Developing your ecommerce tech stack
Estimated reading time: 5 minutes 30 seconds. Last updated December 2020.
This post is a guest post from our friends at Clearinity .
Businesses, like people, evolve over time. Just ask any entrepreneur, and they’ll tell you that years 1-3 may look nothing like years 5-8! The clientele is different. The revenue is different. How daily work gets done might be similar, but the systems that help are usually very different.
Clearinity noticed that the best business builders will tell you that they have a plan for their business. This plan usually centers on revenue targets, marketing demographics, or product development. However, ecommerce businesses rely on technology so much that they should really have a technology development plan too - and that’s where Clearinity shines.
“Yeah, but MY business is different, and we do things differently than the other guys!”
- Every person struggling with their technology plan, ever.
Yes, your business is different, and that’s why you’re thriving!
However, your business can also be modelled in simple ways that help you, and your team, understand where it’s going. Let’s examine the typical development of an ecommerce company, started by Laura as a hobby.
Laura sells baby product bundles online. If we write out the information surrounding technology, it might be as simple as:
- Laura has a sales channel - it’s just her website, and it uses a robust shopping cart platform like Shopify .
- Laura has some sales and does her own accounting - this is just a spreadsheet for now!
- Laura has a warehouse - it’s just her garage, and she’s not using a spreadsheet to track it yet.
However, Laura starts to see some success. Within a year, her company is at its own version of Stage 2 (below).
- Laura realized how much time she loses to fulfilment. She now has a software service that saves her many hours per month, like ShipStation .
- Laura has her own warehouse now (a big shed in the back!) and she tracks everything on spreadsheets.
- Laura also has enough success to afford a better accounting platform. She picked Xero , but QuickBooks Online would have worked just as well!
A year later, Laura’s business is growing up and she’s starting to hit reliable six-figure sales for the year. This isn’t a hobby - it’s a real business now!
- Laura has added a Customer Relationship Management software (like Insightly ) to build better brand loyalty. She picked it based on how it integrates.
- Even though she doesn’t change anything else, this one big change take her from low-six-figure sales to the mid-six-figures mark in a year!
- Because Laura was focussed on hiring, she doesn’t develop many more systems.
Laura is feeling the flatline again, and realizes that she can sell in other places.
- She adds another website for wholesale, as well as Amazon Seller Central .
- Since she added Amazon as a sales channel, she knew to upgrade her accounting with A2X right away. Automation bonus +100!
- Her CRM software extends value to the new Wholesale account, but doesn’t include any information about Amazon Seller Central. She’s saving her pennies to implement a big change, but she can only do that because she’s drawn out a plan.
- Laura upgraded her warehouse to something bigger so that her employees don’t have to come to her house to manage stock.
Laura’s company has crossed the $1,000,000 per year Gross Sales mark! She made some other superb decisions to keep growth accelerated.
- She invested in her CRM again, and it now sucks up information from all her sales channels. It’s her one-stop-shop for all things Customer Service.
- She outsourced her accounting due to the complexities of sales tax collection and reporting, tracking fees per sales channel, and many other “frustratingly long” accounting processes. She now cares more about Purchase Orders, but doesn’t have a good system yet.
- She outsourced half of her fulfilment to a Third-Party Logistics company (3PL) for additional capacity and reduced fulfilment times.
- Managing the reporting and the listings for multiple sales channels has gotten even harder!
Laura’s business is finally exiting growth-stages and thinking about what it takes to become a healthy mid-sized company.
- She brought in Clearinity to focus on the cloud-based inventory software. They matched the business needs to the platforms, and sorted out if they needed a big-name solution (like Netsuite , Skubana , or StitchLabs ), or if a smaller platform worked just as well ( DEAR Systems , ShipHero , or Cin7 ). The right cloud inventory software consolidated a lot of other processes and saved here team so much headache!
- This meant that her team could start to get a handle on other things they were putting off - like effective HR policies, management of vendors, introducing a line of products that they build from scratch, and many more!
Importantly, Laura knows that she has the resources she needs to keep her business growing. Once the business has crossed the $50,000,000 per year Gross Revenue mark, she’ll be consolidating software left-and-right.
- Laura knows that she’s headed for a full ERP solution one day, like Oracle or SAP.
- Importantly, Laura also knows that proper software investment can stop her from ever needing a full all-in-one ERP if she builds strategic integrations that automate much of the work. When done properly, custom development can save hiring of 2-10 people per integration - people who wouldn’t feel valuable or validated since they just move data all day! This way, Laura preserves the culture of her business while also making it faster than ever before.
Laura’s story is a single representation of hundreds of different ways the ecommerce companies solve technology problems today. Despite different approaches and strategies, all healthy, growing, and successful ecommerce companies follow similar themes:
- Plan for the future.
- Save for a rainy day.
- Hire help every step of the way (especially for projects).
- Know your business.
All of these themes are built on healthy tools and even healthier relationships.
Scale Your Business with A2X
Getting your business finances in order should be top priority for all ecommerce sellers. The only way to strategize growth successfully is to understand your cash flow. Without which, your business will inevitably collapse.
A2X sits between your accounting software (e.g. Xero or Quickbooks) and your ecommerce platform (Shopify, Amazon, Walmart, eBay). It intercepts the individual orders being sent from one to the other and extracts the important details that you need as a seller and would otherwise be lost. It then organizes them into journal summaries, separates transactions by month and neatly delivers this information to your accounting software.
What does this mean for your business development plans? Solid, accurate data, organized for you in an accessible way. Without A2X you would need to manually separate transactions into months to gauge business performance. You would need to reverse engineer your bank deposits to find out how much you paid in fees, collected in sales tax, gained in reimbursements or spent in shipping. Claiming for tax deductions on business expenses?
A2X streamlines your accounting and grows with you, so that you can scale your business with confidence. Try it for free today!