Matt Edmundson: Hello and welcome to the eCommerce Podcast with
me, your host, Matt Edmundson.
Now, this is a show all about helping you deliver eCommerce wow.
Oh, yes, and to help us do just that, we have a very special guest,
Ciara Stockeland, who is the author of Inventory Genius, which I think
is in some respects feels like an oxymoron, but I'm sure it isn't.
I'm sure there is actually some genius in there, which we are going to get into.
Yes, we are.
Now before we do that, let me just say a warm welcome to you.
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com.
Now, Ciara Stockeland is a serial entrepreneur whose businesses
adventures began in her teens, loving this already, leading her to open
and franchise her first store in 2006 with a knack for innovation.
She once created and sold a unique wholesale subscription box for
boutique retailers in just 18 months and now champions inventory genius
through her coaching program which is guiding inventory based business
owners towards profitability.
And when she's not sharing her business acumen she is conquering IRONMAN
challenges with three now under a bell.
Three.
No, that's not cool.
We're going to get into all of that.
And she enjoys.
The serene Tennessee life with her husband Jim and their lovable great
Pyrenees Bentley, which I think is a great name because it sounds very English.
Ciara, welcome to the show all the way from Tennessee.
How are we doing today?
Ciara Stockeland: I am great.
Thank you for having me.
Matt Edmundson: Oh, that's great.
It's good.
It's good to get you finally on the show.
Last time we were supposed to record you on a plane, apparently,
flying from Europe back to the U.
S.
Ciara Stockeland: Yeah, what is it called in the date when you don't show up?
That's what I did to you there.
So I'm glad you were gracious and allowed me to rebook cause I have
been excited to chat with you.
Matt Edmundson: Oh, no, not at all.
The pleasure's all mine.
It's great to have you on.
Now I'm intrigued by some of the things that we read in the bio.
Let's deal with the IRONMAN challenges first.
I appreciate it's got nothing to do with ecommerce.
But why?
Ciara Stockeland: Why?
That is the question.
Why?
Just why?
That's what my mom says.
Just why?
Yeah.
I was no, no sports or athletics in high school or college at all.
So I was music, theater, always interested in small business.
And then when my kids were little, I started running, just doing like 5Ks.
And I did one half marathon with a friend who drugged me to it.
And I said, I would never do that again.
It was horrible torture.
It was awful.
And so the thought of an IRONMAN, like I absolutely know.
We had some friends that had been bugging us for a while, but my husband has
always had the dream of doing an IRONMAN.
So he did his and I thought he can't be the only IRONMAN in the house.
That is actually, so yeah, so I signed up and 16 weeks went from 5K training
to full IRONMAN training, completed my first, and now I've done four, so I did
three, and then I just did IRONMAN World Championships with my daughter who's
18, so your mother daughter there, both competed in Kona at the iconic IRONMAN
race in Kona in October, it's pretty cool.
Matt Edmundson: Wow.
Wow.
I take, I tip the hat to you.
I've not done IRONMAN.
I have done Tough Mudder on a few occasions.
Ciara Stockeland: I'm interested in that
Matt Edmundson: Yeah, that was fun.
Wow, I said fun is a very loose definition
Ciara Stockeland: all of this, yeah.
Is it all fun?
I don't know.
Matt Edmundson: I think you have to be a special kind of lunatic
to do these kind of things.
And so I retired from Tough Mudder a few years, I did it
with my sons a couple of times.
And then after that, I thought I'd done it like three or four times.
And I just didn't enjoy it.
Having to spend four weeks trying to get mud out of places
it should never be, really.
So, hats off, like I say, hats off to you.
Is Jim, the husband, still doing the IRONMAN or is it just,
is it mother daughter thing?
Ciara Stockeland: No.
So he's done a couple.
He officially retired from the long distance in our, we did IRONMAN Texas
together in April and he said he was officially it's a lot of training.
At the peak of my training, I'm 20 hours a week, which is a part
time job and it's just a lot.
He travels for work and so he's backed off now doing half.
So 70.
3, but he still does triathlon.
So the three of us do it.
We have a son as well, who is absolutely not interested whatsoever.
He's building muscles right now.
That's where he's at in life.
So yeah.
Matt Edmundson: yeah, fair play.
Fair play.
I think that's where I've gone to.
I just, I go to the gym still cause I'm a man of a certain age and I need to, but
I'll lift heavy things now.
And that's my lot in life.
I'm trying to keep up with my 18, no, he's 19 year old son.
And it turns out when I try and do that on the basis of strength I get injured a lot.
Ciara Stockeland: Yeah, tweak the back, tweak the knees, tweak the, yeah,
Matt Edmundson: So at some point I have to let go and just go, he's just, he, I hate
to say it, but he is now stronger than me.
Ciara Stockeland: And see Bella, I know, so Bella in racing, she's, when
she first, because I had done IRONMAN first, but she's young and she has an
amazing engine and of course she beat me at championships which is fine and
I knew it, but I can't even keep up with her now when we train together.
Unless we have an easy day.
She just takes off, it is what it is.
Matt Edmundson: It is what it is, and yeah, it's just part
of life, tell me about the subscription box that you had going.
Ciara Stockeland: Yeah.
So I love solving problems.
I like being a disruptor in any industry or wherever I'm at.
And I just saw, there was a rise here in the States anyway, of
subscription box model for consumers like Stitch Fix and things.
And I thought, why?
Why can't we do that for retailers and wholesalers?
Why can't we deliver market right to their doorstep instead of traditionally you go
to market and you buy and all the things.
And so I thought I'm going to fix the problem.
So I launched a subscription box, boutique box that would
connect wholesalers and retailers.
But I knew that I didn't want to build it into a multimillion and
have, employees in a warehouse.
I didn't want to, I don't want my own inventory ever again.
I just help other people with their inventory.
So I built it to sell it and that's what I did.
Matt Edmundson: Very good.
And learned that we've just had on the podcast Sarah Williams,
who's just written a book.
Yeah, on the, and she's lovely, actually, and I'm really
intrigued by her story on this.
I met her at Subsummit.
I don't know if
Ciara Stockeland: I'll be speaking there.
Yeah.
Matt Edmundson: Are you speaking there in 24?
Let's get together because I will be there.
Ciara Stockeland: get to it.
Oh, that's amazing.
I love it.
The world is actually small, isn't it?
Matt Edmundson: Especially in these circles.
Yes.
Yeah.
No, I'm gonna, one of the things I'd love to do, one of the things I'll
be doing at SubSummit is recording.
We record the eCommerce podcast whilst I'm there.
We do it live in front of the audience.
Which is just, it's just great fun.
Yeah, I love it.
Love it.
So we did that last year as well.
So inventory or inventory.
I just lose track of
Ciara Stockeland: It's really fun because when I'm on a podcast
overseas, it's always inventory, which is very cool sounding.
And then when I talk to American hosts, it's inventory, that's what we say.
So we like the way you say it better.
Inventory is very,
Matt Edmundson: Inventory.
I just get confused.
I think I pronounce it both ways now.
Inventory.
So I'm curious here, Ciara, because inventory.
I get IRONMAN in a way, because it's a challenge.
It sounds very challenging and a little bit sexy.
I get building subscription box to sell it.
Inventory, just I don't know.
And I,
Ciara Stockeland: It's another just why,
Matt Edmundson: just why, in one sense, yes, because why?
But on the, in the other sense, I've been in the trenches in eCommerce since 2002,
and I know that this is such a crucial part, and I'm so glad to be talking about
it but I can, I don't know if you've come across this, oh, just why kind of thing
why would you get, so I am curious how you got involved in this side of things.
Ciara Stockeland: Yeah.
So I started my first retail store in 2006, like I mentioned, or like you
mentioned earlier, built it, franchised it, built it to that seven figure.
Like I did what we all want to do, right?
We build it, we have a warehouse, we have a team, we have a corner office.
I did all those things.
I've never paid myself consistently, ended up losing everything
because of some franchisee issues.
Circumstances beyond my control, we ended up losing everything.
And when I was at that low and just looking around what
was the last 10 years for?
Like we invested all of our time.
I started when my kids were little our house was tied to it and now I
don't have anything and here I am.
What was it for?
And I started to really think like, how did this happen, right?
And I had a mentor tell me, things in life happens, a lot of times we can't
control wider circumstances but we do always have to look and see what
portion of that we did contribute to.
And so while I couldn't control what happen with franchises, but I could
control building a business properly.
So what I had been doing was chasing that top line number, right?
I want 13 stores, I want 100 stores, I want a multi million dollar
business, never looking at profit.
And never understanding that I was an inventory based business and the inventory
directly relates to profitability.
So if you chase sales, but don't have good structure and don't understand
the inventory, you, your expenses just go right alongside those sales.
And so when I built the boutique box and the subscription model, I thought
I'm going to do this the right way.
This time, I'm going to pay myself from the beginning.
I'm going to build it and sell it.
I'm going to have a profit from day one.
This is such a lie.
We hear that, Oh, it's going to be five years before you can make money.
Who's who made that up?
That just makes me mad.
And so I did do it right the second time.
And as I was building the subscription box, I started running into all
of these retailers who were asking me the same questions, Matt.
They were like, Ciara, how much inventory should I have?
Ciara, all the sales are coming in.
I don't have any money.
Ciara, how do I get the same questions?
And I knew the answers because I had built businesses before.
And so that's how I got into, to coaching on inventory.
And it's funny because no one, nobody likes to tackle it.
So it's pretty cool.
So again it's a great niche because everybody wants to talk
about social media and marketing and all the fun, sexy things.
And I'm like, let's just talk about the numbers and let's simplify
them and let's get you some money.
And so that's how just ended up here
Matt Edmundson: that's fair play.
And when you put it like that people, everyone's going
that now sounds sexy, right?
Ciara Stockeland: right?
Yeah.
Taking a paycheck sounds pretty good.
Matt Edmundson: yeah, all the people sitting there listening, because we get a
lot, obviously, the audience is massive.
The key is everyone's involved in ecommerce in some respects,
but we have multinational pharmaceuticals listening to the
podcast and we have a lot of people who are starting up and I can just,
all the people that are just sat around the table, doing this as a side hustle
going, sorry, let me just rewind.
You can pay yourself from day one.
When?
I didn't get that memo.
Hang on
Ciara Stockeland: yep.
Matt Edmundson: So inventory.
Inventory, see I'm getting confused already now,
Ciara Stockeland: You do?
Yeah.
Matt Edmundson: Inventory Genius, what's that then?
So the book, the Inventory Genius.
You obviously have been doing the coaching, you decided to put pen
to paper or fingers to keyboards maybe is a better way to put it
these days and you wrote the book.
So what is the key message of the book, if I can ask?
Ciara Stockeland: Yeah, so I was coaching, consulting, working with
clients, hearing the exact same things over and over, solving the same problems.
What's interesting is it doesn't matter if they're 250, 000 a year or 14 million
a year, the solution is the same, right?
There's just more commas, more zeros.
So my framework that I was helping, it was just helping people and
I was hearing these stories.
So I got an email one day and I opened the email and it was from a
client, Jackie, and she said, Ciara, I have to share some good news.
I just paid off all my debt.
And I was like, okay, Jackie, we need to talk because that was
our goal and that was our plan.
But she did it like six months early.
So we got on the phone.
I'm like, Jackie, tell me what happened.
Tell me what you did.
And she's just did the work.
And that got me thinking this framework that I had that had been helping people.
gives them the right work to do because entrepreneurs are not lazy, right?
They're not lazy.
They're not unwilling to work.
They're, they are, I was in the past just doing the wrong type of
work and you never get anywhere.
And so I said, let me write.
The framework into an easy to read book where I can interweave my story and I can
interweave the amazing success stories of my clients and bring that anecdotal
conversation to the table to show people like you can pay yourself and the numbers
don't have to be untouchable scary.
And that's why I did it.
I just figured I could get the message to more people having the book out there, so.
Matt Edmundson: And it just feels like another IRONMAN challenge, right?
I assume.
Ciara Stockeland: Yeah, so I, when I decide to do
something, it, I usually do it.
So I wrote it in probably about the same time as IRONMAN, probably
16 weeks, 12 weeks, wrote it.
Cause then it's okay, now I need to do it.
What am I going to wait for?
Let's just get it out there and get it done.
So I started writing in the fall and then published it by February.
Matt Edmundson: Fantastic.
So what, let's dig in.
Can we dig into your framework?
I'm curious.
What is the framework?
If just give us the headlines and then we'll dig in.
Ciara Stockeland: Framework is such a fancy word.
I like
Matt Edmundson: Oh, I
Ciara Stockeland: because all, yeah, all of the coaches and cause
I like our framework, but it's our
Matt Edmundson: And it's, and we like to say, and my framework is my IP.
I don't know if you, this is my IP.
My
Ciara Stockeland: That's mine.
It's just, yeah, very fancy.
But really, really what it is, it's a profit and loss statement.
That's what I teach through.
So my client, most of my clients have their books done.
They have an accounting firm.
They get reports.
They just don't look at them.
So they put them in a file.
They don't know how to read them.
So really the framework is looking at a profit and loss statement
and a balance sheet and helping to simplify what they are.
So a profit and loss is just a rear view mirror.
It's just going to show you what's happened in the past in your business.
So it's going to show you your sales and it's going to show you, what
the business has done in cash coming in essentially and cash going out.
The balance sheet is a snapshot of your business health at any given time.
So the balance sheet is going to have your assets on the top, cash.
Inventory, so important, how much inventory you have, and your liabilities,
like what you owe other people.
With the Inventory Genius Framework, we start with the sales, and then we
look at our cost of goods sold, which is the cost of the sales that happen,
not of what you purchased in inventory, but the cost of the inventory you
just sold, the difference between the two of them, which is our margin.
We dig into margin first, that's always where I go first, and I can always find
lots of money for people in the margin.
Then we look at what it costs to run the business.
And then the difference at the end of the day, simple math problem.
So once we've spelled this out, then we go back and we have three
levers that we start to pull.
So if we're not seeing enough profit in our business, if we're not paying
ourselves, if we never have cash, we can pull three different levers.
We can increase our sales, which is where everybody always goes, right?
I just need more sales.
I need more sales.
That is a lever we can pull.
But I like to pull the lever of gross margin.
So how can we create more margin?
So the difference between the sales and what the sales
cost, how can we widen that?
And then the lever of decreasing expenses.
So typically people go to increasing the sales or they just cut expenses,
which is great, but you can't build a business by cutting expense.
So we look at pulling those three levers and then we just do it and we
just keep finessing that to create more and more net profit at the bottom.
It's not very complicated it's just math, but I think.
We get stuck in our own headspace and we get stuck in routines of how we do things.
And so I just step in and say I'm not attached to your inventory.
I'm not attached to your people.
Here's what the numbers say.
Let's pull that lever, let's do that thing.
Matt Edmundson: Yeah.
And that it's fascinating, isn't it Ciara, because I think my experiences having
been around the block a few times now when people do struggle with their ecommerce
business, quite often the very first port of call is to say I need to spend more
on Facebook ads or I need to increase my Google spend to go and get more sales in.
I have a particular problem with this theology.
Which is I have no sales, therefore I need to increase my ad spend.
Rarely have I found that actually that's the very first action that
people need to take, but it is a sort of a default thinking.
And what I love about what you're saying is actually, no, first you
need to look at the numbers, guys.
Let's have a look at what actually needs to happen.
We had a chap called Oliver Spock on the podcast from Sweet Analytics.
He came on a few months ago.
In fact, he's done one of the workshops in cohort as well.
One of the things that intrigued me about Oliver, who was the CEO
of The White Company, which is quite a big company here in the UK.
And he took it from 5 million to 60 million during his
tenure in the early years.
The single thing that he focused because he boiled it down to a single
thing is if we want to grow from 5 million to 10 million, I need to
go and get 12, 362 new customers.
Because he understood the numbers, he understood their lifetime
value and he just, he distilled it down to this one simple metric.
How many new customers have I got?
And am I on target?
Yes or no?
And I, the reason I'm enjoying talking to you is because I, and
you've not talked necessarily about new customers, but you are distilling
this down to very simple metrics and actually we can overcomplicate things.
We can look for the answers in the wrong place.
And that's why I'm enjoying what you're saying.
The phrase which made my ears sing was the, I can always find
lots of money in the margin.
Ciara Stockeland: Yes.
Matt Edmundson: Explain that, please, because everyone's going, yes, we would
also like to know the answer to this
Ciara Stockeland: Yeah.
How do we find the money?
Yes.
So that's part of my framework, if you will, or the system that I use is to
continue to simplify down information.
So we look really big picture, right?
What are your sales?
What's your margin?
Okay.
Then we simplify it down.
We pull a lever, we simplify it down.
So when we look at the margin, now we have various levers
we can pull with the margin.
So we can increase prices.
We can decrease what we're paying for things.
So we can start to look at paying in bulk and getting
discounts and things like that.
And we can do less discounts.
So there's different ways that we can find money in the margin.
Most of the time, the quickest money I'll find is in the pricing.
So most business owners are very scared about pricing things.
They look at, I can't raise my prices because of the neighbor.
I can't raise my prices because of this, that, and the other.
So an example, I had a client, she had a Brick-and-Mortar store, and she was doing
all of the right work it appeared, right?
So she had customers, she had a great product, and we just need
to find more money in the margin.
So I said, we need to raise your prices.
I can't do that.
People won't come.
So I said, okay, I want you to do one thing for me.
Just do it.
Do it once.
If it doesn't work, that's fine.
But what you're doing now isn't working anyway.
So just how about you just try my method.
So I said, I want you to mark everything up in your store by 1.
Just everything.
Earrings are 1.
Shoes are, it doesn't matter.
Just 1 for everything.
And then in a month we'll talk.
So she listened, she marked everything up by a buck and when she came back
she told me her sales and so I said, okay, how many units have you sold?
And I can't remember her specific numbers, so let's just make something up.
So she had sold a thousand units that month.
I said, that's 1, 000 extra in margin.
By just marking up everything by 1.
We didn't get more customers.
We didn't increase our conversion rate.
All we did was that, and she was like, wow.
And I said, did anyone even notice?
No, absolutely not.
So we look at that pricing and we look to price based off of our profit goals,
not off of what the neighbors think.
The same thing with our overall sales goals at the top.
Like how can we create sales goals that drive the profit we want
instead of just these vanity metrics.
I want to be a seven figure business.
What does that mean?
Matt Edmundson: Oh, yeah.
So it's an elusive dream to chase, really.
And where this is intrigued, let's dig into this a little bit,
because I'm thinking of there's two things in my head, right?
One is I've mentioned this on the podcast before, and of course, Just
to full disclosure, dear listener, we batch record these podcasts.
So I don't record this podcast like the week it comes out.
You're going to hear it.
A little while after we've recorded it hence the reason you should be
in cohort if you want early access.
But anyway, plug over.
Here's the thing, right?
So at the time that we're talking, we are building a new eCommerce website.
We're going to launch a new product, right?
So we have eCommerce businesses.
Next year we've got three in the pipeline that we're going to launch.
So I've done what you have said in a lot of ways.
I've looked at.
What I want our profit margins to be.
I've looked at the price of our product, compared it with some of the competitors
and because of the way we're going to do our branding, it's not like they can find
that same product because it's our brand.
Do you know what I mean, they can't find that same product on
another website, but I appreciate that you can find similar things.
So I've got to be aware of the competition, but at the same time,
I think if I try and be the cheapest being that's never going to be good
for anybody on any kind of level.
So I can price that as such to create the profit margins that I want.
We have another business, right?
Which I've inherited.
I'm now the MD of this company.
And that was built on the three for two model.
And so every single customer is used to getting products at quite
a substantial discount, right?
Which is like a three for two is, it's horrendous in a lot of ways,
because it just eats, erodes your margin and trying to change that
culture, trying to change that.
It's a bit like trying to plait sand.
I'm not going to lie.
It is complex.
It is painful and it is a very slow process.
So how do you change prices or how would you increase prices?
In that kind of environment, what's your advice to crazy people like me?
Ciara Stockeland: Yeah.
So in that environment, we might go more after like the cost of
what you're, what the goods are.
So my retail concept was a designer outlet store.
So my prices were not high, but I sold volume and I bought volume.
So I was constantly looking at how can I get this not for 10 a unit?
How can I get it for 8 a unit?
Cause that's where I'm going to find my margin.
Depending on the circumstance, that's what I would go after.
Like, how can we really look at if it's a physical product, shipping
bulk buying, discounts, asking, negotiating on the rate side of things.
The
Matt Edmundson: So bring bringing the cost down more than trying to change the
Ciara Stockeland: cost down.
Yes.
Yep.
So that's, depending on what you're selling, that would be, and you can do
that in a service based business too.
We have margins as well.
You're 1099.
How can you bring your costs down, serve the masses instead?
There's ways that you can look at costs in a service based business too, to increase
margin if it's not a physical product.
Matt Edmundson: Okay.
So how do you, let's say, I'm going to look at increasing prices because
I, this is a really interesting topic.
I don't know if we've ever talked about this on the show.
So let's take the three, two out of it.
Let's take out the culture of discount that we have, because I, in one sense, I
suppose I could put a dollar on everything and see if that still causes any grief.
What are some of the tips that you, that as ecommerce businesses, we should think
about when it comes to raising our prices?
Ciara Stockeland: One thing with margin is to really look at true margin.
When I work with a client, they think, products, okay, this pair of jeans
cost me 50, I'm selling it for 100.
My margin is X, right?
But what is the freight in?
What does it cost to get that product to you?
How long do you have it?
How many hands are touching it?
Because products are more and more expensive every
time they get touched to you.
Packet, you unpack it, you do all of these things.
So what's the true cost of goods sold?
And then look at, with ecommerce, look at your shipping.
So a lot of times I'll work with clients and say, what is your shipping policy?
We ship everything for free over 100 in sales.
Okay, what if we would raise that shipping threshold to 125, which would give us
more products on that purchase, right?
Because maybe they have to buy one 50 worth because of our pricing structure.
Could that offset our shipping costs, which would deliver more margin, right?
So you just keep drilling in.
And the problem is if you never look at the numbers.
You never have those levers to pull.
You just look at I don't have money or I'm not making enough money, but there's
lots of different ways to finesse that.
And a dollar here, 2 there, saving on shipping here.
I had a client, she does a, about a million dollars in ecommerce business.
And we looked at her shipping threshold.
She raised it, I think it was from 75 to 90.
It didn't increase her overall average ticket, but what she
spent on shipping decreased.
So more customers are paying or contributing to her shipping,
which increased her margin, right?
It's so fun because there's lots of ways you can play the game.
Matt Edmundson: Yeah, the shipping thing is a really interesting thing
and an interesting little sidestep here because we have done it in the
past where we've given free shipping, you have to order two units, right?
So because free shipping was a big deal several years ago,
you had to do free shipping.
I think what I've noticed now in ecommerce is actually like the new company that
we're going to set up and start running.
It's not default free shipping.
At all.
You have to be a member.
I'm introduce the membership side of it.
So you have to be a member to get the free shipping.
Because what I've noticed more and more is actually people are charging for
shipping, but the price point for getting free shipping is getting higher, right?
So there's a clothing site.
I buy bits and bobs off here in the uk they're like 125 pounds.
That's 150 bucks to get free shipping.
And you get.
You go, I know the margin in these products.
But they obviously have a lot of customers.
They have a lot of repeat customers and now they've actually, ironically,
just introduced the membership thing.
So you get free shipping if you're a member of a certain standing,
for want of a better expression which I think is really clever.
Ciara Stockeland: Yeah.
Matt Edmundson: so you can either use it as a way to, like we used it as a
way to get people to buy two rather than one, because people are like, especially
if your unit price isn't that much.
So if I'm going to pay five
Ciara Stockeland: Get that average.
Matt Edmundson: but the unit price is 15 bucks, you go actually the net cost is 10.
I may as well get that, right?
Ciara Stockeland: Yep.
Matt Edmundson: you find that the unit the average order value goes
up if the unit price is down.
Ciara Stockeland: Another place, margin is thinking about
the discounts you're giving.
So another client I was working with, he does several
million a year eCommerce only.
He had, his prices were fantastic, but he had discounts everywhere, like 10
percent if you abandon your cart, 15 percent if you abandon your cart twice, 25
percent if you used to abandon your cart.
I was like stop, let's choose one discount so that we can actually,
okay, so we decided on I think 10%.
So let's choose one discount.
So that we can factor that into our pricing.
That's real money.
That's margin on the bottom, right?
So that's a place you can find margin.
Waste.
So if you have a lot of returns in eCommerce, like
why do you have those returns?
Can you fix that?
Cause that's margin money too.
All of these places.
And it's just really interesting, especially in clients where they have a
lot of cash and their sales are really good and they're not riddled with debt.
Money just covers stuff.
And so they just, the money comes in and the money goes out.
And so I'll look at them and would you like to keep another
15 percent of that money?
Cause we could definitely do that.
Matt Edmundson: Yeah.
Ciara Stockeland: it's all about drilling down.
Matt Edmundson: it is.
I love it.
I remember once going into, I was doing a consulting project for a
company, pharmaceutical company, international pharmaceutical company.
And I remember going in the CEO's office and saying, listen, if I told
you how you could make another million a year, Without doing a whole great
deal, maybe a 30, 40k investment, can I get 20 percent of that money?
Ciara Stockeland: Yep.
Yep.
Yeah.
Matt Edmundson: was like, no, you cannot, but you can still tell me.
And it's exactly what you said.
All we did, I just went into his warehouse and I watched his staff pick and pack.
And I'm like, if you move the products that people buy more often close
to the pick and pack, you'll get.
You'll send out 20 percent more.
Oh, and by the way, you're sending out 20 percent of your orders wrong.
So just have a scanning system and they'll all go out correctly.
And when we added it all up, it was over a million a year
because of the, but you're right.
When you're making money, you don't really care about efficiency.
Ciara Stockeland: Yeah.
Matt Edmundson: until someone comes in and goes actually your inefficiency
is costing you a million bucks a year.
That's a lot of money.
Even if you're making a lot of money, that's a lot of money.
So here's a question for you then when it comes to discounts.
And again, I'm thinking back to something Oliver said, and I don't
know if he said it on the podcast or whether we subsequently talked about it.
Do you track the amount of discount given, right?
So in other words, if you go, if I go to an ecommerce website and it
says, RRP is a hundred bucks, our price is 80 bucks, today only 75
bucks plus free shipping, right?
And so that their balance, their P& L will say sales is $75 but actually, do
you recall the $75 or do you say, oh, actually,sale was $75 but you gave the $5
discount or even it was a hundred bucks 'cause that was a RIP, but you gave a $25
dis, do you actually track the discounts given or do you just take the bottom line?
Ciara Stockeland: I like to see the information cause seeing the information
helps you make better choices.
So I like to see what were our sales, what were our discounts, what were our damages,
like really what was all into that sale.
And then on the shipping, I see this a lot.
They'll just be one line on them on P& L.
Shipping.
Okay, is that freight in, is that shipping out to your customers?
Because if you're charging your customers, you actually have
income to offset the shipping.
Freight in is part of your cost of goods.
We separate those because I want people to know.
Once you know, you're like, ooh, there's opportunity and there's opportunity.
So I like to extrapolate the data.
Matt Edmundson: Do you just record all of this data in a spreadsheet?
Is there a software that you are using?
How, what if people are wanting to track this where would they go?
Ciara Stockeland: so you're gonna use your POS platform, Shopify or Lightspeed
or whatever that is, to get the basic information, and then it's gonna be put
into QuickBooks or an accounting software.
So and some of my clients have pretty sophisticated
accounting firms that do their.
All of their P& L and it's just very broken out so that we can make decisions.
We plan our goals, the budgeting, that we do is all based off of that.
What are we anticipating for discounts for the year based
off of what we did, in the past.
So we want to be able to see all of that and then just find it.
But you could, if you're just starting out and you don't have an accounting
for, you can record that in Excel.
You could run yourself an Excel spreadsheet.
I think the basic thing is just getting the information either out of your
head or out of your point of sale system and into something that can
give you a tool to make decisions.
Matt Edmundson: Yeah.
You can just look at the numbers simply, can't you?
It's really interesting actually, because we, when we were talking about the new
product, the new skincare brand that we're setting up, the first one, where
we have been able to just determine the prices based on profit margin,
as opposed to the other way around.
What was interesting was we've done similar companies in the past and our
finance controller Michelle, she's just, she's an absolute legend, this lady.
And, like you just loves numbers, spends all the time looking at spreadsheets
and Sage and she came in and said when we launch this company We are
not selling outside of the UK at least not initially and I'm like that's
just wrong because we have America.
It's a massive market Australia We know how to sell to the Aussies and so and
I'm just going no because we've got all these international opportunities
she went, no Matthew we are not selling outside of the UK and I'm gonna tell you
why and it all came down to the numbers.
Fundamentally, when we started, once we've hit a million, two
million in turnover, then fine.
But until then we've not . And it was an, it was a pure numbers based
decision for her based on shipping costs.
The time and energy it takes to do the paperwork for external, for
exports, taxes, the whole nine yards.
She's just it's just not worth it until we hit this number.
And I'm like, that's really clever.
Yeah, looking at the numbers like that, I think it's super, super powerful.
But this for you is all developed and tried and tested in the
trenches by the sounds of things.
This is something that you, it's not a, it's not a college degree where you,
Ciara Stockeland: No, unfortunately, they don't really
teach the real deal, I feel like.
And then looking for the reason, being open and willing to admit
that was a really expensive mistake, and there has to be a better way.
I think a lot of entrepreneurs get very stuck on either, but this is how
I envisioned it, this is how I want it to work, and I'm just going to do
it, I'm going to do it, and they just bang their head against the wall.
Woe is me.
I really screwed up.
It, and neither of those is productive.
So at the end, towards the end of the retail side of things, when I
had my retail brand, I finally found someone who does really what I do
and taught me so much, which I wish I would've had him at the beginning.
And I remember a conversation he had with me and he said, Ciara, just because
you buy something for five and sell it for 10 doesn't mean that you have 5.
And I was like said, no, it costs this much to turn the lights on, this
much to have your people come in, this much for the packing, all the things.
He said, in fact, you probably lose money.
And that was the first time someone had explained that to me.
And it made me curious.
I want to dig in.
I want to understand what would I need to charge it for?
And then how many of them do I need to sell?
Cause we were a volume based business as an outlet store.
Yeah.
And so just learning the hard way, doing things wrong, losing a lot of
money and then doing things right and knowing what that feels like.
And then taking that and hopefully sharing that with other people.
Help them jump to the front of the line if I can.
Matt Edmundson: yeah, no, brilliant.
So bringing this back to what we talked about in the beginning, then, I get that
I need to write stuff down on paper.
Where do I add into this?
The money that I want to pay myself, how does that work?
If I want to pay myself from day one, where does that fit in?
Ciara Stockeland: Yeah.
So we're building a profitable business from the beginning.
So when we set our sales goal, again, it's not that met that vanity metric of,
I want to be a million dollar business.
Here's my sales goal.
Okay.
I write that down.
Here's what it's going to cost to run my business, including my paycheck.
Here's what.
The cost is the fixed, the non fixed, no debt included in this, but
fixed, non fixed, and my paycheck.
Here's what my margins look like, what I think I can get.
Okay.
Does that sales number, and this is just all a P& L, right?
Does that sales number minus the cost of running the business, leave me
with something at the end of the day?
And then you just keep finessing those numbers and you don't settle.
So when I first start working with a client.
I always go through this and I have them do it in a spreadsheet
that I've created and we always, I said, now scroll to the bottom.
I always say scroll to the bottom.
They look at the bottom and all the numbers are negative and I said
why would we build a business with negative numbers at the bottom?
That's just silly.
So we have levers.
Like I told you, we have levers to pull.
We can change sales goals.
We can change, and you just keep finessing that until you say,
okay, this is realistic and it produces a profit and it pays me.
Let's get to work.
Now, how do we get that sales goal and we divide that into, unit level metrics and
average tickets and break that all down.
So yeah, I think it's about stepping back, looking at the big picture, factoring it
in, not being content with where you sit.
Matt Edmundson: Yeah.
Fantastic.
What do you, what's the biggest mistake you see a lot of entrepreneurs,
especially startup entrepreneurs in the eCommerce space make?
There's obviously going to be some common themes here and I'm curious.
Ciara Stockeland: I think two things that come to mind with inventory
specifically is way too many SKUs.
Like Brick-and-Mortar needs to be really wide.
When someone walks into a Brick-and-Mortar, they need to see lots
of options so they can try them on.
ECommerce, in my opinion, and I mean you're the expert so you might
disagree, and that's cool I just think it needs, less is more, right?
Like you want.
I'm going to go to your page and say, okay, this and they, Oh, I want a medium.
Oh, they don't have just one.
And now it's gone.
There's a medium available.
There's a small available.
So just way too many SKUs, like merchandising their eCommerce stores,
like their Brick-and-Mortar stores.
And it's completely different.
And then I think from a financial standpoint.
They take on debt.
So things aren't working.
I need paycheck to cover payroll.
I need, whatever.
So I need cash.
I'm going to get cash infusion and they take capital loans out, which are
super easy to get in the States anyway.
And they're monstrous.
Cash eating loans because they pull daily from your sales which really hinders
cash flow so they get this money in but they haven't fixed the root problem
So the money covers the issue for a while like a band aid But now I have
debt and I'm still bleeding cash now.
I'm an even worse position So instead of figuring out why don't I
have enough money to cover payroll?
They just take cash on and take debt on and take more debt on and then
they come to me And say, help me,
Matt Edmundson: And you're like, you should have come a six months ago.
Ciara Stockeland: I know, if only, that's why I was like, I have to write the book.
Maybe I can save some people, beforehand, but, and I did that.
I took on a lot of debt because I didn't understand How the inventory
works I didn't understand cashflow and I was like if I just got a
little more cash everything would be good and it is for a month or two
and then you're in worse position.
Matt Edmundson: Yeah.
It's interesting.
You say that there's years ago cause my background actually
is accounting and finance.
I don't like to admit it often if I'm honest with you but it is that
was my training finance and law.
One of the things that intrigued me years ago, I did debt counseling,
mainly because I got into debt when I was younger and it was stupid.
And then I got out of it, figured a few things out and
would help wherever I could.
We had this phenomenon.
I don't know what you'd call it in the States, but in the UK, we
called it a debt consolidation.
So you would get like a consolidation line, right?
So you would have say maxed out six credit cards, which were
charging crazy interest rates.
And so you, the theory being, I'm going to consolidate that into one Loan,
which is charging me less interest.
And that overall payment would be less than the six credit cards.
And so on the outside, this sounded like a dream scenario.
You realized you're not getting rid of the debt.
You're just refinancing to make life easier for you.
And what I noticed was.
With everybody that took that kind of loan, and I say everybody because it
practically was, I, there was maybe one or two where it wasn't, but what
happened was exactly what you said.
So you take your six credit cards, you put it into one loan, you feel better
about life because you have more money.
You still have the same debt, it doesn't matter that your, your payments
are lower but they're going to last four times longer but you didn't
deal with the root issue as to why you were in debt in the first place.
And so what would happen is, two years later, when they would come to
someone like me, they would have the debt consolidation loan, plus their
six credit cards would be maxed out
Ciara Stockeland: yeah.
Matt Edmundson: Do you see what I mean?
So the problem would be twice as bad, and actually what you're saying is that
actually happens in business as well.
So you're taking on debt to cover a cash flow shortfall
Ciara Stockeland: of figuring out why there's a cash flow.
Matt Edmundson: Yeah, and it may be that you do need to take on debt, but
it's that relief that comes with it temporarily, which kind of, You just
think, I just need to get my head down now and crack on and we'll just keep,
Ciara Stockeland: Make more sales.
Just make more sales.
Yes.
Matt Edmundson: put more money into Facebook ads, that's
Ciara Stockeland: I was working recently talking with an entrepreneur because
I like the idea of consolidating the debt if you are changing habits.
So now we have a one, 1, 000 payment with low interest,
but we've changed our habits.
We're now marking things correctly.
We're buying things correctly.
We're looking at our financials.
But I was talking to a gal lately, and she did this.
She consolidated it, but.
Isn't working in her business.
They haven't changed.
And she is in the same boat that you just mentioned.
Now she has one payment, but she's still not making the sales and not
making the money 'cause she's not working in there and she doesn't
wanna, so that doesn't work.
Matt Edmundson: No, you're right, it's, the habit has got to change,
the root cause has got to change.
And just to be clear, usually, not all the time, but usually, I'd agree
with you that there are way too many SKUs on a lot of ecom sites.
Ciara Stockeland: Yeah.
Usually.
I think usually.
Matt Edmundson: Yeah.
With the new one, the new company that we're starting, I
think we did have nine products.
I've now reduced it to eight because I felt like nine was too many.
And the reason I took one out was not because it's not a good product, but
it was a different size packaging, which would have meant we needed
different boxes, which would, and there were the knock on costs of this.
Yeah, we reduced it down and I still think it's still a lot, eight really.
Ciara Stockeland: And I was talking a lot.
I'm talking like hundreds, but you've seen those sites where it's oh,
there's 14 pages of things to look at.
We're never going to get to page two.
So yeah.
And then you're stocking all that inventory and that just
Matt Edmundson: Oh, it's a nightmare.
It's a night because it's just cash on the shelf, right?
So, yeah, we could talk for hours about this one particular issue.
Perhaps the biggest mistake that I see entrepreneurs making.
Beyond your, and I agree, there's too many SKUs and taking on debt, I would
say that when it comes to marketing, when we understand terms like ROAS, Return On
Ad Spend, so I spent 100 on advertising and it bought in 200 worth of sales,
so I've got a Return On Ad Spend of 2, actually, you need to incorporate in
that figure, like you talk about with the cost of stock, we have to incorporate
in that figure the cost of those ads, so how much did you pay the agency?
Ciara Stockeland: fee.
Yes.
And the agencies love to say look at this ROAS and I'm like, yeah,
but they cost more than the ads did.
Matt Edmundson: Yeah.
No, totally.
I totally get what you mean.
I've sat in many rooms with many agencies going, look at
this, we've got an amazing ROAS.
And I'm like, yes, but when we include your fee, we're negative, aren't we?
And they're like, no, let's not include that.
It's just, it's a very odd conversation.
Listen great conversation.
Loved it.
And I'm sure that there are going to be people out there that would love to
read your book, maybe get ahold of your.
Coaching Services, and all of that sort of good stuff.
What's the best way to do that?
Ciara Stockeland: Yeah.
I think just come to my website.
It's all there.
All the free resources, the book, the podcast, everything sierrastockland.
com.
Matt Edmundson: Ciara Stockland, and it's spelt for the British people, C I A R A.
Stockland, which is spelt, actually, Stockland is spelt S T O C K E L A N
Ciara Stockeland: D
Yes.
I just make it so hard on everyone.
Yes.
Matt Edmundson: So there's a young lady out there called Ciara Stockland
who is spelt with C I A R A.
Who's just going to get a lot of website traffic all of a sudden,
Ciara Stockeland: That's very
Matt Edmundson: do I buy your book?
And
Ciara Stockeland: Yeah.
Yeah.
I'm not an inventory genius, what are you talking about?
Yeah.
Matt Edmundson: just by the domain name Inventory Genius,
maybe it might be anyway.
But no, that's great.
So that's your website.
You have a podcast.
Did I hear that correct?
Yeah.
Ciara Stockeland: do.
Yeah.
Inventory genius.
Matt Edmundson: And how often are you episoding?
Ciara Stockeland: Every week now since I started it, so two and a half, oh, it
might be coming up on three years shortly.
Yep.
So once a week, it drops on Mondays.
And I do I'll have guests on relating to inventory or I'll talk about
inventory, I'll interview clients.
I try to keep it short and sweet so it's an easy 20, 30 minute listen.
Matt Edmundson: Unlike this marathon of a podcast
Ciara Stockeland: it's not an IRONMAN of a podcast.
That would be.
Matt Edmundson: that's the Andrew Huberman podcast, isn't it?
He's the IRONMAN of podcasts, the two, three hour episodes
which is just fascinating.
Listen, it's been wonderful to talk to you and thank you so much for
coming on and sharing your framework, sharing your IP, your framework IP.
And,
Ciara Stockeland: out in the world.
Matt Edmundson: Yes, it's gone now, I'm going to go write a book about it
Ciara Stockeland: Love it.
Matt Edmundson: but it's been, it has been genuinely lovely to
talk to you, and so thank you for coming on really appreciate it.
Ciara Stockeland: Thanks for having me.
Matt Edmundson: There you have it, another fantastic conversation, huge
thanks again to Ciara for joining us.
Also a big shout out to today's show sponsor, the eCommerce Cohort.
Remember to check them out at ecommercecohort.
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Come join us in the membership.
It's not expensive.
It's 14 bucks or something like that.
I don't even, it's 14 to 20, something like that.
Come join us every month.
It'd be great to see you in there and be sure obviously to follow the
eCommerce Podcast wherever you get your podcasts from because we've got
some more great conversations lined up.
And I don't want you to miss any of them.
And in case no one has told you yet today, let me be the first.
You are awesome.
Yes, you are.
Created awesome.
It's just a burden you have to bear.
Ciara's got to bear it.
I've got to bear it.
Now, the eCommerce Podcast is produced by Aurion Media.
You can find our entire archive of episodes on your favorite podcast app.
And the team, the wonderful, beautiful, talented team that makes this show
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And get all of this good stuff direct to your inbox totally for free.
So that's it from me.
That's it from Ciara.
Thank you
Matt Edmundson: so much for joining us.
Have a super fantastic week, wherever you are in the world.
I'll see you next time.
Bye for now.