Claus Lauter [00:00:00]:
Welcome to episode 294 of the ecommerce Coffee Break podcast. In this episode, we talk about the crucial aspects of managing an ecommerce business effectively and scale with confidence. Joining me on the show is Tahar Ouhrouche, CEO and co founder of qoblex.com. So let's dive right into it.
Voice over [00:00:19]:
This is the ecommerce coffee break. I've top rated Shopify growth podcast dedicated to shopify merchants and business owners looking to grow their online stores. Learn how to survive in the fast changing e commerce world with your host, Claus Lauter, and get marketing advice you can't find on Google. Welcome.
Claus Lauter [00:00:44]:
Welcome to the show. Welcome to another episode of the e commerce Coffee Break podcast. Today, we want to talk about how you can power your business, how you can scale your ecommerce business, and what kind of issues and challenges you will face there. Now, a lot of businesses start as a very small company. They're operating out of their home office. They have their stock on site. They manage stock and finances via spreadsheets. But at some point, you will come to a point where this is not possible anymore, and then you will have to find systems and strategies to deal with that.
Claus Lauter [00:01:14]:
With me on the show today, I have Tahar Ouhrouche. He is the CEO and co founder of qoblex.com, and he is an expert in that field. So let's welcome him to the show.
Tahar Ouhrouche [00:01:23]:
Hello, Claus. Thank you very much for having me.
Claus Lauter [00:01:26]:
Tahar said scaling a business is not an easy task, and there are so many different things involved in there. We're talking about stock levels, order fulfillment, accounting, shipping, forecasting, inventory warehouse management, and so on and so on and so forth. Now, you're working with a lot of ecommerce businesses that are exactly struggling with these things. Give me a bit an idea. When do people come to you? What's that biggest challenge?
Tahar Ouhrouche [00:01:51]:
Absolutely. We've talked to so many businesses since we started back in 2016, and the recurring pattern that I've seen with small to medium businesses, and especially after COVID, after COVID, everyone realized that ecommerce is booming. So let's try it. So there were a lot of entrepreneurs who got into ecommerce, and they started reading all of these success stories, and they're asking, why not me? So let me give it a try. And they start with ecommerce. You start a small shop, and then you have ten orders, 20 orders a month. That's something that you can easily manage with the spreadsheet. And you go, oh, this is a piece of cake.
Tahar Ouhrouche [00:02:30]:
It's going to be awesome. I'm going to manage my business just with a spreadsheet. And then you cannot imagine the type of spreadsheets that we have seen throughout our journey with customers. Sometimes they show you a spreadsheet and you go like, my God, you just built a platform on top of excel. And they're, yeah, because, you know, spreadsheets are cheap. They move around with you. Just take your laptop wherever you go. You have your spreadsheets with you use Google sheets and it's always there, and they're pretty much easy to use.
Tahar Ouhrouche [00:03:01]:
But the challenge they have is as you move forward, as your business grows, you will have many more requirements that will come into your business. For example, if you're getting a thousand orders a month, then how are you going to deal with that? If you're skating into wholesale, how are you going to manage wholesale versus retail if you're dealing with VPLs and if you're dealing with, then you have your accountant screaming at you. Because from a regulations perspective, when you are small, there are many entrepreneurs who kind of hide, I would say. But as soon as you start making enough, then you have to report to the state. You have to have proper reporting, a proper PNL, and everything that follows with it. And the challenge there is really, how do you get all of that out of an Excel sheet? Usually when they sit down with their accountant, they're like, okay, here is my spreadsheet. And you can just look at it, and the accountant is like, no, I cannot use a spreadsheet because you can fiddle with it, right? I can just go in and change my revenue numbers. Done.
Tahar Ouhrouche [00:04:05]:
The state is never going to trust that. And if they do an audit, both you and the accountant will lose your license. And this is where these entrepreneurs find themselves pushed to the other end of the spectrum, where they have to use an ERP. And this is where they start hating their life because they wanted to start a business, they started a business. It's quite successful, it's growing, but now you have to get down to the realities of it, and then you have to deal with an ERP. And the challenge with an ERP, at least the ones that I've seen and the ones that we've tried with our customers over time, is an ERP is usually big. Some of our customers pay someone just to maintain that ERP. And then you're wondering, that's not really how the business should work.
Tahar Ouhrouche [00:04:55]:
And they most of the time get on the way because they're quite complex. And the complexity is inherent to ERPs because there are just so many things that they manage for you. But then the question is, do you really need all of that complexity? And this is basically where we get and sit down with our customers and look into this. And there have been some funny stories in the past. Six months ago, there was a customer who called us and they were like, you know what? We have a growing business. We're using an ERP, the biggest one in the market at the moment. I won't say the name, and we just want to get away from it. Can you help us? We jumped into the meeting, myself and our customer success team, and we told them, yeah, sure, we can help you, but first you need to tell me how you're using your ERP so we can help you.
Tahar Ouhrouche [00:05:45]:
And then they just started looking at each other, rolling their eyes. No one knew how it works. No one knew how it works. They just knew that they had to click that button. Click that button whenever something happens, and that's it. So we told them, you know what? In order for us to help you, you need to help us. First, you need to tell us exactly how you're using your system so we can advise whether our system is a good fit for your business or not. It was a nice story at the end.
Tahar Ouhrouche [00:06:15]:
We managed to get them on board after a lot of back and forth whiteboard sessions to really understand how their business works and what complications they had to get rid of because of that ERP. At the end, they made it, and they're just now happily running on our platform.
Claus Lauter [00:06:33]:
I think you touched a lot of things there. Obviously, a lot of people, they love their spreadsheets, but as I said, at some point it's not working. And you brought a very interesting aspect in there. I've never thought about that, that you can become or do illegal things with spreadsheets so they're not legally acknowledged when it comes to your accounting, your bookkeeping, your taxes. So that's a very interesting point. Now, a lot of businesses are cash flow driven, specifically the smaller ones that are growing. They're cash flow driven. And obviously real time data is crucial to find out where you're standing.
Claus Lauter [00:07:04]:
Same with stock levels. I think that's where an ERP really is the first point of optimizing your business, to get the data out of there. Now, Shopify is a good system, but it runs into limitations when it comes, for instance, to accounting. Tell me a little bit on how you work in this aspect in optimizing the whole business of your clients.
Tahar Ouhrouche [00:07:26]:
If we take an example of a business that is using a big ERP. Let's say, for example, SAP, netsuite, all of these things integrate with Shopify, and they come with their own accounting solutions. So SAP, for example, is a one off solution. It has everything. The challenge is too big. It's really big. So our idea is, why not pick the 5% to 10% of the features that you're using off an ERP and build that in a simple way? And then for the accounting part, accounting is quite complex. We're not going to do accounting ourselves.
Tahar Ouhrouche [00:08:01]:
We're going to give you an integration with a system like Xero or a system like QuickBooks online. So instead of having one gigantic ERP system, we sit in the middle and we bring in these integrations with these platforms like Xero and QuickBooks, and we then orchestrate all of the transaction and everything going on behind the scenes. So if you take, for example, a Shopify merchant today, you can connect Shopify directly to QuickBooks. You might know what stops me from just going from Shopify to QuickBooks. Job done. That is a good point, and that's going to work. The only thing is, you will only get one side of the story, because the sync between Shopify and Quickbooks will take all of your invoices, all of your sales, and all of that will take care of that. But then you're missing the other half of the story, which is the procurement side of things.
Tahar Ouhrouche [00:08:55]:
How do you deal with your purchase orders? How do you deal with your transfers across warehouses to your three Pls and things like that? Shopify can allow you to do this, but it's lacking the accounting, the auditing features that would allow you to trace back any unit that, for example, moved from one warehouse to another warehouse, or from your warehouse to the three Pl and all those type of transactions.
Claus Lauter [00:09:24]:
Hey, Claus, here, just a quick one. If you like the content of this episode, subscribe to the weekly newsletter at newsletter ecommercecoffeebreak.com. I score and create 50 news sources so you don't have to, saving your hours of research. Grow your revenue with ecommerce news, marketing strategies, tools, podcast interviews, and more, all in a quick three minute read. So head over to newsletter ecommercecoffeebreak.com to subscribe as at 100% free. Also, you will find the link in the show notes. And now back to the show. Makes perfect sense.
Claus Lauter [00:09:52]:
A lot of merchants nowadays go into multichannel, go into B two B, run a system where they're online but also have brick and mortar stores and things really become complicated when it comes to stock management. Now, I understand your system is about efficiency, about reducing cost simplification. In a nutshell, when a customer comes to you, what's the first thing you look at?
Tahar Ouhrouche [00:10:14]:
When they first come to us, we first look at where do they sell? Because at the end of the day, that's the most important part of their business. So we have to make sure that whatever they're doing on that side is something that we can actually work with. Recently, there was a tendency to come across a lot of these small to medium businesses that actually sell across multiple Shopify channels. Many of them actually have multiple Shopify stores. And you have entrepreneurs selling on Shopify, selling on Amazon, selling on bigcommerce, all at the same time. So the first thing we do is we try to assess the situation to see whether this is actually something that can work. And very often it happens that we actually find that they can optimize their systems. And these optimizations come in form.
Tahar Ouhrouche [00:11:03]:
For example, if you're managing multiple shopify stores, when you enter your product, when you create your products, when you're managing your media files and so on and so forth, you have to do it across all of your shopify stores. And this is one optimization that you can make where if you had a central system where you could just upload the product images and enter description and all of those things that go with the product, then they just automatically appear on all of your connected channels. That would be the first thing we do. That's the first improvement that we always make, especially with customers who come in from Shopify, running multiple stores. For those that run a single store, one of the recurring issues that we see is they're lacking the procurement side of things. When we ask them, how do you record your purchase orders today? How do you tell your accountant that, hey, I just received this much value in terms of assets. How do you record that in Shopify? And the way they do it is take a CSV, upload it to shopify. But then you ask, okay, where's the traceability? How do you control your cost? How do you compute your cost? And that's when things start really get into an interesting discussions, if you like, because then they realize that they actually not doing the right things.
Tahar Ouhrouche [00:12:23]:
So this is also something that we do for these type of businesses.
Claus Lauter [00:12:29]:
I have been in that situation with uploading CSV and then getting in trouble with my accountant because things were just not working out. And it's very difficult. There's so many different moving parts in there. And obviously you want to know, are you profitable or not? And if you get this first step wrong, you will not be able to tell if you're profitable or not. Now, let's talk a little bit about demand forecasting and analytics. Business intelligence. Overall, very important factor. I think for a small business, something new that they probably have not dealt with in the past.
Claus Lauter [00:13:01]:
How does your system help with that?
Tahar Ouhrouche [00:13:03]:
That's an excellent question. Usually when it comes to bi, when it comes to forecasting and things like that, people usually look at the financial side of things like doing cash flow, cash flow analysis, cash flow forecasting, and all of those financial analysis. The missing part is how does that translate into your assets? For example, if you go to any accounting system, you can run your PNL, you can run some, especially those that have a bi interface. They can give you a lot of insights from a financial perspective. But the missing bit is really the inventory side of things, your true assets. How does that translate into your products? When you're looking at the number, you're looking at top line, and you're looking at a bottom line, you have an idea whether your business is profitable or not. And where we would come in is we would tell you, hey, that category of products is probably something you need to get rid of because it's not working. That other category is something you need to invest and double up your investment on because that's basically where most of your opportunities are coming from.
Tahar Ouhrouche [00:14:10]:
So it's really creating the ties between the financial side of things, the financial reporting side of the story with the back end operations side of the story, tying things up again to your purchases, to your transfers, to everything that happens on a day to day basis, basically.
Claus Lauter [00:14:31]:
Tell me a little bit about multi currency, brick and mortar store, and online. I think there's a lot of what small merchants do. They start in one market and then they try to expand. Specifically in Europe, where you have a lot of countries. And that can involve a lot of complexities. How does your system help there?
Tahar Ouhrouche [00:14:47]:
For us, the way it works is that we actually have a very tight integration with Shopify. We have been working on it for the last three years. So it's quite powerful and advanced. And when you make your sales in various currencies, we grab all of that into our system. So we extract the data, we transform it, and then we load it into our systems, and then we present the data for you in different currencies. We present it to you in the customer currency, I. E. The presentment currency, and we present it to you in your base currencies obviously, when it comes to reporting, when it comes to the bi side of things, to profitability and things like that, everything is reported in your base currency.
Tahar Ouhrouche [00:15:31]:
So that's actually where the translation from the presentment currency into your base currency comes in very handy.
Claus Lauter [00:15:43]:
Do you have an example of one of your customers? And you don't need to name them on what kind of results they got more revenue, more profit they got out of by switching to a proper ERP system coming from a spreadsheet.
Tahar Ouhrouche [00:15:55]:
Yeah, he is still with us. There's a customer in the US, they are selling doorframes and things like that, and they're using Shopify and Shopify point of sale. And I remember I had the chat with them, they have been with us for a couple of years now. And I had the chat with them and I told them, hey, I'm just trying to explore, talk to our customers to see how do we help you. How is the system helping you? And I was surprised because what he said was, you know what? If we did not have your system, we would probably never achieve the numbers that we are forecasting this year. And this was in 2023. They were well into their target of making $18 million GMB. And for him, then I asked, how did we really help you? So we went into a few details, and the major part where we helped him is really when it comes to managing all of the inputs, outputs of his systems.
Tahar Ouhrouche [00:16:54]:
Because again, when you look at it from a business perspective, you have your Shopify online store and then you have the point of sale. But that's just too easy to be true. That's not how a business runs. It's not just a Shopify App Store and a point of sale. That's just the tip of the iceberg. When you get into it, then you see that there's actually a lot that goes on behind the scenes that you don't see on Shopify or your point of sale. Again, Shopify is really good when it comes to the front end. In fact, we have customers coming, for example, from Woocommerce, and we move them to Shopify because there is no reason why you need to manage your servers and things like that.
Tahar Ouhrouche [00:17:34]:
Just go to Shopify. They give you everything for free. Not for free, but pretty much for free if you compare it to what you have to spend on a woocommerce store. But then as soon as you start using it, as soon as you start growing, you'll realize that whatever Shopify offers, for example, in terms of inventory management, in terms of purchasing and so on is not enough. And this is where you need something else to help you with that.
Claus Lauter [00:17:58]:
Yeah, I know, 100% agree. Shopify is a good starting point, is a good front end. You're 100% right with that. But a business involves so much more now. I think a lot of listeners will be very interested and might be right now in a situation from leaving goodbye or saying goodbye to their spreadsheet, going to an ERP system. How does the onboarding process look like? What kind of homework do they need to do before they come to you for the onboarding?
Tahar Ouhrouche [00:18:23]:
We usually have initial call, it's like 1st 30 minutes where we don't do any sell pitches and things like that. Sit down the customer, look at their business, see whether that's something we can support or not. And if we can support that, they can jump into another call with our success team. And the discussion with the success team is really looking at their data, looking at the platform and helping them get started. And that's basically it. The minimum time I've seen, the record I've seen is a few days. Customer comes in with all of their spreadsheets from their legacy systems or the spreadsheets that they built themselves. Two days in, they're already operational.
Tahar Ouhrouche [00:19:03]:
With our platform, there are also customers where it takes more than six months because the business is just either too complex or there are too many people within that business that need to take that decision. So it might also take quite a long time, but that all depends on the business. From our side. Customers usually get up and running within three 4 hours of discussions.
Claus Lauter [00:19:28]:
Who's your perfect customer? Are there specific industries on niche that you work more with than others?
Tahar Ouhrouche [00:19:33]:
We actually work with pretty much any customers from any industry. Of course, we don't work with big customers. If you are making anywhere around $100 million a year, then our platform is probably not suited for you. You should probably go to something that is much bigger. Anything below $100 million is a good customer for us. And in fact, our top two customers are making around $60 million a year. They're making like I remember this year when we had the chat with them around Black Friday. Just around Black Friday, they made $4 million.
Tahar Ouhrouche [00:20:16]:
And all of those transactions have gone through our systems. And of course we sync everything to their accounting system so you don't have to do it manually. You get everything from your accounting, from your accounting perspective, you get your sales, you get your cost of goods, everything that you need to put into your PNL to basically get down to your bottom line.
Claus Lauter [00:20:43]:
I think 60 billion is a goal that a lot of our listeners strive for to reach that. How does your pricing structure work?
Tahar Ouhrouche [00:20:52]:
We have a base plan at $149. We originally started just like what our competition does, where you have a base plan and then you pay per user per seat per location. But they realized, for example, if you're making your users pay per seat, they will probably share the username and a password, which is not secure at all. So they would write the password on a sticky note and they put it on screen. If you want to use complex, here's the username and a password. So for us, we have a base plan. You get everything on it. I remember when we started, we had three plans where we had like a basic plan, then we had startup, and then we had enterprise.
Tahar Ouhrouche [00:21:33]:
But then we realized that even if you're a small business, you might need features from the higher plan. That's actually when we decided, you know what, we're not going to make any plans. We have a base package where you get everything enabled for you, including bi, including everything. And then depending on how your order is successful, your price is going to go up. And the idea here, or what we currently have is every thousand orders, you would pay $20 extra. That's it. And you get all the features, they all come in enabled in the base package.
Claus Lauter [00:22:09]:
That's very straightforward. And I like the principle that you follow that everything is included and you're not sort of slicing and dicing, and everyone needs to build their own solution. So that's a much better approach in my opinion as well. Before we come to the end of our coffee break today, is there anything that you want to share with our business that we haven't touched on yet?
Tahar Ouhrouche [00:22:27]:
One advice that I always give to my customers when they come in and they're like, oh, do we need your system? And I'm like, show me your spreadsheet. Is the spreadsheet working? If the spreadsheet is working, then don't overcomplicate your life, because you might think that by having all of these tools, you're going to have a peace of mind thinking that that's actually how things will work and that those tools will help you. But it's usually not the case. So what I always ask our customers is try to focus on your business, and if the spreadsheet is working for you, just go on with it. But when you start feeling the pain that the spreadsheet is now turning into pain, that's where you need to invest into tools and into processes because at the end of the day, if you have the tools, you have the processes, and the business is not there, you're not going to last.
Claus Lauter [00:23:22]:
Yeah, very true. And I think always, I reckon for some of your clients, it's very difficult to leave their beloved spreadsheet and come to something new. But they will see the advantages of a proper system probably very quickly. Where can people find out more about you guys?
Tahar Ouhrouche [00:23:39]:
They can either reach out to us via our website, there is a little get help widget at the bottom. They ping us there and someone will get back to them right away. And then we can schedule a 30 minutes call to talk about their pains and then we see how we can help them.
Claus Lauter [00:23:55]:
Okay, I will put the link in a show note, then you just one click away and I hope that a lot of our listeners will check it out. I think it's a good step to come from a manual process spreadsheets to something that helps you much more in your business. Taha, thanks so much for your time today. I think that was a very good insight on how you can grow and scale a business, and I think at some point everyone will need to do this step going forward. Thanks so much for your time.
Tahar Ouhrouche [00:24:17]:
Thank you for having me. Claus.
Claus Lauter [00:24:20]:
Hey Claus here. Thanks for joining me on another episode of the e commerce Coffee Break podcast. Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast, simply like comment and subscribe in the app you're using to listen to the podcast, and even better if you could leave a rating. Thanks again and I'll catch you in the next episode. Have a good one.