5 Tips for Manufacturers Launching Ecommerce Projects5 Tips for Manufacturers Launching Ecommerce Projects

5 Tips for Manufacturers Launching Ecommerce Projects Transcript:

Here are five must-do tips for B2B manufacturers interested in building ecommerce environments, from the podcast episode:

1. Get logistics planning & warehousing in sync 
2. Seek out an “ecomm rockstar” to run your warehouse & inventory
3. Invest time in organizing the warehouse
4. Push to get everything 100% integrated (ERP, IT)
5. Create customer service for ecommerce 

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White. 

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White and joining me today is Carman Pirie. Carman, how are you doing, sir? 

Carman Pirie: I am doing well, Jeff. It’s good to be chatting with you yet again on another fun-filled episode of The Kula Ring. 

Jeff White: Yeah. No, I’m looking forward to this. We’re always really interested in ecommerce and our guest today is a veteran, so I’m stoked to hear his perspective. 

Carman Pirie: Yeah. Look, nothing could be more on-topic these days than ecomm transformation in B2B, which has certainly been accelerated over the last number of months, and I think a lot of people heading into it are really, for the first… Being exposed to ecomm for the first time. So, I’m excited to get some battle-tested advice from the trenches, as it were. 

Jeff White: And there’s always things to learn about this. You can’t find a bigger, hairier kind of project than an ecommerce project, if it’s being born on the web, so there’s always… There’s a lot of warts and wrinkles to work through. 

Carman Pirie: Well, let’s see if we can work through some of them. 

Jeff White: All right, sounds good. So, joining us today is Chris Rice. Chris is the Director of eCommerce, Sales, and Marketing. Welcome to The Kula Ring, Chris. 

Chris Rice: Hey, guys. Good to be here. I’m excited to talk to you guys. This’ll be fun. 

Carman Pirie: Yeah, Chris. It’s really good to have you on the show, and I really should just note that you have a long experience in manufacturing marketing, having led a number of ecommerce business transformations over the years, so I’m really excited to have the benefit of your experience on the show today. 

Chris Rice: Yeah. Thanks. I’ve worked with a lot of electronics manufacturers in the past and started from building the actual website that was just gonna be like a catalogue, to building it into an ecommerce [platform], and then moving it to other places and doing even more ecommerce, and then partnerships in that sense, and just recently was working with a company starting up a completely new ecommerce site for a primarily B2B company, and I think it was a really big company transformation, and I think there’s a lot to be learned and a lot to know as you go into something like that. So, I’m here to let you know all of the warts and wrinkles, as you were saying, Jeff. 

Carman Pirie: We’re gonna peek around all of the dark corners, as it were. 

Chris Rice: Good. 

Jeff White: I think we could find a lot of metaphors for this if we look. 

Carman Pirie: You don’t have to look too hard. I guess… Well, let’s just right off the top, I mean in some ways, I think we’re just gonna talk through a bit of your top five must-dos for getting ecomm underway at a B2B company, and I feel that this is all being very much delivered with the benefit of hindsight, so in some ways, we could probably easily title it the top five things that I wish I knew when I started. But let’s… So, I guess let’s just go through them and speak through each one. 

So, the first one that you mentioned to us in our preshow dialogue was this requirement to really get logistics planning and warehousing teams in on the action and on the same page. Talk to me about exactly what you’re speaking of there. 

Chris Rice: Yeah, so this is one of the things I think people, when they hear the word ecommerce, and they’ve not done it before, they think, “Well, okay, we can support that. It’s not gonna be that big of a deal. We already do truckloads of inventory going out, and we do all these other pieces, tracking, no problem, right?” But then I think what needs to happen is you really need to have a really down-to-Earth conversation, like bringing down to the ground level of what’s going to be happening, and sometimes those people will be very shocked in terms of what you’re asking them to do or asking them to transform. For instance, I was going through, and for the first time, doing a direct to consumer type of site on ecommerce with a company at first, and I said, “So, we need to have the ability to ship eaches.” And they said, “Yeah, we already do eaches.” And I was like, “Wait, I had heard we didn’t do eaches.” Yeah, we ship one case at a time. 

And I said, “No, no, no, no. I mean like one individual piece out of the case at a time.” And they all looked at me cross-eyed, thought I was insane. They’re like, “We can’t do that. Our systems won’t do that. Not gonna happen. We can’t order that way. We can’t plan that way. We can’t ship out that way.” And that was really when I realized that the difficulty I was going to have in trying to make sure that I had everybody aligned, but also not just aligning, but calming their nerves a little bit when they hear something that’s totally out of the box. You have to give them kind of the assurance that you’re gonna walk through step by step and make sure everything’s okay, and usually, they come around. And actually, it’s kind of… It’s good for them when they see that it’s going to be crazy, but you’re there to support them through it, and then let them know that in the end, it’ll be a fun project because you’re gonna be doing something totally new, and it’ll kind of break up the whole monotony of what you’ve been doing in the past. It needs to be an experience that you’re going to have together and work through it, but that’s really kind of why I was saying that you gotta have a real kumbaya with everybody and get them on board. 

Carman Pirie: Man, it sounds like there’s some secret sauce in the middle of that. How do you move those folks from saying, “We can’t,” to, “We just haven’t figured it out yet,” and get them on board? I mean, is it just as easy as having the conversation, or do you have any special tips along that path? 

Chris Rice: You know, I kind of came into it as I’m gonna tear off the Band-Aid and tell them what I’m expecting, but then come back to, “But we can do this and I’ve done it before, and it’s not as difficult, and I know there’s ways to do it. We just have to work together through it.” I think if you tell them you just want them to do it, that makes them nervous, because they don’t have any competency in it and they don’t want to fail, right? Which, nobody wants to fail. And so, I think if you can… That’s why I put in my notes, I have logistics planning and warehousing because all of them need to know that they’re all in it together, otherwise, they’re gonna think they’re on an island, so it was kind of bring them all together and have the conversation at once, kind of rip the Band-Aid off, but then also talk to each people’s… Their responsibilities and their role in the process. 

And then take on some heavy lifting yourself. It helps them kind of build that trust that you’re not gonna just force them to do something they don’t know how to do. 

Carman Pirie: I can’t help but think that this point is connected to your next one around seeking really that one dedicated rock star, if you will, to be in charge of the eCom warehouse, inventory, pick and pack process. I guess how did you go about finding that person, and tell me precisely what you had them in charge of. 

Chris Rice: Sure, so when I was working… So, one of my best partners in this transformation was our warehousing manager, who oversaw all of the warehouses in the area where we were at, like all the Northeast corridor, and he and I worked really hard and I said, “Listen, I’m gonna need somebody to run the warehouse.” From day one, it’s gonna be one person initially, just to kind of get things set up. Then we can start building a team off of that, but I need that one person that I can lean on really heavily, and what they need to do is they need to be able to organize the inventory. They need to protect the inventory, which is going to lead me to another point later, and they need to really be willing and open to really being a team player with regards to a totally new way of doing business. So, we actually, I asked him, “Let’s hire somebody from outside the company because I need somebody with a mindset that isn’t what the company is thinking right now. It needs to be somebody who has either done it really before or has done something very similar in terms of a pick and pack process.” 

Because that’s the key sauce to really making it. For us, it was direct to consumer, so it was really important that the presentation was right, but also that mistakes aren’t made, that orders aren’t messed up, because that’s really where the ecommerce thing goes sideways. If you don’t have somebody who’s in charge to really make it seamless, make it a customer service experience almost every time they take a package and put it off to UPS or USPS, that’s just super, super important, so you need really one person you can really lean on to be almost the last touchpoint between you and the customer. 

Jeff White: Did you find at all that having this person on the logistics end was also really helpful in terms of getting the C-suite on board? Like, “Look, don’t worry about the logistics side. We’ve got Bob over here; he’s got it covered.” Was that useful? Or did you even really talk about that when kind of presenting this to the higher-ups? 

Chris Rice: First of all, it’s funny you said Bob, because his name was actually Rob, which is funny. One letter off. But you know, he was really key, and I think to your point, we would take… We took the President and the CEO of the company through the warehouse after we’d set everything up, and to have somebody who’s got a real go-getter attitude, who’s got a really great demeanour and really willing to take on lots of things, but also not seem stressed out and not seem worried about things, it really sets that person that’s in charge at ease, knowing, “I think we’ve got somebody here who is gonna be the last person to touch the product, and they’re calm and relaxed and they can do this, and they feel comfortable. That means that it’s trickling down the right way.” I think definitely a big factor in terms of trust and making sure it takes off the right way. 

Jeff White: What’s the… I mean, we all know that the magnitude of an ecommerce build is significant. Not just the web portion and the back-end software portion, but what, in your experience, how big of an investment is the getting the warehouse ready, getting that side ready? Is it equivalent to what you might spend kind of getting the technical resources in order? Or is it larger? Smaller? 

Chris Rice: In some ways, larger, because it takes… It’s a big decision, right? If you start with the ecommerce side of things, it’s basically just software and things like that, right? It’s not physical pieces yet, right? Once you start ordering inventory and start putting stuff in a warehouse, that’s real. It’s a serious commitment because it’s not just gonna disappear if you want to turn a switch, right? It stays where you put it unless you move it or get rid of it. 

So, I think that’s when the reality really hits everybody where you’re at and what you’re trying to do. So, yeah, I think to your point that for me that was probably the biggest thing to really get people to invest in, and really, and by invest in I mean monetarily, but also I think just a resource perspective. It becomes a big piece of what you’re doing when you actually get that stuff physically in a warehouse. So, yeah. 

Carman Pirie: I love the honesty in that statement, just the, “You know, once you get this stuff, once it’s physically here, then you need to deal with it, and that’s a commitment.” It brought it home very visual to me, so thank you for that. 

Chris Rice: Sure. 

Carman Pirie: In addition to that, you have to account for it and you have to have the back end processing associated with the ecommerce environment that you’ve deployed, and one of your big pieces of advice here is that you kind of have to have that 100% connected from the onset, you know? I guess, now is that a bit of a once bitten, twice shy in having tried to stage that type of deployment? Or I guess what informs that? 

Chris Rice: Yes. That is definitely a burned once, not gonna get burned again kind of situation. Going in, I had to make some concessions when that first line I was talking about, logistics planning, warehousing, and even IT, I would include in some of those aspects, as well. IT was like, “Look, we’re not spending the resources to put together our entire ERP connected to your website. It’s too many resources, too expensive, and it’s too complicated, and so I said, “Okay, we’ll do it in a manual process, kind of push things around,” and then we started doing some data feeds and the amount of hours that I spent trying to reconcile inventory, sales, promotions, sales tax, shipping costs, shipping, like sales of actual shipping from customers. It was mind-boggling, and I can just say the best thing you can do is push to get everything connected 100%. If you’re a larger company, it requires that you have an ERP system in place to transmit sales information, inventory information, get it all connected at one time. Do whatever you can to do that before you launch the site, because if you don’t, you’re gonna run into so many reconciliation problems with finance, your IT department trying to reconcile sales. It’s just a bear that you don’t want to deal with. 

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Carman Pirie: Yeah. Actually, it’s interesting, I’m working with a marketer now who is leading an ecomm initiative, and it was a question whether or not accounting and finance were going to come along for the ride. And so, it’s interesting to hear your commentary through the lens of her experience. And it’s funny because I do think sometimes a lot of marketers will say, “Well, okay, then we’re just going to deal with it and then we’ll fix it later.” And-

Jeff White: Not hard to tell that they’re not the people who are in charge of the actual money. 

Carman Pirie: Yeah, but I mean at the same time, you know, I admire that at least it gets it done. Like it starts the process and then creates the pain, but man, it creates a lot of pain, and it can just be avoided if people just recognize the importance out of the gate. 

Jeff White: I think it could deep-six the entire thing if that… if it fails. Once products start going out the door, if we can’t stay on top of it, and we know that the integration of an ERP is going to be a significant technical hurdle in most cases of integrating with ecomm, so if you start without it, plugging it in isn’t something that’s going to happen overnight. 

Chris Rice: Yeah, that’s right. I think that’s… I felt like there was gonna be concessions somewhere, but I think I should have realized that that would not be the one that I should have taken. So…

Carman Pirie: That’s great advice. That’s great advice. Your next piece of advice that you offer is one that you alluded to earlier in the conversation around ecommerce inventory and the requirement to treat it separately. So, this is threaded through the ERP conversation, as well, I suppose for that matter, but I guess talk to me about that. 

Chris Rice: Yeah, so this is a piece… So, a lot of times, when you’re going to start an ecommerce site, obviously you’re gonna take inventory from regular sales, either direct to your… to let’s say a larger corporation that you’re selling to if you’re doing B2B sales. Whatever it is, you need to kind of quarantine off… That’s kind of a bad use of terms of right now, but you need to section off your ecommerce inventory and leave it alone and not let anyone touch it. And this was actually one where I had been bitten in a previous situation and decided that I was gonna do… Hell or high water, I needed to save this inventory, not let anyone touch it. And so, I really took the inventory in, guarded it, and literally would not let anyone take it. The ERP system didn’t even recognize it. I told them, “We’re not gonna show it as anything that they can touch.” I made IT basically say when the inventory goes into this virtual warehouse for ecommerce, no one can touch it unless they’ve gotten approval from one of us on the ecommerce team. 

Because I felt like it’s so important. A lot of times, they’re very shortsighted in the view of the inventory, because ecommerce is a totally different way of selling. It’s small pieces at a time. And if you’re selling, you’re sending out huge truckloads, maybe three, four truckloads of goods to a customer, and you’re like, “Well, I’ve got about six or seven pallets that are sitting in that ecommerce warehouse. I’ll just take it. They’re not using it. They’ve had it there for like two months, three months. Forget it. I’ll take it.” But if they do that, they don’t realize that basically ecommerce is like one of their customers. And you have to think of yourself as the end customer, just like they’re thinking of the person they’re shipping their four truckloads to as their end customer. 

I don’t know if that makes sense in how I explained it, but I think it’s super important to try to change that mindset and just hold your inventory. 

Carman Pirie: Well, and it recognizes, of course, the importance of actually having inventory as part of that customer experience that you’re trying to create, getting a B2B organization to think about it through that, from that side, I guess would maybe be a muscle they haven’t flexed. 

Chris Rice: Right. Right. And I think that’s the part, is that they’re not used to seeing inventory sit in their warehouse for maybe three, four, five months, and dwindling down little piece by little piece. They just want to get rid of the whole lot at one time and then shift in a whole other point. 

Jeff White: Well, that has to be… It certainly is a mindset shift, and it means also establishing probably very different KPIs on what success looks like in terms of volume of sales, and number of shipments, and all of those kinds of things. How much work were you doing once the ecomm platform was up and running to communicate the level and degree of success?

Chris Rice: Well, I mean that’s always a difficult thing to communicate with folks because I think once you’re starting something off, you have to really level expectations in terms of A, what are you expecting, and what can we deliver, and then how are we delivering on those expectations and what’s the timeframe for everything? It can be sometimes difficult conversations to say, “Hey,” the person you’re speaking to, the President, whoever it is, “We have this expectation that you said we were going to meet,” and you have to really level set them what those timeframes are and what to expect with it. 

Jeff White: I think it’s also… Your fifth point about this is kind of turning it in the other direction and looking outwards and customer-facing, and you’re suggesting that you need to have a really great customer service rep, and I’m assuming that this is entirely so that you can have… get good reviews, get all of the things that you need in order to be successful in ecommerce. They start and stop at the customer’s impression and experience, and if there’s a problem, this can be one of your most important people, probably as much of a rock star as the person you have in logistics, wouldn’t you say? 

Chris Rice: Yeah. So, this was a piece that I think is super important, especially when you’re talking with B2B. B2B customer service is basically… They’re processing orders. If there’s a problem, it’s usually an order-wide problem, like a, “Hey, we had a truckload that was late. Didn’t get delivered on time, so now we’re not gonna pay you this.” Or the payment came in, the invoice came in two days after the month, so we’re not paying it until the… Whatever it is, those problems are usually order-based, right? 

Customer service with an ecommerce site is usually… It’s a product. It’s product information. It’s really knowing the product. It’s really understanding how to describe the use, the uses of the product, even if you’re talking a B2B situation. You need that customer service rep to be more friendly and knowledgeable in terms of the product, but also be able to then have different conversations than normal customer service for like truckloads of product. Somebody who can just sit down and have a conversation with somebody, and talk them through why they should purchase these products and what the product offering… Why it’s better, why it’s good, how it can fit their needs. I think that’s really important. 

Carman Pirie: It’s interesting to think that yeah, the kind of type of service that’s being delivered and the types of problems they’re addressing are just fundamentally different, so you can’t just hand over this new B2C customer service experience management to the folks that do it on the B2B side. They just don’t think about those things in the same way. I love that description of order-wide problems versus product-based information problems. 

Chris Rice: Yeah. Well, I mean a lot of times a B2B company has a whole sales force that’s interacting with their customers who are the buyers, right? The buyers that are purchasing the product. But when it comes to ecommerce, you’re talking directly to that buyer, so your customer service rep needs to be almost trained as a salesperson almost, to talk them through the product, to understand the product, and kind of the benefits of the product. And even cross-sell them or show them, “Hey, you know what? That product you’re asking for, it’s good, but we have a better one, and maybe it’s cheaper. Or maybe it’s just easier to use in your situation. Let’s talk over that product.” It really has to be a different type of customer service rep than you’re probably going to have in a regular B2B type of situation. 

Jeff White: Did you find that you needed to pull them from a different place? Like maybe they’re not just coming from your account managers and BDRs, but you’re actually hiring specifically for that role?

Chris Rice: If you can do that, that’s ideal. Absolutely. That was another piece that we didn’t push on too hard, that I think in hindsight would have wanted to push on harder. 

Carman Pirie: That’s a fantastic perspective, and Chris, I just thank you so much for sharing your experience today. I love that we’ve just had a fairly extensive conversation about must-dos in creating an ecomm environment, and none of them had to do with the actual digital side of it really at all. We didn’t talk once about building the site, which for guys that talk a lot about building websites, it’s kind of refreshing. 

Chris Rice: Yeah. Well, we can do that again another time. I’m more than happy to. That’s a whole nother story. 

Carman Pirie: Yeah. We may just take you up on that. Well, thanks so much for joining The Kula Ring today. It’s been a pleasure. 

Chris Rice: Yeah. Carman, Jeff, thanks for having me. It was great. Thank you. 

Jeff White: Thank you. 

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