Episode 109: Introducing Shops - Easy as Presentations!

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. SkuCast is the official podcast of Common Skew.

The distributor salesperson needed this elegant, easy way to create a shop as easily as they could build a product presentation. If you would have told me this even 2 or 3 years ago, I'd have been, you're crazy, there's no way. What the distributor principal or owner needed was the tools to empower the salespeople to take on any shop opportunity and run with it completely without the additional overhead and burden of the specialists. But also the distributor The principal needed more tools so that they could build into their business that true entrepreneur's company, which attracts more and more salespeople that says, you know, I like that tool. I want to come work for these people because they make my life easy. Last month we had over 8,000 listens of this podcast, and I just want to say on behalf of the team, thank you for your support and for allowing us to join you on your entrepreneurial journey. In over 107 episodes, we've rarely, almost never talked specifically about features of Commscue. We always highlight our customers and our friends first, but we've just released something that has been in high demand for a long time, and we're excited to share in a brief episode this new feature called Shops. Hi friends, I'm Bobby LeHew, the Chief Content Officer at Commonsku. And in this episode, Mark Graham, Commonsku's Chief Platform Officer, and I provide an overview of Shops. And our purpose is, as always with our events and our platform, to help you grow dramatically and efficiently and to put fun back into business again. Real quick. SKU Camp, our business boot camp held at the Ace Hotel in Pittsburgh, is going to be a blast. It's intense learning combined with community and open sharing, and it's selling out quickly. You can learn more and grab those remaining tickets at skucamp.com. And now I'm honored to be a part of this great crew and be a friend and member with you of this community of over $650 million in revenue. Our mission is to double the size of the industry, and we'll keep rolling out resources like Shops to help fulfill that mission. Here's Mark Graham to kick us off.

For 25 years, you worked at Robin Promotions, which was noted for its leadership in company stores. Can you talk to me a little bit about your experience in building and navigating company stores while you were at, at your distributorship?

Yeah, sure, sure. There have always been traditionally two types of stores or shops. The fairly straightforward, and then the extraordinarily complex. So we'll call the fairly straightforward a shop, and we'll call the extraordinarily complex a company store. So, you know, fairly straightforward were these requests like a bank wants to celebrate a mile marker with their employees, give everyone a gift. Camp wants to collect t-shirt orders for their campers. I know that Right Sleeve has dealt with that. Manufacturing company wants to create a small incentive program. Maybe the marketing department just wants an easy way to order apparel for everyone in the company. Or, you know, sales director wants to make sure reps have all the new apparel for the season, whatever. The list goes on and on. The use cases are many. The extraordinarily complex store, though, it's almost a different type of business. So the ones I just mentioned were kind of straightforward, but there's this other model that is very complex. These stores involve multiple products, like outside, even outside of traditional promo, like variable data printing, digital products like ads, video. I mean, these stores are also very inventory dependent. Meaning the store might not be all inventory, but it requires some commitment of inventory and fulfillment. Then there are these complicated approval rules for checking out and multiple checkout options, purchase orders for shoppers. It's kind of confusing. And these stores really are about materials management. They're in the logistics business. These folks are kind of more materials management business than they are the promotional merchandise business. The promotional merchandise or merchandising part of it is just a small sliver of an overall materials management operation. This complicated model serves a very important need for very large companies. It's also a very small part of the market, whereas the fairly straightforward store, which is just a quick and easy shop, is the majority of the market.

I think that distinction between those two types of stores/shops, I think, is really critical. And at your time when you were at Robin, you focused more on the latter because you had, uh, the logistics and warehousing savvy to be able to go to market as a materials management type distributorship as opposed to a merchandising style distributorship. So, and, and, and what was nice about that opportunity for you is that there weren't many people, and there aren't many people in the, in the industry that have the wherewithal, that have the capital requirements, that have the savvy to be able to pull that off. But that was squarely the world you were in. I just wanted to clarify that.

Right, right. And I would have through the years, as you and I know, teaching about in the industry and just being well connected with folks, I'd get calls all the time from distributors who would call me and say, hey, I've got a customer and they're wanting to do this thing. They want to do the store and I've never done this before. And of course, I would have to unpack that with them. And if it was something like that complicated model, I don't even know where to begin with them because the infrastructure was so intense. How do you start to build a monolithic building like that for one customer? The materials management company, for example, who does company stores, they put usually partner with a complex platform, or they build it themselves, or more to the truth, they have a Frankenstein version of the two.

Yeah.

And then, but they also build this specialty team inside— this was our experience— who are experts at source. They have this complicated but decent response to that small yet highly demanding part of the market. They also have higher operating costs because it's also a decent, robust internal system. It's messy, but it can handle the most complicated parts of the business.

Yeah.

But one of the problems we always had was when that fairly straightforward shop opportunity comes along, which again is the majority, even those of us that are in the materials management side have trouble because we have— we would have a fairly involved process for setting up a store. Suddenly we have our team involved in a, in a much smaller program opportunity, if you want to call it that even. And ironically, it costs us more to respond to the majority of the demand because we didn't have an efficient way to pop something up.

Yeah, no, I— isn't that interesting, right? It's like almost like you were taking your big company store mindset and mentality and jamming that into, uh, or maybe applying that, I should say, into, uh, a much smaller, uh, opportunity that, that really, uh, required nimbleness, uh, creativity, like this lightness that, that, that didn't diminish the product for the end customer. But at, but at the same time, it's interesting, there's this mismatch between the larger complex store versus the lighter weight, potentially higher margin shop.

One thing that we haven't talked about yet is the demand side on the customer's demands and expectations. Those, those changed. I watched those change through the years. A customer would come to us and this is what they would say in their own words. They'd say, I want a store for my employees, salespeople, colleagues, whatever it is, but I don't want inventory and I don't want to pay for it. Sometimes they would be, they'd be vague, but that's, but sometimes they'd be very direct about it.

Yeah.

So they'd say, I want something free, easy, and yet customizable. And the problem was there were just little to no real solutions in place to answer that demand from the customer. You can answer some parts of it, but, you know, on the supply side, as I mentioned, it required— for us, it required expertise. It actually required a technologist, even if it isn't someone who's an expert at store technology. It was at least someone on staff who dedicated their time to set up these stores and manage these. And then on the supply side, you had salespeople who are navigating the customer relationship. They're used to responding to their customers quickly. With resources and partners themselves, and suddenly with a store, everything would come to a screeching halt or slow down because now they have to turn to their internal team of experts and salespeople would be aggravated and they couldn't respond to solution. I actually had to keep salespeople away from store opportunities. Yeah, the customer's really asking for something quite simple. Hey, I want an easy way to give 200 employees an option to buy a shirt. This is also why, for those that have been doing stores and know this, it's an old rule and many of us have been passing it around and it's actually not true anymore. The old rule was don't do a company store unless the client's going to do more than $100,000 in revenue. I don't know who started that. I may even be to blame for that, but it, it's not true anymore because it's so much in the game has shifted. Yeah, but back then, and even to some degree today, if you have this incredible overhead, you can't justify the energy expense. Yeah, the reason why that rule no longer applies is it's false is because of the technology has changed. Yeah, and, and somewhat of the quantities and more on-demand options are open to everyone.

Yeah, well, I think it's really exciting. I know just putting my past distributor salesperson hat on when I was first getting into the business, that there is nothing more frustrating and alienating to a promotional salesperson if they don't have full control over, over the means of production or the full, full control over being able to deliver a spectacular solution to their customer.

Right.

So in many cases, if it's a non-store type project, if it's just a regular custom order, salesperson's got the great relationship with the supplier, the supplier produces chooses the product, and boom, they're off to the races, and they've had control over that process, right? I think it's, I think it's exciting that, as you say, the technology paradigm has shifted that's now putting the control of doing shops into the hands of a salesperson, and that's never existed before because, right, right, they've always had to go, or typically have had to go, to their IT professional, whether that's internal or outsourced, and they're now putting this Uh, they're now giving up control and putting in someone else that may have a different timeline because of all sorts of different factors that they don't have control over. I mean, I can understand why that exists, because if you're a large, complicated global business that requires materials logistics needs, sure, you're, you're going to need some, some horsepower there. But as you say, there are so many more opportunities that are available, uh, to distributor salespeople that fall into these smaller on-demand, quick-turn, beautifully designed shop experiences that I think that's so exciting to think about the future of, of the, the opportunity for salespeople.

Right. As I mentioned in the intro, this is going to be sort of us briefly touching on what we've done to answer this gap in the market. So there have been two needs: what the salesperson needs and then what the distributor principal owner needs. This big gap in the market, what the market needed was that, like we said, the distributor salesperson needed this elegant, easy way to create a shop as easily as they could build a product presentation, as easily as they could just build a presentation, which is— which would have— if you would have told me this even 2 or 3 years ago, I'd have been, you're crazy, there's no way. Yeah. What the distributor principal or owner needed was the tools to empower the salespeople to take on any shop opportunity and run with it completely without the additional overhead and burden of the specialists. But also the distributor principal needed more tools so that they could build into their business that true entrepreneur's company, which attracts more and more salespeople that says, you know, I like that tool. I want to come work for these people because they make my life easy. So you've got, you've got two— we're trying to answer two demands in the marketplace, putting democratizing the creation and the power of being able to, to do an elegant and creative, fun merchandising store, putting fun, by the way, back into stores, because that's not the word you come up with when you think of stores. And then on the other side, giving the principal owner, distributor, principal owner,, more resources to build this longevity and to build this system that they can actually create more and more, incredible salespeople out of it.

So Bobby, I think there's a third dimension to this when you talk about the, distributor principal's perspective, and it's now giving them an additional tool that they can add to their toolbox and that they can go and sell another product to end customers. So it's it's a crude analogy, but it's like if you were a distributorship and you didn't sell apparel, you only sold hard goods. Yeah. If that was, if that was the case, you would have, you'd only be semi-relevant to your end customers. So this is now something that completes that picture because I think a lot of distributors look at stores or look at shops and, and will shy away from it because they say, well, I'm not the, the big distributor that can take on this business, or I'm intimidated by the, the cost and complexity of going and partnering with a Magento or a Shopify store. Um, so I'm going to shy away from that and I'm just going to do these custom orders, which is great, but there's no question that opens you up to some risk because there's other people that are out there that are prepared to do all that heavy lifting.

So, right, right.

It's exciting to think of that we're now in an environment where the technology has shifted in such a way that it's been democratized, as you say, to make So easy to go and cater to customers in this electronic way.

Right. And not only that, but stores used to be a have-to, not a want-to, not a get-to, right? You had to do it because some customer clubbed you on the head and said, we want to do this, and you're fearful of losing the business. Therefore, you had to get involved in this. And, you know, for the first time, we're seeing this become a want-to. You can involve the creativity behind it. And moreover, so far we've only been talking about store creation and it's just the start. So the reason why this was so important to us and why CommsCue decided to invest in this is that today's customer demands this frictionless buying experience that we've been talking about forever. And CommsCue has responded to the market by providing the distributor this holistic, seamless solution. It's fast, elegant, eliminates all that double, triple, quadruple data entry. So in a few mouse clicks though, you can get from presentation to store to sales order with the supplier in an effortless workflow, fully integrated kind of way.

Yeah, it's certainly very exciting to acknowledge that, that there's an alternative to these complex stores. But hasn't this type of solution been available on the market for the last couple of years?

Well, yeah, I mean, you could argue there's been simple store solutions available even with some integration aspects, but the problem was they were typically inelegant. They— bad UI, terrible user experience. In fact, they were built— they weren't really built for the user experience. They were built for the distributor. Yeah. And they were very clunky and they were really only partially integrated. And moreover, they weren't as quick and easy as, like I said, building a presentation. You still had to become somewhat of a software expert to set those up. And so this is the first time store creation has been, as I said, democratized, simplified, and streamlined for the modern buyer first. That's the key. And then for the distributor salesperson, but ultimately, ultimately always with the distributor principal in mind who wants to build a business with longevity and lots of cool tools that their teams just go out and focus on what they do best, which is selling. The problem with stores has always been it takes salespeople away from what they do best and suddenly turns them into this administrative backend team themselves. And they're suddenly— they're in this materials management spreadsheets and it's just— and it's an absolute chaotic mess. And it took, you know, just took them out of the game where as opposed to, you know, it blows my mind And a brief shout out to Michael Armstrong, our Chief Technology Officer, and his team, Brian, Shao Hand, Ilya, and Robert, for their amazing work. But it blows my mind that they have been able to comprehend this very complicated type of sell in our industry, the most complicated type of sell in our industry, and build something that you could actually create as simple as a presentation. I know I'm on the payroll here, but I'm— it's, it's pretty impressive. The oohs and ahs around our team as we're going back and forth in the development and watching all this happen has been kind of fun.

Well, what I, what I think is interesting, you, you know, just think of your background again, just to recap what you talked about at the beginning, Bobby, is that you, you've come from this complicated store world with large customer contracts. And I, and I think what we're definitely not saying is that that part of the business is dead or is broken. That, that part of the business, uh, in many ways still thrives. Uh, I don't think it's broken. I think it's really, it's, it's complicated. It has a lot of overhead. You'd expect it to because of all the complicated requirements that companies put on companies like, like Robinhood. So to be clear, yeah, I don't think we're throwing shade on that side of the market. What I think is interesting is how this shop mentality is now— has the potential to open up this massive side of the industry that has largely been untapped because a lot of distributors are nervous or they're scared of it or They didn't know that there was, uh, that there were tools out there, uh, to accommodate this, this kind of business. You'd also said before the minimum amount of spend that I, that I, that an end client would have to have in order to produce a meaningful store was $100,000, uh, in, in, in store sales and up. Right. Well, now, I mean, it's exciting to think of a store that could do $15,000 at 45% gross margin in 2 orders that took, uh, in as much time as it takes to build a presentation to create a store. Now it empowers the customer to go and place that order with the order that goes directly into the backend of CommonSKU, one-click purchase order, and that customer did $15,000.

Now, yeah, I mean, you know what, I, I need to interject, it could be a $1,000 order or $2,500. I know we— I know that sounds crazy, but that's how simple it is.

Yeah, well, and, and, and so imagine had I bumped into you 5 years ago and I said, hey Bobby, what do you think about a store that does $1,000 a year? You, you would, you would pass out laughing because you'd say, yeah, I can't tell you how much money I would have lost. I've already lost money listening to that question.

If you would have said $20,000, I would have been, that would have been like, no, absolutely not, no way. Yeah. All right, so, so let's get into this real quick. We have 3 different types of shops. Notice we call these shops and not stores. We recognize that there's a distinction in the marketplace, like what we've been talking about here, for these two different type of models to exist. All we're trying to say is we're trying to respond to the majority of the market versus the smaller percentage of the market that required the specialists in materials management. Over here, we want to focus on those that are great at creative merchandising and, and that just need an easy solution for that. So we have three types of shops: the company shop, the pop-up shop, and the marketing shop. Company shop— this is— these shops are for a single company featuring products that can be produced with supplier minimums and shipped to one location. So organizations and customers love these types of stores because it's a no-contract option. They retain complete control over the brand and a select group of products is offered. You know, it's a perfect mix between control and no obligation, and it's just so easy to set up. And this is something we always leave out— attract other buyers within the organization. So that's company shop. The pop-up shop. This shop allows you to set like a special price and then aggregate single quantity orders from individuals so that you can combine them into one order to meet supplier minimums.

Right. So if you think of an example in that particular case, what, like, what would that be?

Pop-up shop? With shops, what's going to happen is the market is going to show us many more ways than we're familiar with. But I've seen tons in my experience. So you have employee apparel programs so employees can order shirts and sizes. And that was one of the number one requests people come to us for. They would say, hey, ordering this apparel for all my employees is a pain in the ass. I don't need a full store. They would literally say this. I don't need a full store yet, but we got to start somewhere. And that's where we would get a lot of our, our programs from. And, and frankly, that's all they needed was an easy apparel ordering program. So camp programs, school programs, safety or incentive shops, like I said, this— it's celebration gifts, incentive programs. Um, so that's the kind of pop-up shop. And the fact that you can aggregate these into one single order and then you're just mouse clicks away from presentation, company store, sales order to production is just kind of astounding. Uh, and then finally we have the marketing shop. Now this is really for a shop for you to put as a distributor on your own page. It's meant to sort of attract new business. It's a great way to, to highlight, spark ideas for your clients, highlight ideas. The cool thing is you can go in, you know, Comiskey already has these collections you can build. You can easily go inside a collection and just quickly add some of these products over into your marketing shop. So let's say you have your top 20 suppliers or you've just met this cool new supplier like Ray that has this really cool product that you want to go add to your shop.

You're just—

refresh glass, right? Refresh glass, right? You go over to Ray, you go over there you get a couple of raised glasses, you pop those in here, a couple of mouse clicks, and you've added those to your marketing shop and you're done. You embed this on your website. It's just— it's really the marketing shop is for the distributor. So those are the 3 types. Again, we've got the company shop, the pop-up shop, and the marketing shop.

Yeah. I mean, I think what I think is so cool about the marketing shop is, you know, you've got all these distributors and every January they descend upon Las Vegas for PPA Expo and think about how many of them are already taking notes and recording all the interesting new exciting products that, that are out there. And now that as opposed to that being an email with a bunch of links like, hey, or a newsletter with a bunch of links that showcases all the new products that they see that they saw at the expo, they could spin up a quick marketing shop, send that out to all their customers in an email newsletter. They could also just put it up on their site. And now they're sharing the top 40 products or whatever it was that they found at Expo that every one of their customers should know about. Um, it's such an— it's such an exciting prospect because not only does that educate the customer, but think about how many of those customers would look at that and say, I want to order that product. They can do that right then and there. Yeah, the distributor hasn't done any work other than to set up the store.

Yeah, set up the shop. Right. So there have been a couple of things for this development that's kind of blown my mind with my background. And the last thing that we need to talk about, and this is new, I don't know that this has been done yet in the industry, is the pricing model for this. So we decided to price this. So for Common Cues customers, you don't pay any setup fees. You only pay when the merchandise is sold. Yeah. So you pay 2.5% of the merchandise that is sold. And here's what I love about this. This is kind of wild. There are a lot of stores that are built for customers in this industry that do nothing. So a lot of the company store providers that have the platforms, they know well, they don't— they— the best ones don't want to build shell shops. But really, there are a lot of shell shops out there. These stores yield little to no sales and return the distributor nothing. Mark, when we built them, we built the ego stores for customers because we all wanted to believe that if we just built it, they would come. And you would be astounded at the large brands that are building stores that don't do shit. Yeah, it's amazing numbers. So we knew we needed to do something different. This is CG's brilliance, actually. That's, by the way, it's Katherine Graham. If you don't know our little nomenclature there, CG Brilliance, uh, a store. Let's price this at 2.5%. Now I know that percentages can seem misleading. They're not. We're just afraid of a percentage because it seems less fixed. But here's the reality, because let's break this down real quick since we're on radio and people are probably driving. And, um, a $5,000 shop will cost you $125. Now keep in mind, this is only when you sell merchandise. Yep. So you're getting your money. You're not, you're not paying for a lot of stores that do nothing. You're not investing yourself into shell stores that don't move or don't excite the audience. You think about that 2.5%, it's a $1,000 opportunity, it's a $25 shop. At $2,500, it's a $63 shop. $10,000, it's a $250 shop. $20,000, $500. I sound like a— I sound like one of those Oklahoma— what do you call them? Yeah, you're like auctioneers.

Late night advertising.

I do. I got to tone that down a little bit. Well, you got to give me a little You got to give me a little credit here because I'm kind of excited about it a little bit. I love it. Okay. And so, and so when you, you know, think about a $100,000 opportunity is $2,500. And the thing is, you don't pay for it unless it sells. And that's what's kind of unheard of. When I— when we first started talking about this, you know, Catherine will remember, I was like, oh man, I don't— I don't know. You know, this is— this is so wild and out there. But here's what I love about it. What I love about it is that it's the conviction that we're in the business to help distributors become successful and sell merchandise and sell more. Yeah. And this is sort of a component that just backs up that mission and that philosophy and those values. We want to help people be successful. If we wanted to create a system that just built shell stores, we would have charged for every store creation and honestly just made money whether or not you made money. We would have made money when you touched it. So pricing is kind of another new paradigm, if you will.

Yeah. Well, I think we wanted to, we wanted to create an environment where distributors were not scared to create these shops. Right. In, in, in some other models, you're paying per store regardless if it does any sales.

Right.

So we wanted to remove that friction to be able to empower a distributor to create the shop, to allow them to share it with the customer. Customer and say, here are all the benefits for it, but no, they weren't paying a dime until there was a transaction. So what I think is exciting about that, about the cost model, is that it's very transparent. It's only on the, on a sale. A distributor can choose to build that into their pricing margin if they wish. And what's also neat about it is that there is the opportunity to, to check out by credit card. Of course, if you're checking out by credit card with our Card Connect or Stripe Stripe integration, there is the credit card fee on top of that. Uh, that is, that, that's a credit card fee. Sure. If you wanted not to pay that credit card fee, you could check out and have the customer pay by invoice, and that's also unique as well. So that way you'd just be limiting yourself to just that straight 2.5%. And so it allows for the distributor to understand what those costs are upfront so they can build that into their cost to maintain their margin. And they can also save on credit card fees if they wish to put their customer on invoicing terms. Totally up to them. And I think that that's, that's kind of exciting because we don't want to surprise anyone with any fees, but we also don't want to have a distributor be nervous to create that shop and put it in front of the customer because we think that as many customers should see this because it's so easy to create and it's such a compelling part of the distributor's salesperson's toolkit.

Yep, absolutely. We promised to make this brief, so if you want to check it out, go over to commonscue.com/shops where you can learn a little bit more about it. Give us a call, email us, contact us. We'd love to talk with you more about it. Mark, this is pretty exciting. You can imagine in my shoes, seeing something like this coming around is pretty cool.

And you're a tough guy to impress. And particularly when it comes to something that was near and dear to your heart for the last 25 years. In your past distributor life. And I remember at first, you know, you really did put us through the paces in terms of asking really tough questions and ensuring that we had covered all the different, you know, different elements of it. But it's exciting and it's a rare day when you can impress Bobby Lee.

Well, let me add this to the— what I'm also really excited about is that, you know, that CommonsQ, the team does not just develop and sunset things, right? They just— there's, there's constant iteration going on with the team, constant improvement. So we're just getting started. That's what's actually the most exciting part about it.

Yeah, 100%. I think that with everything, I don't think that we ever view anything as fully complete. I think that everything is always being iterated upon. I know we always love listening to feedback that we get from our customers in terms of things that could be improved or maybe additional dimensions to the software experience that we haven't thought about. And that's, that's And that's not only applies to the shops feature, but applies to everything that we do. It's very, very exciting to continue to evolve. And that's what I think modern software is all about.

Yep. Very cool. All right, Mark. Thanks, man.

You. Thanks so much for tuning into this episode of SkuCast. Be sure to keep up with our latest content by subscribing to SkuCast on iTunes, iTunes, or to our blog at community.commonskeew.com. Until next time, friends, thanks so much for listening.