Forget Marketing! How to Build a Brand Through Operational Excellence — Mo Afshar | Why Brands Prioritize Operations Over Marketing, Common Operational Mistakes eCommerce Businesses Make as They Scale, How AI is Revolutionizing eCommerce Operations (#340)

In this episode, we explore why modern eCommerce brands are focusing more on operational success than marketing.

Joining the discussion is Mo Afshar, CEO and Co-founder of Pipe17com.

Mo shares insights on how operational efficiency is key to scaling a business and maintaining customer satisfaction, as well as how automation and AI are transforming order operations for online merchants.

Tune in to learn how to optimize your backend processes and keep your eCommerce business running smoothly.

Topics discussed in this episode:  

• Why brands prioritize operations over marketing in ecommerce 
• How operational complexity increases with multi-channel selling 
• What common operational mistakes ecommerce businesses make as they scale 
• How AI is revolutionizing e-commerce operations and enhancing efficiency 
• Why connecting disparate systems is crucial for streamlining e-commerce operations 
• What types of clients benefit most from operational optimization solutions 
• Why order-based pricing aligns with customer success in ecommerce operations 
• How AI is changing consumer buying behavior and brand creation in ecommerce 
• Why operations remain critical despite AI advancements in ecommerce 

Links & Resources

Website: https://pipe17.com/
LinkedIn: https://linkedin.com/company/pipe17
X/Twitter: https://twitter.com/pipe17inc
Tik Tok: https://www.tiktok.com/@pipe17official

Get access to more free resources by visiting the show notes at
https://t.ly/BHc7a   


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Transcript

Welcome to the e commerce coffee break podcast. We discuss why modern brands are focusing more on operational success than marketing. Joining me on the show is Mo Afshar CEO and co founder at pipe17.com. So let's dive right into it. 

This is the e commerce coffee break, a 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. Welcome to the show. 

Hello and welcome to another episode of the e-Commerce Coffee Break podcast.

Today we wanna find out why modern brands are focusing more on operational success than marketing, and what is the thinking behind that, but that. Today, joining me on the show is Mo Afshar. CEO and co founder of pipe17. com, where he leads the development and go to market of an omni channel order operations platform.

We'll dive into that in a second. That simplifies connectivity, order flow, and operational visibility for e commerce businesses. With a career spending over 15 years in the technology sector, Mo has built a reputation as a visionary leader and innovator. So I'd like to welcome him to the show. Hi Mo, how are you today?

Hi, Claus. Great to be with you. I'm well, thank you. 

Mo, we're seeing a shift from marketing focused strategies to operational excellence in e commerce. Can you explain why this transition is happening and what kind of implications does it have for brands? 

Yeah, absolutely. So I think, look, I think the selling problem, you know, when we looked at this space in general, when we were, you know, thinking about one of the projects we wanted to do pre pipe 17, we looked at kind of a few different areas, but The whole concept of selling has been made incredibly.

So if you look at what, you know, Shopify does, it makes it incredibly easy to set up a store and get selling within days, right? And then if you don't even want to set up the store, of course, Amazon and other marketplaces enable you to start selling. Basically immediately you send them a pallet. And they send you a check.

So, so the whole area around I think selling to us is an area that's had Tremendous focus on it from both big players and small players and so when we started looking at the space the real question we asked ourselves is this which is How do people handle operations operations is always the last thing that anybody thinks about and I can You know, I spent quite a few years at oracle, you know Building different businesses and stuff and acquiring them and the one area that we always Kind of, I think SOAR was underinvested, both from a software vendor perspective, as well as from a customer perspective, was operations.

And what is operations? Ultimately, it's about making sure your business runs smoothly, ensuring that you can meet customers where they are. So these days, it's social channels and retail for those who have retail, ensuring that you deliver things to them on a timely basis, ensuring that you have great service.

Thanks. And then doing that at low cost, and you know, the combination of those things doesn't compute, which is kind of why what we saw as an opportunity and the reason it doesn't compute is because in essence, they seem to be conflicting things I need to sell in more avenues, and I need to provide better customer service, but I can't do it in a very costly way.

How do I do it? And that to me sounded like a perfect problem to try and solve. 

Mm hmm. No, it makes perfect sense. I mean, as you said, getting online, having a platform where you can sell and hopefully getting the marketing right, which is a beast on itself. And now if you're lucky, all the orders are coming in and then scaling.

And I think that's where a lot of brands really lose their reputation, lose out on opportunities to get a broader market share is when all the operational has hiccups. So what are the most common operational mistakes that you have seen? 

Look, I think when we, when we start looking at, you know, when we work with customers.

And we look at their operations. I think that the operational challenges arise in kind of a few buckets. The first one is expanding the reach. So let's, let's say that they're already selling on Shopify. It's kind of, that's the archetype example of BigCommerce and they're shipping out of BigCommerce.

Maybe a 3PL, right? So that's kind of a pretty simplified area. And the main operational challenge there is going to be in making sure the goods actually arrive at the 3PL in a timely way. And of course we saw with the, you know, supply chain challenges we had a few years ago that that's not a non trivial task.

As, as, you know, brands evolve and they 30 million. And retailers, in fact, what you start to realize is that you need to add more channels. So obviously on the retail side, you need to deliver a true omni channel experience, which people are still struggling to do. On the brand side, you need to meet consumers where they are.

So there's more things to connect. Whether it's selling channels, whether it's financial systems, because you want better reporting, whether it's return systems, and of course, if you want to deliver things in a timely way, you need to have more than, you know, in the U. S. certainly, you need to have more than one warehouse, unless you want to pay for shipping.

So, as you start to get more and more systems, That's operational complexity goes up, and that's really where most of the struggle comes in for most brands and retailers is they've got a ton of different systems that need to be connected, things like marketplaces, selling channels, return systems, ERPs, data lakes, 3PLs, the list goes on.

And that complexity on the whole creates the huge amount of headache that they normally solve with spreadsheets and developers. And that's where the fun starts. 

I can relate to that. Um, I can fondly remember the times when I was still dealing with spreadsheets and I hated it. And now we have one big advantage that we didn't have at the time.

AI came around the corner. Yes. So for the last, I dunno, one and a half, two years, AI is a big topic everywhere and obviously it's AI is zipping through in every part of business. Now, how can you use ai? In the part of e commerce operations are 

great question. So kind of maybe I'll recap a little bit what we do so that we can kind of have clarity for the audience.

So what do we do? What is pipe 17 do in very simple terms? We connect all of your operational systems and get your orders to flow in a very optimal way, right? So that's kind of what we do. So if you look at kind of that whole proposition and the reason kind of why we built pipe The company the way we have is that we fundamentally believe that most of the operational challenges that brands and retailers and in fact service providers have is due to the lack of connectivity between their different systems, which is where spreadsheets coming because if the systems are connected, what do you have?

Oh, I download the orders from here and then I put it there and these kind of things. So I think our whole thesis has been around connect and flow being the cornerstone and the real solution. To the operational challenges that, you know, brands, service providers and retailers have. Now let's talk about ai.

So look, there are a number of areas and there's a huge amount of interest, and I'll talk a little bit about operations and we can talk big picture around what AI brings. But in essence, we've focused on, on a few areas, which I think operationally are key. The first one is to ensure that you can connect your systems in the same way that you know, you use Dropbox.

Which is not possible today. People use developer tools. If I want to go and sell on TikTok shop, and I want to connect TikTok shop to NetSuite, or I want to connect it to another ERP like Acumatic or SAP, it's a six month dev project, right? And we have managed to do that in a matter of hours, and with AI, the simplicity goes up, and the repeatability goes up.

So one thing is just connecting, setting up your operational environment is much, much easier. With AI. The second area is. Understanding and identifying anomalies and errors early and I think this has been a huge thing for us because obviously, you know, we deal with physical goods and so, you know, if things like double shipments happen, that's very problematic, you know, for the brands and the customers and the retailers.

So we basically used essentially. AI in order to monitor our own system and to look for anomalies, right? Because the system develops an understanding of what the right behavior looks like. And over time it starts to flag to the user, Hey, I think something's wrong. Or in fact, just start limiting things that are happening that it thinks are wrong.

So users can go in and check that. So kind of the second area is operationally to make sure that our system is. Running in an optimal way. The third thing is, you know, insights. And I think, you know, this is a combination of data and AI, but by by having a system monitor what's going on in your operational environment, watching the orders come in, both on the direct channels from the retail channels, whether it's like Mercado Libre or Nordstrom, or, you know, one of it.

Other retailers so I can monitor and our system can monitor all of the orders that are coming in and then flags things that potentially have changed or things that potentially are wrong so really helping helping the operational people truly understand what's going on and then forcefully make proactive recommendations.

Hey, by the way, you know, we've monitored your cost on the shipping site and we think you probably want to start thinking about another 3PL location, right? Because you're paying a lot for shipping. So, so kind of bringing all of that together from a cost and operational perspective and kind of our vision is this, that operational people, whom are the people we are catering to within commerce and retail businesses have a teammate.

And that is the AI. And that AI enables them to work much more effectively and much more efficiently than they could ever do before. And that AI teammate for Ops is really kind of the vision that we're driving forward. 

Hey Claus here, just a quick one. If you like the content of this episode, sign up for our free newsletter and become a smarter Shopify merchant in just 7 minutes per week.

We curate content from more than 50 sources, saving you hours of research and helping you stay on top of your e commerce game with the latest news, insights, and trends. Every Thursday in your inbox, 100 percent free. Join now at newsletter. ecommercecoffeebreak. com. That is newsletter. ecommercecoffeebreak.

com. And now back to the show. I love the approach that you see it as a additional team mate, because usually, and I think that happens when you grow fast, or even if you're already established as a company, that is difficult to see the forest because of the trees, because you're in your day to day business and you might not pick up on arrows.

Or on what you just mentioned, and then normally you get some external experts in, which is very expensive, very time consuming and so on. And the approach with AI seems to be a very good solution to optimize your whole organizational structure and just. Getting things ironed out and optimized. Now, give me an example.

You mentioned a couple of solutions there. Probably every client that comes to you has a different tech stack. What's the first step when, when they come to you, what's kind of the onboarding process? 

So let's talk about kind of the different kinds of clients that come to us. So we kind of largely have three kinds of clients come to us, right?

The first one is companies that are, or want to, sell and fulfill on multiple channels. Oh, they've already set this up, but they want to do it in a more efficient way. So, you know, there are many companies we work with, like Wise Labs, which makes, you know, home security cameras and Mary Ruth organics, but customers like those all kind of have this thing around.

We want to be able to reach consumers where they are, which means more channels, right? We want to sell through Costco, which is one of the box retailers in the U. S. And we also want to be able to sell through other marketplaces. We want to have retail locations, but we want to do that in an optimal way.

And we don't want to have to do it with spreadsheets. Or build the automations with developers So that's kind of one class of customers who come in and they want to deliver a true kind of omni channel experience Or they've already built it and it's too expensive or too unwieldy because it's spreadsheets The second one is I think brands and retailers who kind of want to deliver that omni channel experience but are Expressly after the cost side because they've spent a lot of time and money building things Infrastructure out that they think is outdated inflexible and you know hard to maintain it and so work with many customers like that customers such as a spree jeans so i know you grew up in europe class so you kind of know about them and i did too so people like a spree jeans or ethereum or others.

Who kind of look at, look at the world in which they operate and they say there has to be a radically more efficient, better way to do things because the way you looked at the whole retail landscape 20 years ago is not the way you should look at it now because there are simpler solutions for selling.

You can go Shopify and big commerce. You don't need to go to one of the legacy vendors for the back end. There is a better way to do it when you compare to spreadsheets or developers. And it's kind of pipe 17. So that's kind of a second class of customers. We're like, we want to transform our business.

The way we're working is not enough. It's costly. It's, it's not agile and it's expensive. And then the final type is, um, service providers and think UPS, right. Which is kind of the classic, you know, service logistics providers, and they have the same problems as everybody else does, they need to be able to connect to their customer systems.

So if you're all birds, which, you know, makes training shoes or. If you're, you know, wise labs or maybe Ruth or many of these other customers that we have also tools you need to be able to connect to the customer systems and one day it's a miracle marketplace the next day is an ERP one day is SAP one day you need to support returns so it becomes a very complex problem for you as a service provider in order to connect.

Your customer system so if you really think about it the kind of customers that we have are people who doing omni channel going into it already done it people who want to transform their business typically retailers are kind of the most common thing and then service providers in terms of kind of like how do we think about the whole onboarding process look I think.

Our software platform makes it incredibly easy to do very hard things. And so kind of, we were, we were chatting, you know, earlier about the complexity, which we make simple is something that people see once they see it, you know, they can't unsee it. So for us, kind of from an onboarding perspective, the most important things for the customer to understand how they want their order flows to work, how they want their systems to be connected, what Where they want their product catalog and product master to come from and then basically to just configure that in our tool, because there's no developers required here to configure that.

So probably, you know, the most important thing with us as we say to any customer is just make sure you capture your requirements because the actual setup is super simple, but you have to set it up in the right way. And the setup is Doesn't require developers, so it's super easy and for simple use cases, we can, you know, customers can set themselves up or we can help them set up in hours for more complex use cases where you got multiple three PLS and multiple cell channels.

It could take a few weeks, etc. So it's really optimized. But the most important thing on the homework side is, you know, make sure that. You, you're not the 1 percent customer that wants everything done in your own way. And you're not willing to do it in a way that everybody else is doing it. There are some, and for good reason, and then secondly, capture your requirements so that we can save you time and money.

I think it sounds like a massive time saver, already just cutting out development software development, you have a ton of connectors and API, which straight connect to one system to another, and you get everything in one place. And I think what's important here, what I see and correct me if I'm wrong, is like you sort of eliminate kind of operational blind spots.

poor connectivity, bad data, all of these things just vanish and you can concentrate on what you do. You mentioned a little bit on a timeline that can obviously vary. The homework you mentioned, what does a potential client for you has to do before they approach you? What kind of homework? 

No, great question class.

So the first thing is we, this is our homework, which is we qualify to make sure that the requirements that they have fits completely in the auspices of our system, right? And that's kind of more qualification on our side because, you know, as a, as a company that's trying to innovate and disrupt the way people do this today, spreadsheets and build it yourself.

We need to make sure that all of our customers fit really well in the confines of what we do. So, you know, I think. Generally, the first step is for us to qualify with the customer to make sure that there's a really solid fit. The second one is requirements capture, which I think the one way to streamline the setup of our system to make sure you capture your requirements in an adequate way.

I'll give you one example. So let's say you have a customer with a NetSuite as an ERP. And they have a PIM somewhere else and they want the PIM to be the product master and they want that product information to be pushed into both the selling channels as well as. Into NetSuite. That setup is different to a customer that wants their product master to be NetSuite and doesn't have a PIM.

So just making sure that you capture specifically the desired way in which you want your system to work is the most important thing. So for example, you know, do you have The need to support kits and bundles and how do you want the broken down and how do you want them reflected for your inventory? Do you want all of the broken down items reflected in your inventory as well as the bundles or one of them?

So there's a whole bunch of questions that we go through during the onboarding process, which is really simple, but we go through to make sure that the customer. Can communicate to us exactly how they want the desired system to work and then it's just set up and they can start testing and flowing orders.

It's really simple. 

Okay, obviously, I think it might be difficult to answer this question because there's so many variables in there. But how does your pricing structure work? 

It's actually super simple. So we align our pricing around the customer success. And what I mean by that is for brands and retailers, it's order based pricing.

So there is kind of minimums we expect, but it's a price per order. So you flow an order, you fulfill it, you make money, then you can pay us. So that's kind of broadly speaking, how it works. So it makes it super simple for service providers. They basically kind of have both a platform fee, which primarily is the kind of major part.

Because the unique thing about a service provider is, you know, if you're UPS or if you're, you know, loop returns, or if you're Caro or another marketplace and you use pipe 17 within your system, you're using that to connect many different sellers. Into your system. So for that, it's kind of a little bit different, but we have super transparent pricing because we think kind of part of the thing in our business is to make sure that customers can clearly calculate and evaluate the savings that they will have from using a system of ours.

And it's really easy for this order based pricing because I know if the orders go up, you know, they typically will pay us a bit more. But if the orders don't pan out, they typically don't. So it lines up with how they want to work. 

Okay. No, that sounds great. Before our coffee break today comes to an end, is there anything that you want to share with our listeners that we haven't touched on yet?

Yeah, sure. I think, look, a couple of things relating to us, and then there's some super interesting things kind of from an industry perspective. I think with us, look, we believe operational challenges in the commerce domain are the next. Problem to be solved. The second thing is we we fundamentally believe a pipe 17 that the right way to solve those set of challenges is to understand where they come from, which is most of the operational challenges that brands, retailers and service providers have have their root in core connections between different systems.

And because of those poor connections, they struggle. They either use spreadsheets or they get an army of developers to connect these systems up. And we fundamentally believe, and our customers would say that the pipe 17 solution enables them to connect all their systems up, flow all of their data, including the order data, provide a much better customer experience, sell where they need to sell, and then also provide that at much lower costs than any alternative.

That they have and i think this is kind of a fundamentally different way of thinking so what i would do is i'll challenge your listeners running e commerce businesses is how much time and effort do you spend on operations and is that something you want to be doing because we think there's a better way to do this and customers of ours such as a tyrian who.

Have really gone through this journey and, you know, their public company, and they've talked about how much money they've saved by having an out of the box solution, like pipe 17 would attest to that. The one other thing I'll quickly touch upon is, you know, AI is, is a kind of big fundamental shift in, in how people buy.

And how we, and in fact, the community can service those buyers and how brands can be created. So that's a super exciting area to watch. We can talk more about it on another occasion, but we think that's a fundamental shifts going on that make it much easier or different. To connect to consumers. I mean, a lot of consumers, you know, they use a chat like interface to look for goods.

They don't go reading. They don't look at ads. Well, brands that optimize for that experience are probably going to do quite well. And then on the provider side, it's getting much easier to create brands. You can go and create a brand. You can get a chat GPT to create a shirt for you with your own branding for your own own audience in minutes.

What does this do to. people who want to create brands, we think operational challenges remain. And that's what we're here to solve. And we'd love to partner with, uh, you know, great brands and retailers and service providers who want to do this. 

Yeah. I think we're living in very interesting times when it comes to AI.

I think a lot of people, and I reckon all this, those are only scratching the surface of what you can do with AI and there will be big changes, but I agree the operational flows that you have in the backend, they will not change. And AI helped you to. Basically work on your business and not in your business and having AI and tools like yours in the background doing the hard work.

I understand you have a LinkedIn newsletter. For whom is that targeted? 

It's typically targeted for anybody who's interested in the commerce area. It's not, it's not so much about us. It's just about general trends we see in the commerce news and trends we see within the commerce domain. So definitely would advise folks to sign up to that.

And then if you want to know more about AI, there's a, there's a recent webinar series, which we're doing and we're kind of, A quarter of the way through that, which would be interesting for folks to check out. 

Okay. Where can people find out more about you guys? 

Pipe17. com. 

Cool. I will put all the links in the show notes.

Then you just one click away. Mo, thanks so much. This was a very interesting chat. I think your tool is amazing when it comes to connecting all these things. And, um, for our listeners, rather think about putting a tool like this into place rather sooner than later and get away from spreadsheets. 

Get away from spreadsheets, indeed.

Thank you, Claus. 

Have a great day. Thank you. Hey, Claus here. Thank you 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.

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