This E-Com Pro Tells Why You Might Be Ready for Your Own Platform – 237
For entrepreneurs selling online, there comes a time when it’s tempting to think about developing a platform that offers both more control and the possibility to tailor your selling environment to more closely suit your business agenda.
Here’s the trouble. Often times e-commerce sellers are at a point with their business that a “Shopify” model is a little bit too basic, but they’re not quite at the “Salesforce” level. That’s where mid-level e-commerce selling platforms such as Miva comes in.
Today on the AM/PM Podcast, Tim Jordan welcomes Rick Wilson, the CEO of Miva, a SaaS ecommerce platform, to tell us more about what kind of e-commerce sellers might most benefit from a mid-level platform. Rick says that Miva was built to help businesses increase
sales, cut costs, and grow revenue.
In 2007 Rick was part of the team that acquired Miva from its parent company, and by 2009 he had orchestrated Miva’s conversion to a SaaS platform. Miva now serves both small to mid-size businesses as well as a growing list of enterprise level clients, together generating over $5 billion annually in online sales.
Have you been wondering what to do with your rapidly growing e-commerce business? This next 45 minutes might help you find the answer you’re looking for.
In episode 237 of the AM/PM Podcast, Tim and Rick discuss:
- 02:45 – Where Does a Mid-Market E-Commerce Platform Fit In?
- 04:30 – How to Differentiate Between a Platform and a Market
- 06:30 – The Benefits of Working with Your Own Platform
- 09:30 – The Power of Demand Aggregation
- 12:30 – Dancing with the Dragon
- 16:00 – Taking a Closer Look at Shopify
- 18:00 – What Do Good Sellers Get Right?
- 21:00 – How Shopify is Capitalizing on Impulse Buying
- 24:00 – What Are E-Commerce Businesses Getting Wrong?
- 28:00 – Navigating Multiple Pay Channels
- 31:00 – Build it to Sell It
- 34:00 – When Are Businesses Ready for a Mid-Level Off-Amazon Platform?
- 40:00 – Complex Not Complicated
- 44:00 – How to Contact Rick
Enjoy this episode? Be sure to check out our previous episodes for even more content to propel you to Amazon FBA Seller success! And don’t forget to “Like” our Facebook page and subscribe to the podcast on iTunes, Google Play or wherever you listen to our podcast.
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- Freedom Ticket: Taught by Amazon thought leader Kevin King, get A-Z Amazon strategies and techniques for establishing and solidifying your business.
- Ultimate Resource Guide: Discover the best tools and services to help you dominate on Amazon.
- Helium 10: 20+ software tools to boost your entire sales pipeline from product research to customer communication and Amazon refund automation. Make running a successful Amazon business easier with better data and insights. See what our customers have to say.
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Transcript
Tim Jordan: When it comes to e-commerce, there’s a big conversation happening about marketplaces versus platforms. Today I get to interview the CEO of what he calls one of e-commerce best kept secrets. It’s a platform called Miva that literally facilitates billions of dollars of sales a year. And you may never have heard of them, but we get to break into his mind as he pulls out his crystal ball tells us a little bit of e-commerce and also how we can be making that transition from a small startup business to a more legitimate, more robust, more self-sustaining e-commerce business. I hope you like this episode. Stay tuned. It’s going to be a good one. Here we go.
Tim Jordan: Hi, I’m Tim Jordan. And in every corner of the world, entrepreneurship is growing. So join me as I explore the stories of successes and failures. Listen in as I chat with the risk-takers, the adventurous and the entrepreneurial veterans. We all have a dream of living a life, fulfilling our passions, and we want a business that doesn’t make us punch a time clock, but instead runs around the clock in the AM and the PM. So get motivated, get inspired. You’re listening to the AM/PM Podcast.
Tim Jordan: Hey, everybody. Welcome to another episode of the AM/PM Podcast. Today, we are talking again about e-commerce. I know that in the past several episodes, we’ve kind of deviated away from actually talking about e-commerce and had more messaging and content for e-commerce sellers. But today we’re going back to the nitty-gritty hardcore kind of tech nerdery. I don’t know how you describe this. So today we have my buddy, Rick from Miva. Miva has been around a very long time, but you might not have heard about it. So, Rick, we’re glad to have you here glad for you to be able to introduce us to Miva and be able to bring us some really good insight.
Rick: Well, Tim, thank you so much for having me on the show today.
Tim Jordan: So tell everybody what Miva is. Like, give us the five minute elevator pitch, so to speak.
Rick: Sure. So Miva is a mid-market emerging enterprise e-commerce platform, the shortcut to explaining what it is, is we’re similar to say a Magento or big commerce enterprise, even some level to Shopify plus, but we really play on the more complex side with the big commerce enterprise and Magento type product.
Tim Jordan: Got you.. So when I think about like the e-commerce roadmap, I come from the Amazon space, right? So I think of like selling a few things on eBay and arbitraging and then selling on Amazon and then maybe the next step up is to start selling on Shopify, which is fairly plug and play. And then, your bigger brands are all using big commerce, WooCommerce, Magento, like these huge platforms. And I’m really not super familiar with these other platforms. So I’m looking forward to you educating me here. But when I think about something like Shopify, it is labeled as easy, right? Like anybody can set up a Shopify store. And then when I think about like Magento, my head explodes because I need a hundred people on a dev team just to put this thing together.
Rick: Yup. That’s correct. And we’re somewhere between those two places.
Tim Jordan: So I assume that you’re going to tell us there is a place for something more robust than Shopify, but obviously easier than the big ones.
Rick: Yeah, I would. Yeah, that’s exactly right. Shopify is easy to use by any standard definition, any commerce platform is fundamentally. It’s like a content management system. I mean, everyone in the world is familiar with WordPress. At least you are built a website. WordPress is a CMS or content management system for a non-e-commerce site. And all of the platforms you’re mentioning Shopify, big commerce, Miva, Magento, Woo. Even though Woo plugs into Word, we are all ultimately content management systems for e-commerce. And by that it’s a catalog management system. You put in all your products. And then this is the thing that displays your webpages, calculate shipping calculates tax, connects to your fulfillment center, et cetera. So it does all the heavy lifting behind the scenes.
Tim Jordan: I got you. It makes total sense. So when we think about where we’re using the word platform, I want to back up just a second. We’re talking about platform and in the world of e-commerce, there’s kind of two key players in the game. There’s platforms and there’s marketplaces. All right. So a marketplace just spitting some names out would be that Amazon Walmart, eBay, and then a platform is it’s different. It is like you said, a content management system where you basically have to build your own site, your own hosting. And the way I differentiate my head and I want you to school me here. But the way I differentiate is a marketplace is somewhere where there’s already existing traffic. And I’m posting my products, a platform as a tool that I use to create my own site where I have to bring my own traffic. So I differentiate based on traffic. But if I asked you, what’s the difference between a marketplace and a platform, how would you define it?
Rick: Sure. I think you’re starting the right spot. I think a marketplace, if you think of retail like traditional retail, right? There’s some great analogies there. So if you have just a standalone store, I go build a store in a building that’s like having your own e-commerce platform or custom e-commerce platform. If I go to a mall where I still have to lay out my store and design my store, but I’m in a bunch of other stores, that’s kind of like what a Shopify or Miva does. And then if you go to say a flea market or swap meet, like what? Amazon, eBay, Etsy, et cetera do, they drive in the foot traffic. They tell you where your spot is. You get a 10 by 10 little spot, you throw up a table, but pretty much every booth at a swap me. It looks the same. And same thing with Amazon. Every store on Amazon looks the same, but what they are doing, the heavy lifting, they’re driving the traffic to your page and they’re creating the demand generation. That’s also why they get to charge so much more money than say a platform.
Tim Jordan: I got you. So makes complete sense. And obviously there is a lot of advantage to having your own platform than like using a marketplace. What would some of those advantages be?
Rick: So, yeah, like, one of the things I know you and I have talked a few times, and you talk about people who get started, they retail arbitrage to have access to some inventory. For someone like that, you are going to start on a marketplace. There’s no, where else would you go? Right. You got to have some balls to come look at your product. But the advantage of having a platform are at some point, if you’ve built a brand, that brand has its own built in traffic. So, if I want to– if I’m into, I’m not a female Yogi, but if I was in the Lululemon, right, I would have a desire as a Lululemon brand loyalist to go to Lululemon stores or Lululemon website and see what they have. Right. I don’t need Amazon to drive me to the Lululemon website and Amazon to take their cut. Right? So the advantages of a platform are a few things. First, the costs are significantly less. Those costs are often transferred into traffic. But if you have a big enough brand or a repeatable enough brand, then you can start leveraging that cost savings to build a much bigger business. You also have total control, right? You don’t have issues for example with bad returns that happen at Amazon or issues with mixed inventory and FBA, all of the sort of pain points that can come with selling on Amazon, they go out the window, if you’re selling on your own platform, and then finally you own the customer, right? So you control that customer experience. You own their data. You can communicate them. You can offer them new things, no credit. You’ve got to follow the laws and the GDPR and the California stuff, but you still have a much stronger leverage position with your customer base when you’re on your platform.
Tim Jordan: So it’s more difficult, but the upside is much higher.
Rick: Absolutely. Absolutely. You couldn’t, I don’t think you could retail arbitrage your way into needing a platform, but I can tell you, like, I’ve met people, I forget the guy’s name, but he’s the– I believe according to him, he’s the largest seller of essential oils on Amazon. 10, 11 figures a year in essential oil sales. Right. That’s the kind of thing that an Amazon seller can build, but now he’s got a brand. When I– he was telling me about this and I said, Oh, I forget what the brand is called. But I said, Oh, I have a diffuser at home. And he was, oh, that’s my brand. So, he had gotten so big. He had been able to build brand loyalty around essential oils and diffusers. And so then he is in a position where he could leverage that brand to get repeat business and go on to his own platform.
Tim Jordan: And once he’s in his own platform, then instead of the ball being in Amazon’s court, like he built his own court right. Now, obviously this, this takes a whole lot of work. And what I mean by work is really getting that traffic, right? So to get the traffic, my understanding is you need two things, two big things. I know there’s more, but the two big things are, one, you need a good catalog and by good catalog, I mean, you should probably have multiple products that way you can leverage, repeat selling and upselling and stuff like that. I’ve never seen a great, and there’s those few funnels out there, like a one product thing, because once you get their email address and you’ve got them cookied, if you’ve sold them, the one thing, there’s nothing else to sell them. So with great products that are brand driven, that people come and buy. The second thing is you need to find a way to pump traffic to it, because if you put the best product out there in the world and nobody knows to come to your site, you’re screwed. Right?
Rick: No, absolutely. And I mean, if you think about it, so obviously you want to have a great catalog. Ideally, you want to have a consumable product now, not every consumable product is dog food, per se. iPhone cases are consumable product.
Tim Jordan: Yeah, shoes are still consumable. Yeah.
Rick: Absolutely. So there’s a lot of consumable products that people might overlook. But the thing to keep in mind is that think about the biggest tech companies in the world a few names that are going to spread out at you. You’ve got Facebook, you’ve got Google, you’ve got Amazon, those three companies, right there. They’re pretty much own traffic generation in the U S right. And that’s one of the reasons they’re the three of the biggest companies in the world. So that shows you the power in demand aggregation. And so for a merchant, I like to tell merchants when I’m consulting with them, Amazon represents between 40 and 50% of all retail in North America of all e-commerce retail, North America, which means I think 40 to 50% of their sales should be done on Amazon. If you’re selling way more on Amazon, if you’re a hundred percent on Amazon, then you’re likely missing out on other channels, whether it’s eBay, Etsy, your own platform, whatever. And if you’re selling way less than 40 or 50% on Amazon, either you don’t have the margin, which means that you should probably look at changing your prices, if you can, or finding a way to get better margins, or you’re just leaving sales on the table.
Tim Jordan: All right. I’m pausing for a second. Because I’m writing this down. This is like new to me. So let me make sure I got that correct. You said, because Amazon represents 50% of e-commerce sales in the US, Amazon should represent 50% of your e-commerce sales for your brand and your business
Rick: Essentially. I mean, that’s not– there’s no such every rule is made to be broken as they say, right. So there’s no such thing as a rule that can’t be broken, but I think that’s a good heuristic. That’s a good rule of thumb to tell am I to reliant on Amazon? Am I not relying enough? Now, going back to, if you’re just doing retail arbitrage, your whole business is going to be Amazon and eBay and Walmart, right. That’s just where it’s at. But if you actually have, if you’re either manufacturing or private labeling products and building a brand, I think that rule holds really true.
Tim Jordan: And what would be an exception where Amazon is not a good place for your e-commerce portfolio, so to speak?
Rick: The thing, I mean, I think if you’re selling products, this is a tough one. I don’t know that there’s a lot of great exceptions. I mean, the thing is, is Amazon’s expensive, right? Not, I don’t mean to the consumer, but to–
Tim Jordan: The online seller. Yeah. They took a big chunk.
Rick: Take a big chunk. So the main reason to not sell on Amazon is because you can’t afford it. And so if you’re somehow able to piece together a business, but you can’t afford Amazon’s cut, good for you for piecing together a business now. But I would be worried that one bump in the road and you’re not going to have enough margin to survive.
Tim Jordan: Yeah. It’s almost like if you can’t afford to pay Amazon, then your margins are probably too slim. You’ve got a fundamental flaw in your business.
Rick: Exactly. That is exactly right.
Tim Jordan: I was just going to say where I see people doing a lot more on a platform and not a marketplace is say, maybe the product is already saturated on Amazon. So if they drive traffic to their website and they have great Facebook, Instagram ads, things like that, and they’re charging $30 for this Cleaver, this knife, everybody else is selling it for $11 on Amazon. If you drive traffic to Amazon, they might actually see your competitors. You lose sales. Right.
Rick: Totally. And then the other thing you’ve got to worry about on Amazon is are you going to get ripped off either by another competitor or Amazon themselves? One example I like to use is I think most of us were familiar with the company, pop sockets. They make those little plastic things to go on the back of your phone and pop sockets actually for a little plastic widget, little piece of plastic and rubber. They’ve done a great job building a brand. The fact that we know that name is even impressive, but you know, they run a risk. How hard would it be for there to be an Amazon basics phone holder that looks identical to pop sockets? I mean, it would take all of 30 seconds of Amazon’s time to think about it. So there’s always some risk that by selling on Amazon, Amazon senior sales data, and once they see their sales data, you’re dancing with the dragon, so to speak and the dragon might choose to burn you if you’re not careful.
Tim Jordan: Yeah. It’s– Amazon is an interesting topic because it’s kind of like darned if you do, darned if you don’t like, you need to be on it, but you can’t rely on it. I heard someone long time ago, one of those first Amazon conference in Seattle, it said something about becoming platform agnostic. Like you can’t put all your faith in it, right? So I’m constantly telling people like, Hey, don’t be an Amazon seller, be a product seller that uses Amazon, but be thinking about that next step, right? That next step of actually maturing your business. Right?
Rick: That is extremely sage advice. I mean, so I can think of a friend of mine in San Diego who I met through Miva, but I’ve known him so long at this point. He’s just a friend. And they started by doing retail arbitrage, selling on Amazon, extending to eBay. Then they started going to China to source their own products. Right. And there’s a process– I’ll obviously go into China pre pandemic, but there was a process there where they found out what sold, retail arbitrage for example, is a great way to see what there’s a lot of market demand for. It’s not the only way. But it’s a great way to find out what people are willing to pay for that there’s margin on. Right. And then if you’re only on Amazon at a very minimum, get on eBay, if you’re doing anything that’s even closely related to handcrafted or artistic, make sure it’s on Etsy, like start getting out of just one marketplace. And then from there, the stuff that’s repeatable, the stuff that people are buying over and over again, let’s say you’re selling it over and over again, but it’s a screwdriver and it’s got the Stanley name on it. Well, could you make the exact same screwdriver with the Tim Jordan name on it? That’s where you want to start looking at those opportunities to build your brand.
Tim Jordan: Yep. All right. So talking about actually building these platforms now, right? Like we know that it’s a big step. We know that it’s important. We’ve talked about that. We know that between marketplace and platforms, we’ve decided there’s probably a place for both, for many, many products. Tom shoes has a website, but you can also buy Tom shoes on Amazon. Right. It’s necessary. What’s interesting is in your position, you get to see a lot of these companies that are becoming very serious, meaning they’re doing a lot of revenue, right? Like if I were to look at the Shopify portfolio, for example, it’s a lot of businesses that have never launched. I mean, if I could look at everybody that has a Shopify account right now, the data is going to be skewed because it’s all these people that thought it was going to be great to pay whatever $29 a month set up some crappy Shopify store and it’s never gone. But for you, you have the advantage of seeing data and seeing information and seeing brands that are taking this more seriously, because all of your brands are the thousands of brands that are on the Miva platform are actually creating revenue and driving sales. Correct?
Rick: Absolutely. Yeah, we have, you could probably count the number of people doing zero revenue on your hands because it’s just way too expensive to use our platform for that. And Shopify is a great example here. You know, I don’t know the numbers anymore used to be Shopify is average retailer and average is a funky number. Because you have a lot of people doing zero to bring that average down. But our average retailer was doing about five grand a year in sales. Now for every Kylie Jenner, you have doing 200 million, you’ve got however many people offset that doing zero. Right. So you’re correct. A lot of people pay 29.99 to get started. They either build a site and don’t launch or they never even built it. Then Shopify has got that. They’ll put it on nice plan, but no, don’t give up on your dream and it’s 14.99, or whatever they charge. Right. So Shopify has got a mass number of merchants and they do drive a lot of traffic. They don’t drive the traffic, but they there’s a lot of GMP going. Yeah. But you’re right. A lot of those merchants are small. Our average merchant, our new average merchant coming to us is doing North of 2 million a year in online sales. Sometimes often that 2 million is the whole business. But we also, sometimes that 2 million is part of a huge corporation. We have Cintas as a customer, you guys have all seen their trucks driving around with uniforms and stuff. They have a division that sells first aid kits for gyms and stuff. Right. So we’ve got stuff like that on our platform. And so you do see it, you see a broad spectrum and we do see a lot of real data about what people are selling online and what they can do.
Tim Jordan: All right. So with all that data, with this like kind of crystal ball, bird’s eye view of what’s happening in, let’s say the newer, the slightly smaller, the less mature but serious businesses. Okay. Because if we looked at all of e-commerce, we looked like Magento, we’re looking at these huge brands that most of the listeners honestly, probably can’t relate to, but a lot of our listeners can think of anything about a two to three to $4 million business. That’s easy. All right. So with your crystal ball, let’s talk a little bit about some of the things that you’ve identified as success and failures with your users.
Rick: Cool. Sure.
Tim Jordan: So I guess the first question would be when you look at like the most successful brands, the most successful sellers on your platform, what are some of the things that they are consistently getting right.
Rick: So, that’s a great question. One of the things that are most consistently getting right is meeting the customer where the customer wants to be met. So we’re not a specialty platform in any vertical, but because we handle complex sites well, we tend to have a lot of people doing things like auto parts right. Now, if you think about the fanaticism that goes on people’s cars, whether it’s fast in the first hour cars or diesel pickup trucks, people get obsessive about their cars and during pandemic, that exploded, right. I mean, it was sort of like why people started working on their homes and we have a lot of homework customers too. So you start seeing this people’s demand. Well, if I happen to have a 2017 Ford F-150 special version, right? I’m not a truck guy. So, forgive me for this. I’m actually kind of a Jeep guy, but I’m going to go with my Ford analogy. So, if I have this Ford version and I’m going to an aftermarket trucks site to get stuff, I don’t want to see all the parts on that site that can’t fit my truck. It’s not interesting to me. There might be 25,000 SKUs on the site and there might only be 150 SKUs that matter to me. So I need to be able to go tell that site, well, what car I care about and then have the whole navigation set change to what I want to shop for. Right. Even in a more simple example, I mentioned iPhone cases that kind of go, well, most people are brand aficionados for their phones. So if you’re into iPhones and you say, go to, I’m trying to think of a big case company.
Tim Jordan: Otter Box.
Rick: Yeah. Go to OtterBox. Once OtterBox knows I’m an iPhone guy, they should probably really show me iPhones. There should be a navigation set to see other phones. Right. But I’m an iPhone guy and I should have told OtterBox, I got a 12 pro and then that’s all I’m going to see. And so we see it’s about meeting the customer where they want to be and showing them the stuff, especially in a mobile first world. Right. An example I like to use is, I’m six foot six, I got size 14 feet. I’ll get advertisements and I’m kind of a sneaker guy. So I’ll get advertisements from K-Swiss all the time. Because I liked their shoes for the life of me. I can’t figure out how to find a size 14 on their mobile site, no dishonest shoe brand. I like, but in Vans the same way, I love Vans figuring out if I can order a pair of Vans on my iPhone is a fool’s errand. And so what I ended up doing is bookmarking stuff, going to my laptop and looking it up by that time, it could be sold out or it didn’t exist in the first place. And so even these huge brands, K-swiss vans, et cetera, they’re missing out on conversion optimization options by not meeting me the shopper where I want to be. And so that’s where we see really leveraging it.
Tim Jordan: So I hate the term, dummy proof or idiot proof or dumbing it down. But I think, you know what I mean, it kind of applies like right now people’s attention span. And honestly people have become, I think a title’s the right word. Like people have become entitled to get what they want immediately see what they want and not have to go through a bunch of bull crap navigating. So it’s all about making very, very rapid suggestions and getting them what they want immediately on their screen. Is that right?
Rick: Absolutely. In fact, I think you could look at it this way. Amazon did a phenomenal job of taking effectively everything in the world that you’d used to go to a regular store for bundle that with prime. And if I need toothpaste, but I don’t need it today, I’m not going to the grocery store. Well, I don’t want to deal with parking. I’ll just hit the button and the toothpaste shows up in two days and that’s that Shopify took that to a new and interesting logical step. Now, if I have an impulse buy, they probably have more than a single product going back to your funnel conversation. But if I have an impulse buy that I can advertise on Facebook or Instagram or in the future coming Pinterest or Tik Tok and have a real fast funnel to check out when I buy something on social media where I’m like, Oh, that’s clever. Let me buy it. And I’m two steps away from an Apple pay checkout and boom it’s on its way, 99% of the time of Shopify. So Shopify has really mastered this impulse buy funnel. Amazon has dominated the necessity buy funnel. And so what’s left in the marketplace. The other 30 or 40% of total online retail in North America is all the more advanced stuff. It’s people who want to discover products. It’s people who have specialty products for the type of car they have or the size body they have. And it really is about, but it goes back to your entitlement comment. You want to make sure you’re serving them the thing they want. No one has the patients anymore for browsing through stuff they can’t have.
Tim Jordan: All right. That’s great. That’s not what I thought you were going to start with. That’s an amazing observation. So that’s one of the things that people are doing well, what’s the second thing that you would say the most successful sellers on your platform are doing well.
Rick: Second thing most successful platform, I mean, if I’m going to go rail, if I’m going to get blocking and tackling to use a sports analogy, great product descriptions, great photography. I mean, people, I think discount how simple that stuff is. And part of it is it’s sort of like eating your veggies, right? We all know we’re supposed to eat our veggies. We all know I should have a great product photography and in a decent, compelling product copy. If you’re a Seinfeld fan, I’m probably displaying my age a little bit. Although hopefully Seinfeld indoors, the old J Peterman catalog, right? The J Peterman catalog is all about great product descriptions. So those things translate to the web. You’ve got to have, if someone can’t see the product, you’ve got to give them a visceral experience and people who really do a great job, you have multiple angles, you answer their questions. You tell them if it’s going to fit or how big it is or how it’s going to be shipped or how easy or hard returns are, and all those things. It really goes back to kind of what you’re saying about the customer. You need to make sure the customer has all of their check marks checked and that they don’t have any fear left.
Tim Jordan: Okay, love it. So when you’re looking at that same, from that same perspective that you have at the companies that maybe aren’t doing so well, so the underperforming companies, the companies that are struggling, what are the things that they’re consistently getting wrong and doing poorly with?
Rick: Sure. That one’s probably the easiest question you’ve asked. The thing that I see most commonly blubbed is you’ll have someone who built a website. It could be three years ago. It could be 20 years ago. They don’t it’s. I find this often tends to be an age demographic thing, but they’re oddly not sold on e-commerce. I doubt most of your listeners are going to have this problem, but they’re oddly not sold on e-commerce. It’s sort of an add on to their business, whether they’re B2B or they just have an old site and they can’t imagine that if they rebuild their site and focus on, on modern web design, mobile first web design with an easy checkout flow, they can imagine sales actually increasing. They convinced themselves in their head that they’re getting all the customers there are to get. And that’s almost certainly never true. Going back to my K-Swiss analogy, K-Swiss isn’t getting all the customers, they can never get. Vans isn’t getting it. I promise you even Amazon’s not getting it. So your average customer should always be assuming that there’s more eyeballs wanting to buy than are buying.
Tim Jordan: Yeah. That makes a lot of sense. What would a second thing be?
Rick: Making checkout too hard. So, I mean, it’s sort of a, it’s sort of a part B of that, but whether it is simple stuff like not taking American express or not taking Apple pay or not taking PayPal, I’ve seen merchants and I’ll throw on that shipping. So I’m going to do a two-parter here. I see merchants squabble about pennies, right? Well, American express takes too much. American express takes on average about 75 basis points, more than visa or MasterCard. If you can absorb that 75 basis points. So you’ve got a margin problem, right. Or they flip out about shipping. Well, the fact of the matter is shipping. You know, customer, I’m going to, here’s a new slash you should know this customers want free shipping. They really want it. They totally, they want free two day shipping, but they’ll take free shipping. Right. And the reason goes like this. When I go to target to buy something, guess what? Target paid to ship it, to get to that store. And I don’t pay shipping at checkout. The customer doesn’t want to be confused by the cost of the item. It’s not that the customer is being cheap, per se. Yes. Every customer wants it as cheap as possible, but they don’t want surprises. Customers hate surprises. And so often when you go through someone’s website, if you do a, a site analysis or a site audit, you see surprise after surprise after surprise, whether it’s shipping speed or poor checkout or not enough information to make an educated decision. Just if you spend your whole time trying to imagine that you’re a who’s knows nothing. And having you pretend to buy something and eliminate surprises, your business will improve.
Tim Jordan: So you mentioned something that I made a note about. You said PayPal, all right. I think that was interesting in the e-commerce space because it’s obviously been around forever. Like it’s the old system and the user experience actually sucks. All right. If I put PayPal as one of my payment options in my e-commerce store, if I, as a buyer, I’m buying something from this e-commerce store, click the PayPal button, it takes me out of their platform and into the PayPal environment. And it does like all this crazy back and forth stuff where I have like 28 steps to pay on PayPal, as opposed to just put my credit card in. But people love it.
Rick: That depends on how you set it up. So that’s not totally true– what you described can be true. And I would bet those don’t work as well, but you’re correct.
Tim Jordan: Why– but even if it’s more difficult than a credit card, why are e-commerce stores still using PayPal or I guess, I guess the answer to that would be because people want to, but why do people still want to pay with PayPal? And I guess that raises the question of like how many options we have, because I know there’s got to be a conversation about simplification. Like let’s not put too many options and I go to e-commerce store and I see 29,000 ways to pay, you got WeChat pay and all this stuff, like, should we be doing that to give them more options or should we start forcing people into our system and some flood?
Rick: That’s a great question. That’s really a great question. So, let me kind of give a little bit of history on why PayPal dominated for so long and then why I think they’re still competitive. They don’t dominate like they used to, although they’re still, they’re bigger than they’ve ever been. So for a long time, PayPal was the solution for a trust problem. Right? I go to a website, I go to jackshirts.com. I don’t know Jack, but I like this shirt. So I want to check out and I, and on top of that, maybe I don’t have my credit card with me, but I know my PayPal login. So I don’t have to worry about him stealing my card and I don’t have to get up off my and go get my wallet. Right. So PayPal sort of solved a convenience problem and a security problem. Really, I would say from when they launched instant checkout in the mid two thousands, like 2004 or five up until a few years ago, what they solve for now, if you use the modern PayPal. So I’m going to define modern PayPal is the little pop-up that doesn’t take you off site, where all you do is log in. It’ll still gives you the wallet. It still gives us security. And it’s nice and fast where there, and even though they’re still growing, like mad where their challenges come in is if you look at, um, if you look at a site, that’s got a nice Apple pay implementation. Now Apple pay tends to be mobile. Apple pay does all the things that PayPal does, but faster and easier. So, I do think PayPal has some headwinds in the marketplace, but for now customers, my mom’s not going to figure out Apple pay. My mom knows how to use her PayPal account. And that’s always something to keep in mind.
Tim Jordan: Yeah. And this all changes when we cross borders, right. Because most of the Miva customers are based in the us. Right. And they’re selling in the US I do know when we cross borders, especially like I’ve recently had conversations about Eastern Europe and France. Like, if you can’t pay with PayPal, they’re not going to buy from you. Right.
Rick: So, PayPal is certainly one of PayPal’s real juggernaut strengths is international stuff. And I would love to talk more about that. I’m not, frankly, just not an expert on that, but I can tell you that that is where they shine. I know this from their own propaganda, but I also know it to be true.
Tim Jordan: Yeah. I’d love propaganda versus marketing. Right. Is there a difference or is it kind of the same?
Rick: I think it’s still the same.
Tim Jordan: I’m writing down so many questions. I know we’re not going to able to get to all of these in this time, but man, you’re making my head spin here. All right. So I’m going to change the subject just briefly. One thing, that’s a hot topic of conversation e-commerce stores is selling their businesses, right? So we see these like big unicorn businesses like Thrasio pops-up and everybody wants to build something and sell it at a high, multiple quickly, 18, 24 months life cycle. And we’re seeing that really happen from Amazon brands. That’s where we saw this big thing happen. Now, of course, there’s been business brokers for years selling e-commerce businesses, but the marketplace have accelerated this. I personally see a huge problem. All right. And that problem that I see is people spending a boatload of money to buy Amazon businesses that aren’t real businesses, meaning you’re a hundred percent reliant on Amazon and tomorrow Amazon shut that down. Just was it last, last week at the time recording last week, like eight of the top 24 supplement brands on Amazon disappeared overnight. Gone, Right? So it is risky. Now I’m thinking that there’s a time and place to start getting people familiar with the concept of building an off Amazon or off marketplace platform presence, start getting branding, start getting traction because that will affect a selling multiple. Right. So can you tell us, like in my right there, is that something we should be working on? Is there a higher increased valuation of the company by having a complete system like Miva in place for your business?
Rick: So my personal opinion is yes, absolutely. And I’ll tell you this, I’ve watched the rise, private equity is a fascinating thing, and I don’t want to bore your audience, but we have private equity backers, and I’m kind of in and around that world a lot, there has been a movement in private equity to raise large swaths of capital to go gobble up Amazon sellers. Right. So, that’s sort of driving this market. I wouldn’t say call it a bubble because I don’t know that they’re overpaying, but it’s certainly created a lot of capital to go. And I think, but I don’t know for sure. I think their thesis is that if they have enough weight that they can kind of keep Amazon at Bay or potentially leverage all of those brands together to go off platform and have their own websites sell in other locations. But what I can say is for valuations of a business, I have been through raising money. I’ve been through selling businesses. The one of the first things, anyone who’s looking to buy your business when they’re valuing it, they’re going to look at is, is this business going to exist in a year, three years, five years. And if you were solely selling on Amazon and totally beholden to them, whoever buys you, if they’re an intelligent buyer is going to discount the value of your business based on the Amazon risk.
Tim Jordan: Yeah. Completely agree. All right. So we’ve talked about building your own site, building your own platform, getting off marketplaces. We understand that. I know we can’t go through like a deep dive on like, how do we actually do that? But we need to be asking questions like, who’s ready. So if someone said, Hey man, I’m thinking about launching a brand or I haven’t started selling your product yet, but I’m going big. Or I’m selling on Amazon. Like when is somebody ready to start investing in something as robust as platform like Miva?
Rick: Sure. So, I think there’s a bunch of good rules of thumb people can use. So, I would start with GMV. So if you are, and that’s gross merchant volumes, that’s the amount of sales going through your store. So if you’re selling under a hundred grand a year on Amazon, don’t really worry about off Amazon. Yet you need to figure out how to get products. People want and sell them through Amazon. You need to figure out, you just need to get the systems of your business running, right. Once you’re over a hundred grand, I would at least be looking at a Shopify, but I would be looking at a Shopify big commerce Miva, Magento, Woo, depending on your needs, we all have different specialties. Right? And then once you get up to about a million in sales, now you have real problems. And what I mean by that is you have products. You have packages go missing, you have customer service reps, you have product sourcing stuff, and you quickly get to a point where you can no longer do it all yourself. In fact, I would say at a million dollars, you’re likely not doing it all yourself anyway, but you can’t do it yourself anymore. And if you try to do it yourself, you’re going to choke it. So when you’re ready to get more advanced to scale your business, you need to trust hiring people to do it. And there’s two rules of thumb that I like to follow here. First of all, if you can hire someone at an affordable rate to do an 80% as well as you can do it, because I think most entrepreneurs suffer from a type of perfectionism. We all think we can do it best. And they have a hard time handing the reins over. If you can hire someone to do an 80% as well as you can for the right price, you should do that. And then you should systematize the 20% that are going to screw up on top of that. If you think about I’m going to switch analogies here, but it’s the same mentor taught me this. Think about like golf. Golf’s an individual sport played with friends. You drive around, it’s competitive, but four people in a foursome you play, but fundamentally every golfer’s playing against themselves in the course. And then you go up to a basketball team, right? Basketball is five people on the court and coaching a golfer would be different than coaching a basketball team would be different than coaching a baseball team. And ultimately a football team is about as big as a team sport as you get.
Rick: And so as your business is growing, I always think it’s helpful to look through those analogy lenses, right? When you’re a one person shop, you’re a golfer and you want to think about it like a golfer. What can you do today to change your swing? Then you become a basketball team and you’ve got a right-hand person and a left-hand person. You’ve got a little team. You eventually grow into being a baseball team where you have a dugout and you have different coaches. And then ultimately, if you really succeed, you get big, like a football team or something bigger. And at each step you have to rethink all your systems and processes and build for the next level. Otherwise your business will get stuck. And if your business gets stuck, it will ultimately collapse it someday.
Tim Jordan: Okay. Makes a lot of sense. So what are some of the biggest struggles people have when they’re making that step into their e-commerce platform business? Like I’m strapping on my armor, man, I’m getting ready to do this. Like, what is the thing that I need to be most prepared for?
Rick: You know, this is funny. I’m going to steal. I’m sure you know, John Lawson. So I don’t know. John’s been a guest on the show, but I’m going to steal an example of my buddy John uses. So John’s an e-commerce consultant speaker, et cetera. John’s tells people who were in this exact position. If you can’t ship a product, if you don’t know how to fulfill a product, you’re dead in the water. So first thing you got to do when you strap on that armor is make sure, you know, how to ship product, ship product, track, those shipments, handle the customer service handle those returns. If you can’t do that, if you’re solely reliant on Amazon getting those packages out, you’re not ready to go to the next level.
Tim Jordan: Okay. And that’s a good benchmark. Not just from what it seems like on the surface, like on the surface, it’s like, you’re saying, Hey, go and get a 3PL, but to actually get where you have a third-party logistics system, you’re actually doing a lot, like there’s a lot on that checklist. Right.
Rick: That’s actually a great example. So I am not suggesting we will get a 3PL yet. I’m suggesting they get that system in place. And then once you have your system down, use the 3PL to do all the stuff you don’t want to do. That’s the way to get there.
Tim Jordan: Okay. That makes a lot of sense. So, what’s next. All right. It’s wrapping up. I’m going to skip a lot of questions, but I want to ask you this. You’re the CEO of Miva, right? It’s a great platform. You see a lot, that’s going in the e-commerce business. You’re in San Diego, which all over California is like e-com hub of the world nearly like you see stuff that the rest of us don’t. What’s next for e-comm that we should all start paying attention to keeping our eyes out on and get ready for?
Rick: So, I mean, I think it’s funny. What’s next for e-comm to me sounds boring, but it’s not. And here’s what it is. There is still an immense amount of business out there that’s done the traditional way. And every stone has to be unturned when it comes to this conversion to digital commerce, right? So if you sell business to business and by that, what I mean is I necessarily sell one item to Tim, walk into my door. Tim has his own business and I sell them packs of stuff. Do you sell business to business? And you’re still relying on emails, telephones, or faxes. God forbid to take orders that is radically transforming. And people frankly expect their business to business purchases to feel no different than a Shopify purchase. And on top of that, going back to traditional retail, people don’t want to if I want to know, if the thing I’m looking for is in a store. So if you’re not doing buy online pickup in store properly, or online inventory lookups properly, you’re getting left behind. I know these are a little bit advanced, maybe for a person just going on Amazon, but as they’re stepping up and they’re getting distribution, one of the things you’re going to do, you get a brand. What you do after you have your own after an Amazon eBay and have your own website? Well, now you’re going to start selling to retail, right? So you’re going to start selling to whoever carries your item. Well, you need to be able to make sure people know where to buy that item. And so all of these things are just, it’s a constant refinement of making it easier for your customer to find the thing they want. It should feel very Apple like, it should feel like it just automatically works. And if you can constantly look at automatically working your e-commerce site, your business will grow.
Tim Jordan: And what’s crazy is every day there’s a new solution. Like the things that people struggled with six months ago, they don’t have to struggle with anymore because we’re talking about private equity being pumped into e-commerce brands. We see people like Amazon doing what they’ve done. Well, that’s creating this massive environment for other tools and services and automations and like cool Ninja stuff that people don’t even know about. Where, in my opinion, these seemingly I say complex, not complicated, like complex, there’s a lot of moving parts, but all of them individually are not complicated. They’re fairly simple, it’s like breaking down the barriers. Like it’s, it’s making it easier for us. So, I guess to paraphrase your answer, what’s next in e-commerce is making very, are all of these things with the environment forming to make these used to be complicated processes and services and needs very, very simple.
Rick: That’s exactly correct. That is a perfect way to summarize it.
Tim Jordan: Gotcha. I had to dumb it down for myself to make sure I got that right.
Rick: Yeah. I have a magical ability to overstate it. So, thank you.
Tim Jordan: There we go. All right. Well, that’s awesome. I know we’re close to the end of time and I don’t want to take up too much of your time, but you’ve thrown so much on me again, for those of you looking at YouTube, you can see my note sheet. It’s pretty stinking full here. A lot for me to think about, but I want to end with a question I’ve been asking everybody lately. So, just to back up for a second, Miva was started in the mid-nineties, right?
Rick: Yep. Late. Yeah. 1997.
Tim Jordan: And you were an employee of Miva for a long time.
Rick: Yeah. I came on in 1999.
Tim Jordan: And then you left and came back and bought the company, right?
Rick: That’s correct. Yeah. That story could take its own podcast, but I’ll do a 30-second version. I started as director of North American sales in 1999, back then you sold, e-commerce not as SAS like we think of today, but you sold it to web hosting companies. So I would go to think of the GoDaddy’s of the blue hosts of the world, sell them, bundles of licenses and they’d turn around and include them with their packages. And then we, in 2004, sold it to a pay-per-click search engine company. I won’t go into that story. They got clobbered by Google, nothing to do with what we did. And so when they got clobbered by Google and AdWords, they sold off all the bits and pieces they bought and that included Miva. And so myself and some people bought it back from them and we rebuilt it. We started out as a mass market platform or like Shopify, and we rebuilt it as a mid-market enterprise platform that we’ve, I never imagined 14 years ago. I’d still be doing this in 14 years, but it’s actually been a great ride. And it’s been frankly, the best business experience in my life.
Tim Jordan: So you went from a salesman to owning a frankly, I don’t even know how you describe it, but a legitimate tech platform that’s powering e-commerce for, I suspect billions of dollars of sales a year, right?
Rick: Yeah. Our customers do North of 2 billion a year in online sales in our watch.
Tim Jordan: Yeah. So that being said, you probably had to mature very fast, grow up very fast, like figure out how to do the CEO thing. So the question I’ve been asking people lately is if you had to go to your bookshelf and point to a book that you read that changed the game for you, right? Like made everything possible, completely changed. Your mindset, gave you a piece of information you had to have, and you wanted to recommend that all of our listeners go read that book. What would it be?
Rick: That’s a great question. Because I have read a lot of books like that, that have inspired me. And I could, we could probably talk an hour about this, but if I have to pick just one, it’s kind of cliche, but I don’t know if it’s still in Vogue these days, I’m going to go with Think and Grow Rich by Napoleon Hill. And the reason is this, and he says it throughout the book, it’s in the title of the book think, and then you’ll grow rich. And so it’s all about sitting and thinking and sitting and thinking and not like dumb thinking, but going back to making it easier to do, making the complex seem easy. That’s what thinking gets you. And so think and grow rich is my recommendation.
Tim Jordan: Okay, awesome. And if people wanted to track you down, I know you’ve got your own podcast. How can they track down your podcast?
Rick: My podcast is called Dragonproof e-commerce and it’s on all the normal podcast platforms, Apple, Spotify, YouTube, et cetera. And I have a book of the same name, dragonproof e-commerce that you can get on Amazon or @dragonproofbook.com. And it talks a lot about the same things we talk about here today. And I believe you’re going to be a guest on my podcast soon. So if you send me those notes, maybe we can get to the other half of this conversation.
Tim Jordan: Perfect. All right guys, go check out the podcast. Dragonproof e-commerce, buy his book, show him some love on Amazon. And although I’m sure you’re not making a ton of money on that, but it makes you feel good. Seeing those book sales come in, right?
Rick: Yeah. Every month I get the deposit. It’s nice.
Tim Jordan: And thanks for being on, man. If any of you guys listening have found value in this, make sure to leave us a review on your podcast platform, give us a thumbs and a subscribe on the YouTube channel. If you’re watching it there, go check out miva.com and start seeing what they’re doing differently. I’ve been familiar with Miva for, I don’t know, a couple years now, but you don’t see them a lot in marketing. You don’t see them like making these big press releases. They’re kind of just like grinding away doing some cool stuff in the background, powering a lot of e-commerce sales, but doing it subtly, right. Is that a good description?
Rick: That is a good description. And we’re often called the best kept secret in e-commerce, which frankly kind of makes my skin crawl a little bit. I’d like to be the not secret in e-commerce, but you’re correct. We power a lot of sales, a lot of big sites. If you’ve bought much online, you certainly bought from the Miva store and if you have a growing and thriving business, we’re a great platform for you.
Tim Jordan: Little sales pitch there at the end. Thank you so much, Rick, for being on. Thank you all for listening to another rambling episode. And we’ll see you guys on the next one.