00:28:46,461
And that cost is, you know, you have to
be very, very focused and diligent on,

600
00:28:46,551 --> 00:28:48,911
on owning every step of that process.

601
00:28:49,761 --> 00:28:51,601
Or you'll get in trouble.

602
00:28:51,881 --> 00:28:54,821
Um, and so we spend a lot of time
trying to help merchants with

603
00:28:54,821 --> 00:28:58,241
that and, and trying to be thought
leaders with them and, and, you

604
00:28:58,241 --> 00:28:59,531
know, we talk to our customers.

605
00:28:59,531 --> 00:29:03,641
We, we learned over the last 10
years that, um, what's really kind of

606
00:29:03,646 --> 00:29:07,931
unfortunate about the e-commerce industry
for the SMB is so many of the software

607
00:29:07,931 --> 00:29:14,646
products, um, are built and deployed
for SMBs, but they don't treat the SMB

608
00:29:14,651 --> 00:29:17,536
business owner as if they're a CEO.

609
00:29:17,836 --> 00:29:21,556
They treat them as if they're more of
a consumer on steroids, if you will.

610
00:29:21,796 --> 00:29:22,036
Yeah.

611
00:29:22,066 --> 00:29:29,506
And what we try to do is teach our, is
treat our clients as if, if they were

612
00:29:29,506 --> 00:29:33,856
the CEO of a hundred million dollar
business, um, Because we found a way

613
00:29:33,856 --> 00:29:35,716
to do that very, very efficiently.

614
00:29:36,016 --> 00:29:38,356
Um, but that engenders an
incredible amount of loyalty.

615
00:29:38,361 --> 00:29:41,416
It teaches us a lot, and it
lets us be far more helpful than

616
00:29:41,416 --> 00:29:42,406
just saying, Here's some money.

617
00:29:42,676 --> 00:29:44,356
Um, and, and that's our goal, right?

618
00:29:44,361 --> 00:29:48,406
We wanna see these business owners,
you know, become more sustainable.

619
00:29:48,616 --> 00:29:50,116
Uh, we wanna help with their growth.

620
00:29:50,446 --> 00:29:52,336
Um, and it's not our concern if.

621
00:29:53,176 --> 00:29:55,066
If they decide, Hey, half a
million dollars a year is all

622
00:29:55,066 --> 00:29:56,266
I need, that's all I want.

623
00:29:56,266 --> 00:29:57,166
I don't wanna do more than this.

624
00:29:57,166 --> 00:29:59,206
I don't, I don't live to work.

625
00:29:59,236 --> 00:30:00,436
I'm working to live.

626
00:30:00,586 --> 00:30:00,676
Mm-hmm.

627
00:30:00,921 --> 00:30:02,866
. Other people might say,
No, it's 2 million or 10.

628
00:30:03,136 --> 00:30:06,556
And there's also a point where our
clients graduate from us, where

629
00:30:06,886 --> 00:30:10,066
they've reached enough scale that
there's actually more cost effective,

630
00:30:10,366 --> 00:30:12,586
um, solutions from banks and whatnot.

631
00:30:12,586 --> 00:30:15,586
And they're big enough, they have
enough financial history that

632
00:30:15,916 --> 00:30:16,996
the banks can work with them.

633
00:30:17,086 --> 00:30:17,656
Um, yeah.

634
00:30:17,836 --> 00:30:20,116
And then what we do is we help
them transition there, right?

635
00:30:20,116 --> 00:30:23,956
We help them package up all the, the
information that we have about them in

636
00:30:24,186 --> 00:30:27,796
a way that then is very easy to hand
over, uh, so that they can take that

637
00:30:27,796 --> 00:30:29,476
next step in their evolutionary journey.

638
00:30:29,476 --> 00:30:32,776
And, and, um, you know, we're,
we're excited to see that they've,

639
00:30:32,836 --> 00:30:35,836
they've reached that kind of next
stage of, of business success

640
00:30:35,836 --> 00:30:36,976
where they don't need this anymore.

641
00:30:37,876 --> 00:30:41,406
Matt Edmundson: It's interesting you
talk about how you deal with your

642
00:30:41,996 --> 00:30:46,456
customers and how you treat them like
CEOs rather than consumers on steroids.

643
00:30:46,456 --> 00:30:47,596
I like that phrase, by the way.

644
00:30:47,596 --> 00:30:51,736
I'm, I may, well, I may well
steal that, Eric, Uh, please.

645
00:30:51,816 --> 00:30:56,986
But, but it's, um, it's one of those
where actually that, that's just a

646
00:30:56,986 --> 00:30:58,576
golden rule of business, isn't it?

647
00:30:58,576 --> 00:31:01,726
Treat the customer how you would want
to be treated in that same situation.

648
00:31:01,726 --> 00:31:06,016
And, and this is where I see a lot
of e-commerce businesses fail, uh,

649
00:31:06,016 --> 00:31:10,666
is they treat their customers in a,
just like, they're another number,

650
00:31:10,786 --> 00:31:12,586
you know, like in a database mm-hmm.

651
00:31:12,826 --> 00:31:16,276
, um, rather than actual a, a
real person at the end of the,

652
00:31:16,456 --> 00:31:17,596
at the end of the line there.

653
00:31:18,226 --> 00:31:23,566
And I mean, you talked about how
the, how you have done that is, has

654
00:31:23,566 --> 00:31:25,726
created loyalty from your customers.

655
00:31:25,816 --> 00:31:28,516
Um, it works the same way
in e-commerce as well.

656
00:31:28,521 --> 00:31:29,536
I dunno if you've seen that.

657
00:31:29,536 --> 00:31:29,776
Mm-hmm.

658
00:31:29,856 --> 00:31:30,886
, But I just wanted to draw that out.

659
00:31:32,626 --> 00:31:32,836
. 
Eric Youngstrom: Yeah.

660
00:31:32,866 --> 00:31:34,726
That I gave that example earlier, right?

661
00:31:34,726 --> 00:31:39,526
Of the shipping software, helping you
determine how to ship the next product.

662
00:31:40,156 --> 00:31:43,636
But then, you know, you can set up
rules to say, Hey, if I spot a top 10

663
00:31:43,636 --> 00:31:45,946
customer, always do overnight shipping.

664
00:31:45,951 --> 00:31:46,436
Mm-hmm.

665
00:31:46,516 --> 00:31:46,596
, right?

666
00:31:46,596 --> 00:31:48,996
Because that's going, it spoils them.

667
00:31:48,996 --> 00:31:49,276
Right.

668
00:31:49,666 --> 00:31:50,746
Um, in a positive way.

669
00:31:50,746 --> 00:31:51,046
Right.

670
00:31:51,046 --> 00:31:53,956
You're, you're showing them that you
really have, um, that you recognize

671
00:31:53,956 --> 00:31:55,396
who they are in your business.

672
00:31:55,456 --> 00:31:57,256
And even though they didn't
pay for shipping, you made

673
00:31:57,261 --> 00:31:58,336
sure they got it really quick.

674
00:31:59,326 --> 00:31:59,746
Pardon me?

675
00:31:59,806 --> 00:32:00,556
Um, so.

676
00:32:01,246 --> 00:32:02,746
You know, they're gonna
come back again, right?

677
00:32:02,786 --> 00:32:02,986
Mm-hmm.

678
00:32:03,066 --> 00:32:05,086
and they're gonna actually come
in and say, Man, these guys,

679
00:32:05,356 --> 00:32:07,006
you know, they take care of me.

680
00:32:07,546 --> 00:32:08,986
Best customer service ever.

681
00:32:09,196 --> 00:32:11,476
The reviews then start to flow
that word of mouth, right?

682
00:32:11,476 --> 00:32:13,306
Which is so important
to building your brand.

683
00:32:13,396 --> 00:32:13,486
Mm-hmm.

684
00:32:13,836 --> 00:32:18,166
. Um, and, and we just believe the
same thing here, that the more we

685
00:32:18,171 --> 00:32:22,246
can talk to the customers and really
help them, you know, help understand

686
00:32:22,246 --> 00:32:25,366
what their needs are, um, the
better a partner we can be to them.

687
00:32:25,786 --> 00:32:26,776
Matt Edmundson: Yeah, absolutely.

688
00:32:26,866 --> 00:32:27,526
Absolutely.

689
00:32:27,916 --> 00:32:34,996
So you've talked about, um, how
leveraging, um, technology is an important

690
00:32:34,996 --> 00:32:36,886
aspect of being successful online.

691
00:32:36,886 --> 00:32:40,096
You talked about financial acumen
and the constant development of that

692
00:32:40,566 --> 00:32:45,316
actually being, uh, a, a good reason
for being well, a, a reason for being

693
00:32:45,316 --> 00:32:48,076
successful online and understanding
the finances, which I totally agree.

694
00:32:48,081 --> 00:32:49,906
You know, Cash is King at
the end of the day, isn't it?

695
00:32:50,386 --> 00:32:50,536
Yep.

696
00:32:50,776 --> 00:32:55,336
Um, what else have you seen, uh, with
your clients over the last few years?

697
00:32:55,336 --> 00:32:57,166
The ones that are making it, the
ones that are pushing through?

698
00:32:57,166 --> 00:32:58,876
What are, what are some
of the other ideas?

699
00:32:59,581 --> 00:33:03,361
That you sort of gleaned from them,
uh, about successful e-commerce?

700
00:33:04,381 --> 00:33:05,911
Eric Youngstrom: One of the things
that we've seen, and this will

701
00:33:05,911 --> 00:33:08,731
be very specific to the current
economic environment, right?

702
00:33:08,731 --> 00:33:10,711
With with inflation here in the States.

703
00:33:10,711 --> 00:33:13,621
I'm assuming that I actually haven't
tracked kinda what inflation's

704
00:33:13,621 --> 00:33:16,681
doing in the UK, but I'm assuming
it probably Right, Right.

705
00:33:17,131 --> 00:33:17,401
Yeah.

706
00:33:17,551 --> 00:33:24,766
Um, so one of the things we've seen
our business clients doing is, um, In

707
00:33:25,276 --> 00:33:31,726
leveraging promotions, coupons, and
discounts, um, to increase the price of

708
00:33:31,966 --> 00:33:36,226
the product, to reflect what inflation's
doing to their cost to get sold right and

709
00:33:36,226 --> 00:33:37,726
to their cost of inventory and whatnot.

710
00:33:38,086 --> 00:33:45,676
Um, and then using a coupon to allow
the kind of finish price to be what

711
00:33:45,676 --> 00:33:49,246
they would've paid, say a year ago
before inflation really kicked off.

712
00:33:50,326 --> 00:33:52,516
Um, especially coming the holiday
season, you don't wanna go too

713
00:33:52,516 --> 00:33:53,686
crazy raising prices, right?

714
00:33:53,686 --> 00:33:55,456
Cuz you're still trying to get
volume through and you have

715
00:33:55,456 --> 00:33:56,776
inventory you need to move.

716
00:33:57,166 --> 00:33:59,866
Um, and your, some of your
inventory costs, right?

717
00:33:59,866 --> 00:34:02,176
Might be a little bit older because
it's, it's been sitting in that

718
00:34:02,176 --> 00:34:05,716
warehouse since, you know, before
prices got maybe pushed up on you.

719
00:34:06,136 --> 00:34:10,426
But what that's allowing them to
do forward looking is next year

720
00:34:10,426 --> 00:34:13,071
then start reducing the discounts.

721
00:34:13,431 --> 00:34:16,881
But now I'm, instead of that product
being $20, I've become psychologically

722
00:34:16,881 --> 00:34:18,991
used to that product being 25 mm-hmm.

723
00:34:19,076 --> 00:34:22,311
And while I was getting a coupon that
was $5 off and I was still paying

724
00:34:22,311 --> 00:34:24,171
20 when that kind of goes away.

725
00:34:24,176 --> 00:34:24,531
Okay, great.

726
00:34:24,531 --> 00:34:26,931
What's, you know, it'll feel
like it's always been 25.

727
00:34:26,931 --> 00:34:30,081
So it lessens the, the
shock, the sticker shock.

728
00:34:30,081 --> 00:34:30,291
Right.

729
00:34:30,296 --> 00:34:31,971
When the price goes up very, very quickly.

730
00:34:32,301 --> 00:34:34,971
Um, so I think that's been a, a
very clever thing that we've seen.

731
00:34:35,966 --> 00:34:38,366
Some of our more sophisticated users
doing, they're leveraging, you know,

732
00:34:38,366 --> 00:34:39,986
pricing software to do that Right.

733
00:34:39,986 --> 00:34:42,866
And coupon software to do that within
Amazon, within their own sites.

734
00:34:42,896 --> 00:34:43,196
Yeah.

735
00:34:43,286 --> 00:34:46,046
Um, because sooner or later
they're, they're not gonna have a

736
00:34:46,046 --> 00:34:47,816
choice but to raise those prices.

737
00:34:47,856 --> 00:34:47,976
Yeah.

738
00:34:47,976 --> 00:34:49,106
And sometimes, yeah.

739
00:34:49,166 --> 00:34:51,806
You know, how you do that is
really critical right now.

740
00:34:51,896 --> 00:34:54,806
You, you can't also wait and then say,
Hey look, we, we got to inform you.

741
00:34:54,806 --> 00:34:57,686
And there's other ways to do that
in kind of just one fell swoop.

742
00:34:59,491 --> 00:35:04,591
, but I think it's a really interesting
playwright to bring the retail buyer on

743
00:35:04,591 --> 00:35:09,211
that price increased journey while still
rewarding them with discounts and coupons

744
00:35:09,211 --> 00:35:13,771
and promotions, um, and letting them keep
that old price for a while before they

745
00:35:13,771 --> 00:35:15,301
then have to move into the new price.

746
00:35:15,361 --> 00:35:18,511
Um, and so I think that's a, a really
clever thing that we're seeing people do.

747
00:35:18,781 --> 00:35:20,851
Um, that makes just a ton of sense, right.

748
00:35:21,291 --> 00:35:25,701
It, it acknowledges human psychology,
um, and behavioral patterns.

749
00:35:25,791 --> 00:35:29,601
Um, it's rewarding customers for
continuing to work with you, um, but

750
00:35:29,601 --> 00:35:32,661
giving them a chance to get ready
for, you know, the unfortunate reality

751
00:35:32,661 --> 00:35:34,701
of things are just gonna cost more.

752
00:35:34,791 --> 00:35:37,041
Um, that's, that's what
inflation does, unfortunately.

753
00:35:37,461 --> 00:35:39,861
Matt Edmundson: Yeah, that's a
really, that's a really clever

754
00:35:39,861 --> 00:35:41,991
idea and it's a good way I like it.

755
00:35:41,991 --> 00:35:45,411
Of, um, because let's face it, we're
all gonna have to put our prices up

756
00:35:45,411 --> 00:35:49,236
over the next few months, uh, because
inflation is affecting everybody.

757
00:35:49,626 --> 00:35:52,876
We, uh, we were having a conversation
yesterday, one of our online businesses,

758
00:35:52,876 --> 00:35:58,506
the raw material costs for one of our
best selling products has gone up by 40%.

759
00:35:58,866 --> 00:35:59,676
40%.

760
00:35:59,736 --> 00:36:00,006
Ouch.

761
00:36:00,216 --> 00:36:03,916
And you're like, that is
gonna sting everybody.

762
00:36:04,656 --> 00:36:05,136
Uh, yep.

763
00:36:05,136 --> 00:36:08,106
And so, um, will it go up anymore?

764
00:36:08,106 --> 00:36:08,736
I don't know.

765
00:36:08,736 --> 00:36:12,916
We've bought enough
stock, like we're eight.

766
00:36:13,006 --> 00:36:16,546
We, the way it works is we always
place orders like 18 months in advance.

767
00:36:17,476 --> 00:36:20,296
And so I know for the next 18 months
what my price is gonna be, but I

768
00:36:20,301 --> 00:36:21,946
know in 18 months time it's gone up.

769
00:36:22,156 --> 00:36:22,876
Uh, Right.

770
00:36:22,881 --> 00:36:23,836
It's never gonna come down.

771
00:36:23,841 --> 00:36:24,046
Right.

772
00:36:24,046 --> 00:36:26,026
So you have to mitigate
that and think about that.

773
00:36:26,566 --> 00:36:29,356
And I think that's something that
we're all gonna experience, uh, in

774
00:36:29,356 --> 00:36:33,226
e-commerce and, and dealing with that
and bringing those price increases

775
00:36:33,226 --> 00:36:35,656
to customers, I think is gonna
become a bigger and bigger issue.

776
00:36:35,656 --> 00:36:37,741
So, uh, I, I like your idea.

777
00:36:38,631 --> 00:36:38,901
Eric Youngstrom: Yeah.

778
00:36:38,901 --> 00:36:39,707
No, it's interesting, right?

779
00:36:39,712 --> 00:36:42,316
If, if, I guess there's kind
of two follow on points.

780
00:36:42,316 --> 00:36:45,496
One, you know, lumber for building mm-hmm.

781
00:36:45,911 --> 00:36:47,926
, which doesn't really have anything
to do with my e-commerce world,

782
00:36:47,926 --> 00:36:50,326
but it's just one of those things
I was kind of paying attention to.

783
00:36:50,776 --> 00:36:55,306
Um, you know, I, I can't remember
the, the unit of measure, I don't

784
00:36:55,306 --> 00:36:58,606
know, a hundred board feet or
whatever it was, $400 before covid.

785
00:36:58,966 --> 00:37:00,886
It spiked to $1,600.

786
00:37:01,456 --> 00:37:02,936
It's now backed down to 500.

787
00:37:03,161 --> 00:37:05,291
So it's increased over 400.

788
00:37:05,621 --> 00:37:05,951
Right.

789
00:37:05,951 --> 00:37:08,771
But it's not how it just went so crazy.

790
00:37:08,951 --> 00:37:09,251
Right?

791
00:37:09,251 --> 00:37:11,711
It's come back down to something
else and I don't know if it'll

792
00:37:11,711 --> 00:37:15,101
continue to fall or if that's just,
its inflation adjusted new price.

793
00:37:15,191 --> 00:37:15,281
Mm-hmm.

794
00:37:15,941 --> 00:37:18,911
. Um, and so, you know, there are periods
like that where you're gonna see just

795
00:37:18,911 --> 00:37:22,091
wild swings, but things will stay, you
know, kind of settle into a new normal.

796
00:37:22,451 --> 00:37:24,101
And then the other thing
of this, I think is.

797
00:37:24,991 --> 00:37:27,451
You know, inflation's got a
little while left to run yet.

798
00:37:27,571 --> 00:37:28,291
Um mm-hmm.

799
00:37:28,531 --> 00:37:31,861
, I was at a conference the other day
where, um, an economist Don Luskin was

800
00:37:31,861 --> 00:37:35,791
talking about, um, you know, his kind of
forecast is, it's probably got 13 months

801
00:37:35,796 --> 00:37:39,031
left in the, you know, the, the what?

802
00:37:39,181 --> 00:37:41,701
A core adjusted at kind of 6%.

803
00:37:41,701 --> 00:37:41,791
Mm-hmm.

804
00:37:42,211 --> 00:37:46,006
, um, And then, you know, 13 months
from now, because we've stopped

805
00:37:46,186 --> 00:37:49,246
injecting all this money in the
money supply, we should see inflation

806
00:37:49,246 --> 00:37:52,156
back down to the sub 2% level, which
is where the world wants it to be.

807
00:37:52,386 --> 00:37:52,876
Yeah.

808
00:37:52,881 --> 00:37:56,926
Um, and so I think if, you
know, it gives me hope, right?

809
00:37:56,926 --> 00:38:00,646
I hope he's right cuz I can power
through most anything for 13 months.

810
00:38:00,706 --> 00:38:05,236
Um, so, um, it would be great if,
if that's where things end up, um,

811
00:38:05,266 --> 00:38:06,526
you know, sooner it'd be better too.

812
00:38:06,526 --> 00:38:06,886
Right.

813
00:38:06,886 --> 00:38:07,156
But,

814
00:38:08,611 --> 00:38:10,201
Matt Edmundson: But you have
to be realistic, don't you?

815
00:38:10,201 --> 00:38:13,531
And you, you know, this, this
inflation wasn't created overnight.

816
00:38:13,981 --> 00:38:14,721
It was right.

817
00:38:14,761 --> 00:38:17,581
You know, the supply chain
issues that we're facing now

818
00:38:17,581 --> 00:38:18,661
weren't created overnight.

819
00:38:18,661 --> 00:38:21,631
I mean, the, the result of, you
know, several years of lockdown and

820
00:38:21,631 --> 00:38:25,261
pandemic, it's gonna take a little
while to figure it all back out and,

821
00:38:25,351 --> 00:38:26,791
and get the balance again, isn't it?

822
00:38:26,791 --> 00:38:28,981
And so, . Um, you're right.

823
00:38:28,981 --> 00:38:33,331
I think, I mean, I don't, I'm not an
economist, but I, I would say probably

824
00:38:33,331 --> 00:38:35,191
12 to 18 months feels about right.

825
00:38:35,191 --> 00:38:38,461
And you, you, you see these sort of
things come in cycles, don't you?

826
00:38:38,461 --> 00:38:42,271
And so the next big thing, um, I know
you've had it in the states already,

827
00:38:42,276 --> 00:38:45,901
but the, the interest rates going
up and affecting mortgage buyers.

828
00:38:46,511 --> 00:38:50,441
Um, which will affect property prices,
which will affect, you know, amount of

829
00:38:50,441 --> 00:38:54,371
money I have left in my pocket, disposable
income because I'm, my mortgage is now,

830
00:38:54,431 --> 00:38:56,771
you know, 40% more than what it was.

831
00:38:58,001 --> 00:39:00,491
All of these things are starting
to sort of come our way,

832
00:39:00,491 --> 00:39:01,871
which we have to think about.

833
00:39:02,141 --> 00:39:06,101
Um, do the interest rate changes
affect you and your business in terms

834
00:39:06,101 --> 00:39:08,031
of how you finance with your clients?

835
00:39:08,721 --> 00:39:09,121
Eric Youngstrom: They do.

836
00:39:09,226 --> 00:39:09,736
They do.

837
00:39:09,796 --> 00:39:14,866
Um, you know, we have to borrow to
then loan to our clients and, you know,

838
00:39:14,926 --> 00:39:19,486
the Fed fund rate right as it's gone
up, um, increases our borrowing costs.

839
00:39:19,786 --> 00:39:23,356
Um, we've been fortunate that
we've had a little bit of room to

840
00:39:23,361 --> 00:39:24,816
kind of cushion some of that blow.

841
00:39:25,136 --> 00:39:25,236
Mm-hmm.

842
00:39:25,286 --> 00:39:28,886
, um, But we still do have to,
to adjust to reflect that.

843
00:39:29,126 --> 00:39:31,826
Um, and, you know, we have to
pass that on to the customer.

844
00:39:32,156 --> 00:39:36,206
But this is where one of the try
to do is help them work with us

845
00:39:36,211 --> 00:39:37,496
in a very, very disciplined way.

846
00:39:37,856 --> 00:39:44,426
Um, because if you take capital, let's
say for just driving demand, right?

847
00:39:44,606 --> 00:39:44,786
Mm-hmm.

848
00:39:45,026 --> 00:39:49,196
putting it into Google Ads, If you
pay that back over four to six weeks,

849
00:39:49,226 --> 00:39:53,266
the cost is far lower because four to
six weeks later you can come get more.

850
00:39:53,766 --> 00:39:56,161
Versus you come to me and say,
Hey, I want, I want four months

851
00:39:56,161 --> 00:39:57,541
worth of advertising capital.

852
00:39:57,781 --> 00:39:59,581
Well that's gonna take
four months to pay back.

853
00:39:59,581 --> 00:40:01,441
And so that cost has to be higher.

854
00:40:01,771 --> 00:40:01,921
Mm-hmm.

855
00:40:02,166 --> 00:40:03,721
, Um, just the time value of interest.

856
00:40:03,721 --> 00:40:03,871
Right.

857
00:40:03,876 --> 00:40:05,431
How that turns over in compounds.

858
00:40:05,701 --> 00:40:09,271
Um, and so one of the things we try to
help our merchants do is recommend because

859
00:40:09,271 --> 00:40:13,601
we're on demand capital and they can pick
up the phone and call and get more, Don't

860
00:40:13,601 --> 00:40:16,621
take four months worth of, of dollars.

861
00:40:16,621 --> 00:40:16,711
Mm-hmm.

862
00:40:17,071 --> 00:40:19,081
that you're not ready to spend quickly.

863
00:40:19,411 --> 00:40:19,741
Right.

864
00:40:19,741 --> 00:40:22,471
Come back in a month or two months
and get the next batch of it.

865
00:40:22,801 --> 00:40:24,931
Um, and then pay that very, very quickly.

866
00:40:24,931 --> 00:40:28,171
And then we can drastically reduce
the fee because now we don't

867
00:40:28,171 --> 00:40:30,301
have, um, as much time value.

868
00:40:30,501 --> 00:40:31,641
Tied up in that capital.

869
00:40:31,911 --> 00:40:36,711
And so the discipline of how you use money
is, is just such a critical piece, right?

870
00:40:36,711 --> 00:40:42,111
And, and it's, you know, a dollar is
a dollar, but it actually is different

871
00:40:42,111 --> 00:40:43,581
based on who you get it from, right?

872
00:40:43,581 --> 00:40:47,091
That same dollar, like, you know, if
I was Toyota giving you a dollar to

873
00:40:47,091 --> 00:40:50,481
go buy a truck, to run your business
for that on a five year lease, right?

874
00:40:50,481 --> 00:40:51,381
Or five year loan.

875
00:40:51,841 --> 00:40:56,071
I have a different set of expectations
around how that's used and utilized in the

876
00:40:56,071 --> 00:41:00,151
collateral that backs it versus, you know,
Hey, I'm, I'm paying for this advertising.

877
00:41:00,421 --> 00:41:03,721
The collateral is the inventory,
the advertising itself, right?

878
00:41:03,751 --> 00:41:06,211
Once it's been spent, it doesn't, you
don't get another go at it, right?

879
00:41:06,211 --> 00:41:07,531
Unless you have another dollar for it.

880
00:41:07,831 --> 00:41:10,801
But then that dollar's expected
back in a, at a different pace.

881
00:41:10,861 --> 00:41:15,631
Um, but then we can optimize the pricing
around that so that it's much fairer for

882
00:41:15,631 --> 00:41:17,161
the merchant and, and works for them.

883
00:41:17,996 --> 00:41:20,177
That kinda gets back to that
financial acumen piece I, I

884
00:41:20,182 --> 00:41:21,116
spoke about earlier, right.

885
00:41:21,116 --> 00:41:21,356
That mm-hmm.

886
00:41:21,746 --> 00:41:24,866
, you know, leveraging different, you
know, where you get the dollar from

887
00:41:25,556 --> 00:41:29,606
for how it's optimized is actually
gonna give you the most leverage

888
00:41:29,606 --> 00:41:31,796
possible versus misallocate funds.

889
00:41:32,846 --> 00:41:37,981
Matt Edmundson: So if someone's listening
to the show and they, um, Uh, wanna

890
00:41:37,981 --> 00:41:41,791
work with you guys or wanna at least
have a conversation or sort of think

891
00:41:41,791 --> 00:41:44,701
about what, this sounds interesting,
you know, the sort of the capitalization

892
00:41:44,701 --> 00:41:46,171
and the, the, the funding of that.

893
00:41:47,131 --> 00:41:49,141
What are some of the things
that they should think about?

894
00:41:49,141 --> 00:41:51,781
What are some of the things
that they should have in place,

895
00:41:51,871 --> 00:41:54,751
um, for this to work for them?

896
00:41:55,871 --> 00:41:59,656
Eric Youngstrom: One, really critical
to have your accounting in place.

897
00:41:59,926 --> 00:42:04,126
Um, not that you should be spending a
ton of time in accounting, but you should

898
00:42:04,126 --> 00:42:08,536
invest some early time in just setting
up your chart of accounts and your books.

899
00:42:08,806 --> 00:42:11,661
Um, you know, We use QuickBooks online.

900
00:42:11,661 --> 00:42:13,221
I found out to be very, very powerful.

901
00:42:13,431 --> 00:42:16,851
I know it's not quite yet
optimized for product sales people.

902
00:42:16,851 --> 00:42:16,941
Mm-hmm.

903
00:42:17,181 --> 00:42:19,341
versus, you know, people,
services businesses, if you will.

904
00:42:19,671 --> 00:42:22,491
Um, but I know they made a
ton of investment there to,

905
00:42:22,581 --> 00:42:23,751
to really streamline that.

906
00:42:24,081 --> 00:42:28,786
Um, But really getting that dialed in
because when you do that and then you

907
00:42:28,786 --> 00:42:32,296
use a bank, right, that can connect
and so that transactional details can

908
00:42:32,296 --> 00:42:36,256
flow in and your credit cards can flow
in the rules that that has, right?

909
00:42:36,256 --> 00:42:38,326
Just like I talked about the
shipping engine rules, right

910
00:42:38,326 --> 00:42:40,126
around how to ship the next order.

911
00:42:40,486 --> 00:42:45,031
The accounting platforms do that, where
if you invest the time early, You can then

912
00:42:45,031 --> 00:42:47,131
quickly just go in, approve transactions.

913
00:42:47,131 --> 00:42:49,681
They're already allocated
to the, the right buckets.

914
00:42:49,951 --> 00:42:52,681
Um, and then that lets you
really understand the financial

915
00:42:52,681 --> 00:42:53,791
position of your business.

916
00:42:54,001 --> 00:42:57,691
Um, reduces the cost of accounting because
now you're not paying an accountant

917
00:42:57,691 --> 00:42:59,161
to go through a box of receipts.

918
00:42:59,161 --> 00:42:59,521
Right.

919
00:42:59,851 --> 00:43:05,671
Um, and really just gives you the
insight rent then to think about, you

920
00:43:05,671 --> 00:43:10,201
know, how much capital do I need to
drive demand for the next 30 days?

921
00:43:10,206 --> 00:43:10,711
Mm-hmm.

922
00:43:11,441 --> 00:43:14,291
.  and how much capital did I use last
year and, and how much did I use

923
00:43:14,291 --> 00:43:17,951
in August, say, versus November,
right, with the Christmas season.

924
00:43:18,311 --> 00:43:21,491
Um, and then that lets me then think
about, okay, great, I'm gonna need,

925
00:43:21,701 --> 00:43:26,711
you know, that extra 40% lift over
August in November, but this August

926
00:43:26,716 --> 00:43:30,011
was twice last August, which means
that 40% is a bigger number now.

927
00:43:30,121 --> 00:43:30,521
Mm-hmm.

928
00:43:30,701 --> 00:43:34,001
. Um, and so it that allows you to, you
know, gives you a little bit of a crystal

929
00:43:34,001 --> 00:43:39,251
ball into the next kind of 30 to 90
days, if you will, um, to really, um,

930
00:43:40,096 --> 00:43:43,366
You know, smart about the capital needs
of the business, about the demand of

931
00:43:43,366 --> 00:43:47,176
the business you can experience, um, you
know, to make some hedges on that as well.

932
00:43:47,181 --> 00:43:47,266
Mm-hmm.

933
00:43:47,416 --> 00:43:49,936
, um, helps you then understand
your supply chain, right?

934
00:43:49,941 --> 00:43:51,526
And, and how efficient that is.

935
00:43:51,766 --> 00:43:55,846
Um, and so,you know,
e-commerce is a game that.

936
00:43:56,251 --> 00:44:01,441
Rewards or a business rather
that rewards, um, discipline.

937
00:44:01,561 --> 00:44:02,161
Mm-hmm.

938
00:44:02,246 --> 00:44:05,641
and, um, ringing costs out and efficiency.

939
00:44:05,821 --> 00:44:08,881
And so when you, when you
can dial that in, right?

940
00:44:08,881 --> 00:44:11,941
I think you've got a, a huge
lever up versus the competition.

941
00:44:13,021 --> 00:44:15,751
Matt Edmundson: That's really in, I, I
love that statement that e-commerce is

942
00:44:15,961 --> 00:44:17,941
a business that rewards discipline and.

943
00:44:18,766 --> 00:44:22,276
And I, and you are not the first guest to
ever be on the e-commerce podcast to go.

944
00:44:22,546 --> 00:44:24,886
You really need to make sure
your accounting is in order.

945
00:44:25,396 --> 00:44:27,796
Um, we've had a couple of guests on
the show talking about, you know,

946
00:44:27,801 --> 00:44:30,346
if you want to sell the business,
if you want to exit, the first thing

947
00:44:30,346 --> 00:44:31,546
they talk about is the accounts.

948
00:44:31,546 --> 00:44:31,786
Right?

949
00:44:31,786 --> 00:44:35,656
You've gotta, And so this discipline
of doing accounting and doing it

950
00:44:35,656 --> 00:44:40,666
well from day one,  seems like
a bit of a no-brainer to me.

951
00:44:40,756 --> 00:44:43,426
Um, and, and getting that right.

952
00:44:43,426 --> 00:44:45,466
It, and like you say, it
doesn't have to be difficult.

953
00:44:45,466 --> 00:44:49,216
It doesn't have to be involved, but
it, the, the, you can make it right.

954
00:44:49,216 --> 00:44:52,186
And there is software out there like
QuickBooks, you mentioned like zero,

955
00:44:52,186 --> 00:44:54,766
like Sage and you know, all these
different platforms that you can use.

956
00:44:55,486 --> 00:45:02,656
Um, and just keeping on top of that I
think is, is absolutely critical and

957
00:45:02,656 --> 00:45:07,666
I, I'm always amazed how many sort of
smaller businesses just don't know, you

958
00:45:07,666 --> 00:45:09,586
know, the fundamentals of their finances.

959
00:45:10,756 --> 00:45:14,976
Eric Youngstrom: It, it's a, it's
a massive risk that, you know.

960
00:45:15,436 --> 00:45:17,416
Too many small business
owners take, right?

961
00:45:17,416 --> 00:45:18,166
Not spending the time.

962
00:45:18,766 --> 00:45:22,666
And by the way, your first few
months, you will spend in an

963
00:45:22,666 --> 00:45:23,746
inordinate amount of time with it.

964
00:45:23,746 --> 00:45:28,066
But if you actually make that early
investment longer term, you should

965
00:45:28,066 --> 00:45:30,976
be able to do your accounting
in kind of three hours a month.

966
00:45:31,306 --> 00:45:31,396
Mm-hmm.

967
00:45:31,641 --> 00:45:34,786
, Um, you'll probably log into your
QuickBooks or your Sage, right?

968
00:45:35,026 --> 00:45:38,446
Um, once a week to just
approve the transactions.

969
00:45:38,446 --> 00:45:40,876
And if you've set the rules upright,
it's really easy to see, hey, this

970
00:45:40,876 --> 00:45:44,506
a rule has been applied, approve
those, the ones that don't have rules.

971
00:45:44,951 --> 00:45:47,291
Look at each, create
the rule, get it done.

972
00:45:47,711 --> 00:45:50,951
Um, and then at the end of the month,
right, you're gonna spend, you know, kinda

973
00:45:50,951 --> 00:45:54,971
that two, two or three hours time with it,
just reviewing everything, understanding

974
00:45:54,971 --> 00:45:59,621
how the, how the month ended, um, but
it becomes a much easier task, right?

975
00:45:59,621 --> 00:46:01,391
It's, I mean, it's so true
of almost anything, right?

976
00:46:01,541 --> 00:46:04,271
If you invest the time up front to
set the tools up correctly and the

977
00:46:04,271 --> 00:46:08,351
automation's up, then long term, you're
gonna spend a lot less time with it

978
00:46:08,381 --> 00:46:10,541
and have a lot more knowledge from it.

979
00:46:11,971 --> 00:46:13,711
But there's no doubt in
that early stage, right?

980
00:46:13,711 --> 00:46:15,361
It's also nobody likes accounting.

981
00:46:15,481 --> 00:46:15,811
Right.

982
00:46:15,901 --> 00:46:18,271
Um,  nobody, nobody likes accounting.

983
00:46:18,271 --> 00:46:18,931
I don't blame 'em.

984
00:46:18,931 --> 00:46:19,231
Right.

985
00:46:19,231 --> 00:46:21,241
I don't like accounting and
I'm in the finance world..

986
00:46:21,781 --> 00:46:22,021
Matt Edmundson: Yeah.

987
00:46:22,081 --> 00:46:23,371
Um, I'm with you.

988
00:46:24,151 --> 00:46:27,661
I did, um, uh, not many people know
this, but my degree at university was

989
00:46:27,666 --> 00:46:32,101
in accounting, finance, and law, and I
did, uh, three years at uni in accounting

990
00:46:32,106 --> 00:46:36,676
and I, at the end of three years, I
went, I never want to be an accountant.

991
00:46:38,536 --> 00:46:40,966
That was the, that was the
sum total of what I learned at

992
00:46:40,966 --> 00:46:42,166
University ladies and gentlemen.

993
00:46:42,646 --> 00:46:46,336
Uh, but no, I mean, you know, what
it did was it gave me an appreciation

994
00:46:46,341 --> 00:46:49,486
for figures and balance sheets and
to understand how the finances work

995
00:46:49,486 --> 00:46:53,191
and super, super valuable, right?

996
00:46:53,191 --> 00:46:54,481
So yeah, I totally agree.

997
00:46:54,481 --> 00:46:57,691
Invest the time early to get
the accounting done right.

998
00:46:57,751 --> 00:47:00,061
People don't do it cause
it's just not sexy, you know?

999
00:47:00,061 --> 00:47:03,421
Whereas figuring out marketing, you
kind of go, Well that's sexy, isn't it?

1000
00:47:03,426 --> 00:47:04,831
But accounting, yeah.

1001
00:47:05,011 --> 00:47:05,891
It's not really that sexy,

1002
00:47:05,891 --> 00:47:06,171
Eric Youngstrom: But.

1003
00:47:06,496 --> 00:47:09,346
But I will say if you invest that time
in the accounting early, right, and then

1004
00:47:09,351 --> 00:47:13,456
your supply chain early, you'll have a
lot more time to spend on the marketing

1005
00:47:13,456 --> 00:47:16,876
and the promotions and you know, how do
you tweak pricing to, you know, mm-hmm.

1006
00:47:17,116 --> 00:47:17,806
Optimize, right?

1007
00:47:17,876 --> 00:47:21,796
And hey, if I did find a way to reduce
my cost to get sold, do I want to?

1008
00:47:21,981 --> 00:47:25,641
Capture that margin, or can I get more
dollars through the business by reducing

1009
00:47:25,641 --> 00:47:29,691
the price and, and, you know, leveraging
the elasticity of demand on that price.

1010
00:47:29,691 --> 00:47:30,051
Right.

1011
00:47:30,351 --> 00:47:33,081
Um, and you know, my degree was
in economics and an undergrad,

1012
00:47:33,086 --> 00:47:35,661
by the way, so it's actually
applicable to what I'm doing here.

1013
00:47:38,871 --> 00:47:44,731
um, yeah, that was a long time ago,
but, um, but yeah, no, I mean, The

1014
00:47:44,731 --> 00:47:47,572
best thing that a business owner
can do, right, is, is minimize the

1015
00:47:47,577 --> 00:47:49,981
time on all that back office stuff.

1016
00:47:50,041 --> 00:47:50,161
Mm-hmm.

1017
00:47:50,671 --> 00:47:52,621
, but that, you know, that
takes an early investment.

1018
00:47:53,011 --> 00:47:56,071
But once that investment has been laid
down, right, you have that foundation

1019
00:47:56,071 --> 00:48:00,541
laid and now you can go spend the time
on the most value added activities there

1020
00:48:00,541 --> 00:48:05,161
are, which are driving demand, Um, yeah,
marketing, promotions, pricing, right?

1021
00:48:05,191 --> 00:48:09,691
All those different things that are
going to allow that business to grow.

1022
00:48:09,871 --> 00:48:11,711
And it's just a lot more
fun to spend time on that.

1023
00:48:12,271 --> 00:48:13,411
Matt Edmundson: Yeah, absolutely.

1024
00:48:14,356 --> 00:48:17,536
Well, Eric, thank you
so much for all of this.

1025
00:48:17,596 --> 00:48:22,786
Um, as you know, right, this show is
sponsored by the e-commerce cohort.

1026
00:48:22,786 --> 00:48:25,516
I mentioned this at the top of the show,
which is all about coaching and peer

1027
00:48:25,521 --> 00:48:29,486
mentoring and developing and e-commerce,
so you can deliver e-commerce wow.

1028
00:48:30,076 --> 00:48:31,991
So I want you to imagine, right, Eric.

1029
00:48:32,961 --> 00:48:37,411
You're stood in, in a room full of, uh,
the guys and gals who are cohort members.

1030
00:48:37,411 --> 00:48:39,391
You've just delivered your keynote speech.

1031
00:48:39,511 --> 00:48:42,361
Uh, from the stage, the
audience is going wild.

1032
00:48:42,361 --> 00:48:42,721
Cheers.

1033
00:48:42,721 --> 00:48:42,901
Wow.

1034
00:48:43,571 --> 00:48:43,991
Wow.

1035
00:48:44,971 --> 00:48:50,296
Um, you come on, you take a bow and,
um, after, you know, after this sort

1036
00:48:50,296 --> 00:48:54,226
of this conversation, uh, you get a
minute to sort of thank those folks

1037
00:48:54,226 --> 00:48:55,786
that have had a big impact on your life.

1038
00:48:55,786 --> 00:48:59,266
You know, family, mentors, authors,
software, podcasts, whatever it is.

1039
00:48:59,836 --> 00:49:02,476
I'm really curious, who
do you thank and why?

1040
00:49:03,856 --> 00:49:06,886
Eric Youngstrom: Um, well certainly my
parents for just in instilling in me a,

1041
00:49:06,886 --> 00:49:08,566
you know, a desire to be an entrepreneur.

1042
00:49:08,846 --> 00:49:11,206
Matt Edmundson: Were they
entrepreneurs themselves?

1043
00:49:12,286 --> 00:49:12,766
Eric Youngstrom: Uh, no.

1044
00:49:12,766 --> 00:49:18,271
They, well, My dad was a doctor in the old
school vein of you ran your own practice.

1045
00:49:18,601 --> 00:49:18,871
Okay.

1046
00:49:18,931 --> 00:49:22,081
Which has kind of gone away with,
you know, insurance and whatnot.

1047
00:49:22,501 --> 00:49:26,671
Um, but he, that's what he,
he that's the part of being a

1048
00:49:26,671 --> 00:49:27,661
doctor that you like the most.

1049
00:49:27,991 --> 00:49:28,881
Um, I.

1050
00:49:29,236 --> 00:49:34,066
Then, um, you know, I, I thank my wife
right, for just, you know, always being

1051
00:49:34,066 --> 00:49:37,576
there for me and such a, such a supporter
of the, of everything we're doing right.

1052
00:49:37,576 --> 00:49:40,726
And, you know, she's a trooper
cuz startups aren't easy.

1053
00:49:40,731 --> 00:49:42,796
And this is my fourth, um.

1054
00:49:43,176 --> 00:49:46,066
So, she keeps tolerating it.

1055
00:49:46,486 --> 00:49:51,856
Um, and then, you know, from a, from a
business perspective, um, you know, the

1056
00:49:51,856 --> 00:49:53,896
CEOs I've worked with in the past, right?

1057
00:49:54,586 --> 00:49:56,476
You know, taught me so much and mm.

1058
00:49:56,506 --> 00:50:00,436
You know, I, I've kind of viewed
my experience in, in, you know, I

1059
00:50:00,436 --> 00:50:01,846
never founded a business before this.

1060
00:50:01,846 --> 00:50:06,796
I was, I was kind of an very early
employee, but I viewed that as a kind of

1061
00:50:06,796 --> 00:50:11,481
an apprenticeship path to go learn how
to one day really be the founder and,

1062
00:50:11,481 --> 00:50:13,251
and start a business and, and whatnot.

1063
00:50:13,491 --> 00:50:15,831
And it's a different experience
when you are the founder versus the

1064
00:50:15,831 --> 00:50:17,151
guy sitting next to the founder.

1065
00:50:17,156 --> 00:50:17,651
Mm-hmm.

1066
00:50:17,736 --> 00:50:21,201
. Um, but I, I couldn't thank all those
people enough for all they've done.

1067
00:50:21,201 --> 00:50:24,531
Most especially Katie May, who
is our CEO at Shipping Easy.

1068
00:50:24,531 --> 00:50:28,191
And, um, she sits on the board of
On Ramp and has been a fantastic

1069
00:50:28,191 --> 00:50:29,601
mentor to me and the team.

1070
00:50:29,601 --> 00:50:31,341
And, um, yeah.

1071
00:50:31,371 --> 00:50:34,231
So yeah, Katie, Erica, my
wife, and, and my parents.

1072
00:50:34,711 --> 00:50:35,461
Matt Edmundson: Fantastic.

1073
00:50:35,941 --> 00:50:36,991
I'm, I'm with you.

1074
00:50:36,991 --> 00:50:41,641
I kind of, when I started out my career,
I, I knew I wanted to be an entrepreneur,

1075
00:50:41,641 --> 00:50:44,161
but I also knew I didn't have a clue.

1076
00:50:44,371 --> 00:50:44,701
Right.

1077
00:50:44,731 --> 00:50:48,901
And I probably still don't to
be fairo, but, um, I, I sat

1078
00:50:48,901 --> 00:50:50,731
under the expert tutelage.

1079
00:50:50,736 --> 00:50:54,311
I, I, I went and found, I say went and
found, there was a guy who offered me

1080
00:50:54,311 --> 00:50:58,661
a job from my church who was really
nice guy, and I thought, You know what,

1081
00:50:58,661 --> 00:51:00,431
he's an, he's an, he's an entrepreneur.

1082
00:51:00,461 --> 00:51:03,371
I want to be an entrepreneur to
go sit under him for a few years

1083
00:51:03,371 --> 00:51:05,081
and just watch how he does things.

1084
00:51:05,411 --> 00:51:06,491
I'm in my early twenties.

1085
00:51:06,491 --> 00:51:08,321
I didn't have kids, I just got married.

1086
00:51:08,711 --> 00:51:12,281
It made all the sense in the
world to me, you know, And, um,

1087
00:51:12,701 --> 00:51:15,401
still some of my favorite years,
still some of my favorite times.

1088
00:51:15,401 --> 00:51:18,881
And so, um, I, I'm a big fan of
this sort of going and sitting.

1089
00:51:19,621 --> 00:51:21,511
Uh, sitting under people like that.

1090
00:51:22,511 --> 00:51:24,931
Eric listen, uh, thank you so much.

1091
00:51:25,021 --> 00:51:28,501
Um, brilliant conversation about
creating value in e-commerce.

1092
00:51:28,506 --> 00:51:30,181
How do people reach you?

1093
00:51:30,271 --> 00:51:33,241
Um, how do people get hold of you if
they want to, if they wanna reach out?

1094
00:51:34,351 --> 00:51:34,591
Eric Youngstrom: Sure.

1095
00:51:34,591 --> 00:51:36,601
We're, uh, onrampfunds.com.

1096
00:51:36,661 --> 00:51:40,321
Um, you can find us in the web and
then all your favorite social channels.

1097
00:51:40,321 --> 00:51:46,621
Twitter, on, um, LinkedIn, Instagram,
TikTok, look up, look up on ramp funds.

1098
00:51:46,621 --> 00:51:47,911
You'll fight us on all those places.

1099
00:51:48,271 --> 00:51:51,121
And then if you have questions,
um, our phone number is on every

1100
00:51:51,121 --> 00:51:52,751
page of our, our website and app.

1101
00:51:52,931 --> 00:51:54,721
Um, you're, you can schedule time with us.

1102
00:51:54,726 --> 00:51:57,961
We're happy to talk to you and, and
just help, help you run your business.

1103
00:51:58,561 --> 00:51:59,251
Matt Edmundson: Fantastic.

1104
00:51:59,311 --> 00:52:03,811
And we will of course link to Eric and
all the on-ramp stuff in the transcript

1105
00:52:03,811 --> 00:52:07,221
and show notes, which you can get
for free at ecommercepodcast.net.

1106
00:52:07,621 --> 00:52:10,471
Eric, listen, huge, huge thanks.

1107
00:52:10,471 --> 00:52:11,701
Great to meet you.

1108
00:52:11,701 --> 00:52:14,371
Great to talk to you from the other
side of the world in, uh, Austin,

1109
00:52:14,371 --> 00:52:17,131
Texas there, and to shoot the breeze
a little bit about e-commerce.

1110
00:52:17,136 --> 00:52:17,881
I really enjoyed it.

1111
00:52:18,101 --> 00:52:19,136
I, I appreciate you being here.

1112
00:52:20,086 --> 00:52:20,881
Eric Youngstrom: Thank
you so much for having me.

1113
00:52:20,881 --> 00:52:22,171
It was a great, great conversation.

1114
00:52:22,171 --> 00:52:22,951
I really enjoyed it too.

1115
00:52:23,641 --> 00:52:24,361
Matt Edmundson: Ah, you're a legend.

1116
00:52:24,421 --> 00:52:25,111
Thank you, sir.

1117
00:52:25,111 --> 00:52:25,711
Thank you.

1118
00:52:26,251 --> 00:52:28,051
So there you have it.

1119
00:52:28,261 --> 00:52:31,921
Another great conversation
with, uh, my now good friend

1120
00:52:31,921 --> 00:52:33,481
Eric, uh, about e-commerce.

1121
00:52:33,481 --> 00:52:35,371
Thank you so much for joining us today.

1122
00:52:35,701 --> 00:52:39,961
Uh, don't forget, big shout out to
the show sponsor, e-commerce cohort.

1123
00:52:40,171 --> 00:52:45,036
Do head over to ecommercecohort.com for
more information  about this new type of

1124
00:52:45,066 --> 00:52:48,306
e-commerce community that you can join.

1125
00:52:48,726 --> 00:52:52,206
Now, be sure to follow the e-commerce
podcast wherever you get your podcast

1126
00:52:52,211 --> 00:52:56,376
from because as always, we have some
more great conversations lined up, and

1127
00:52:56,381 --> 00:52:58,686
I don't want you to miss any of them.

1128
00:52:58,986 --> 00:53:03,876
And in case no one's told you yet
today, you dear listener, dear

1129
00:53:03,876 --> 00:53:06,096
viewer, are absolutely awesome.

1130
00:53:06,096 --> 00:53:06,666
Yes you are.

1131
00:53:06,666 --> 00:53:08,136
It's just a burden you've gotta bear.

1132
00:53:08,166 --> 00:53:10,661
I've got bear it, Eric
definitely has to bear it.

1133
00:53:10,891 --> 00:53:14,051
We've all gotta bear this burden of being
awesome just the way we've been made.

1134
00:53:14,051 --> 00:53:14,321
Really.

1135
00:53:14,801 --> 00:53:18,221
Uh, the eCommerce podcast
is produced by Aurion Media.

1136
00:53:18,551 --> 00:53:22,121
You can find our entire archive of
episodes on your favorite podcast app.

1137
00:53:22,126 --> 00:53:25,941
The team that makes this show possible
is Sadaf Beynon, Josh Catchpole,

1138
00:53:25,961 --> 00:53:27,671
Estella Robin and Tim Johnson.

1139
00:53:28,091 --> 00:53:30,981
Our theme song has been
written by Josh Edmundson.

1140
00:53:31,251 --> 00:53:32,211
And my good self.

1141
00:53:32,271 --> 00:53:35,661
And as mentioned, if you'd like to read
the transcript or show notes, head over

1142
00:53:35,661 --> 00:53:41,961
to ecommercepodcast.net where you can also
coincidentally sign up to the newsletter.

1143
00:53:42,441 --> 00:53:43,761
So that's it for me.

1144
00:53:43,766 --> 00:53:45,261
That's it from Eric.

1145
00:53:45,261 --> 00:53:46,521
Thank you for joining us.

1146
00:53:46,701 --> 00:53:48,111
It's been an absolute blast.

1147
00:53:48,116 --> 00:53:49,431
Have a fantastic week.

1148
00:53:49,641 --> 00:53:51,381
I will see you, uh, next time.

1149
00:53:51,441 --> 00:54:05,301
So bye for now.