Expanding Globally: Mistakes To Avoid And Keys To Success — Sharoon Thomas | How To Start Global Sales Easily, Why DTC Brands Struggle To Scale, Why You Need Local Entities, Why Market Testing Saves You Money, How A Phased Rollout Avoids Failure (#392)

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Expanding into international markets can jumpstart growth for e-commerce brands, but proper systems are crucial for managing the increased complexity. 

In this episode, Sharoon Thomas, founder and CEO of Fulfil, explains what it takes to successfully scale globally. 

He shares insights on when to transition from simple systems to more robust solutions, how to manage multi-entity operations, and the importance of balancing business complexity with effective technology infrastructure. 

Topics discussed in this episode: 

• Why scaling internationally is harder. 
• How returns management becomes critical. 
• What determines if a market is worth it. 
• Why multiple legal entities become necessary. 
• How to recognize when spreadsheets limit growth. 
• Why multi-warehouse inventory creates visibility issues. 
• What makes multi-channel selling complex. 
• How open APIs outperform traditional ERPs. 
• Why real-time financial visibility matters. 
• What implementation approach prevents ERP failure. 

Links & Resources 

Website: https://www.fulfil.io/
LinkedIn: https://www.linkedin.com/company/fulfil-io/
LinkedIn: https://www.linkedin.com/in/sharoonthomas/
X/Twitter: https://x.com/Sharoonthomas 

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Transcript

[00:00:00] Every brand that has gotten to nine figures late, eight figures. They have gone beyond the US market to sell somewhere, but trying those first few orders or listing the product on Amazon, sending some inventory to FBA for different countries and selling, starting that is easy. Very easy. Shopify markets, all of these products make it even more easy to sell there, [00:00:20] but scaling becomes harder.

Hello, welcome to another episode of the e-Commerce Coffee Break podcast. In today's episode, we are talking about what it really takes to expand into new markets, especially from assistance and operations point of view. Our guest today is St. He's the founder and CEO of fulfill [00:00:40] a cloud ERP build for e-commerce brands that have outgrown spreadsheets.

He spent last decade helping eight and nine figure brands streamline operations, connect systems, and grow without the chaos. So let's welcome on the show. Hi, how are you today? Hey, thanks for having me, Claus. Yeah, great to have you on the show. Let's talk about growing companies. Let's talk [00:01:00] about expanding into new markets.

All of that ex is exciting, but if systems can't keep up, that might be a a huge mess. What's is the point you see where companies fail the most when they are growing? Yeah, so it's still super easy to experiment with new markets. Every brand that has [00:01:20] gotten to nine figures late, eight figures. Have gone beyond the US market to sell somewhere, but trying those first few orders or listing the product on Amazon, sending some inventory to FBA for different countries and selling, starting that is easy.

Very easy. Shopify markets, all of these products make it even more easy to sell there, [00:01:40] but scaling becomes harder. For example, one stumble that I think most brands forget before they start doing this is handling returns. When you handle those returns, you're not getting a duties refund. You're not getting those tax refunds either.

So. It requires a decent enough setup in each of these [00:02:00] countries to do that. So when US brands expand, they usually expand into Canada, relatively easy to expand into, but once you start having uk, and so one does a threshold at which you have to have a local entity. So there's tons of things that you step into and you very quickly end up becoming, uh, multi entity brand just because you're selling in different locations.

[00:02:20] Starting is easy. Scaling is hard. Yeah, that's very, very true. So what's the first thing that they should look into when they wanna scale their systems? So I would experiment with markets and see if there is sufficient demand before you really end up burning a lot of ad money and [00:02:40] scaling a new country.

Mm-hmm. So, mm-hmm. So once you make the decision that it's the market that you wanna scale in, then. The strategy changes quite a bit until then having a merchant of record could be Shopify, could be somebody else that's selling for you. There could be through Amazon. [00:03:00] That's where I would limit. And once you feel confident that that's a market that you really, really want to scale.

Then you either start with a three PL and at some point set up a legal entity there. Some of our brands also operate stores. So the moment you have your first employee in a physical store there, you typically need a local entity, [00:03:20] a local company where you have one more place where you need to file taxes and returns and all of the transfer pricing complexities, everything kicks in.

So figuring out, is this really a market you wanna scale? Making that decision is the critical point there. In the beginning we, I mentioned a lot of companies start with spreadsheets and then every [00:03:40] startup starts with spreadsheets and then at some point you have outgrown them. So, and then you look into your tech stack and see what can take, can take over there.

Tell me from your own experience, uh, what do you see in the market, how brands deal with this issue? So spreadsheets. On its own, I don't think are a bad thing. I think everybody [00:04:00] ends up having spreadsheets even after they get an ERP system and so on, and there's always spreadsheets that fill the gaps there.

It's when spreadsheets become the wrong tool for the job when it's leading to poor customer experience. And when you're spending a lot of time just building around and throwing people at the problem. So when people ask act [00:04:20] as seducive at spreadsheets, it's not deductive, that's when you should start looking at, Hey, what system should replace the spreadsheet, if any?

I. Of the opinion that many companies out there, even at eight and nine figures, don't need ERP systems if their business is simple enough. It's the complexity of the business [00:04:40] that determines whether you need a system or not. So we spoke about global expansion. You expand globally, you have multiple legal entities Right away it's enough complexity to warrant.

That not being done on a spreadsheet, but are you thinking about a forecast for a specific, uh, brand? Means, [00:05:00] despite all of the millions of dollars that gets spent every year in building forecasting software, I still find a spreadsheet mixed with founders. Gut Instinct is usually the best forecasting system out there than any tool out there really.

Okay. Um, I think that feeling of founders, that that's something that's definitely [00:05:20] averse looking into it. Um, but not everyone is equipped with that. So if you're growing in a lot of directions, and you mentioned companies, products, um, entities and so on, so forth, how can an ERP system help them to stay in control?

What are the features that help there? So ERPs either become the complexity in your [00:05:40] business or they solve complexity in your business. For D two C brands, complexity comes from a few different places. If you have inventory in just one warehouse, that's not complex. You can track it, you can count it. If you have more control, it's even easier.

The moment you have inventory in multiple warehouses, you have [00:06:00] an East coast warehouse, a west coast warehouse, one in the UK and so on. Now it's different systems. Aggregating inventory across the board, making sure you haven't lost anything that's complex and solving that well saves you money. Uh, and the software pace for that.

That's one type of complexity. The other type of complexity as brand scale [00:06:20] is they go beyond their D two C channel. They go e-com, they start physical stores. They sell through Nord, storm and Targets and Walmart. So when that happens, all of these different channels have completely different contribution margin profiles, completely different ways you get paid.

That adds complexity even [00:06:40] with D two C as you expand globally. In the US you know, you get paid credit cards, maybe affirm PayPal done. The moment you switch to another country, now you have another currency. You're getting paid and that adds complexity. So it's the complexity of the businesses that warrant something, uh, like this.

If not, it's [00:07:00] just not worth of solving as a problem. Now that might scare a lot of our listeners that are growing into eight or nine figures over time. And when is the right point to make a decision to move to a new structure, to a new system in your business? Again, I think the key factor that I, I, revenue is a decent [00:07:20] proxy metric, but I don't like using it because we have merchants that are low, seven figure merchants that have, uh, manufacturing in-house.

It's a. Right away. You have so much complexity in managing raw materials in addition to selling SKUs and all of that, that is better [00:07:40] run with a good system. We also have customers like, uh, that have come in very late, like 30, 40 mil, uh, at which, when they added new sales terms, but they scale the business with just Shopify and just one warehouse.

All the way onto there. If you did that, I would try and see how far that would go, because keeping your business simple [00:08:00] has value. Uh, one of my favorite examples is Moise, uh, who ran native, who founded Native. He used to play pay suppliers ahead of time. Every D two C brand is trying to get better terms with suppliers.

Mm-hmm. But instead he just paid them upfront, got a discount. He doesn't have to now track payables and when cash is gonna [00:08:20] go out and so on. So he reduced complexity from the business, but he sacrificed cash instead. So you're making trade-offs all the time. So if I would keep the trade-off of keeping the business simple as long as you can, but there's a point at which scaling without adding complexity is not possible.

That's the time at which you need to start considering [00:08:40] systems. Now you obviously have a lot of brands there, and when they come to you, um, they might have been in a huge mess. What's your pathway to your onboarding process to get them really aligned to your system? Yeah, that's the interesting, uh, part, right?

Like when people come in, they have multiple SKUs that are [00:09:00] actually the same product. Uh, so kus don't match between different channels. Like, so part of the core features that ful provides allows for some of this. So you still standardize around a sku, then you have. Different skews for different channels, but they all aggregate to the same one.

So that's part of the product that solves the problem. The harder parts of it, how we implement has changed quite a [00:09:20] bit. We have now started throwing in a lot more AI into solving some of these messes. Like for example, one of the things that we are doing right now is when you're migrating from a legacy system, you bring your chart of accounts with you, but Full Fulfill also has a core chart of account, which needs some basic accounts to be in place.

Today that merging is done [00:09:40] more or less by ai, which is evaluating both of these, comparing them and helping you make those decisions. When you move to fulfill, you also usually don't need as many different accounts. Like it's typical for customers to have things like, Hey, revenue from D two C, revenue from TikTok, revenue from Amazon.

Uh, you don't need separate gls for that. Fulfill manages them as classes automatically, [00:10:00] so you content all of them into one single gl. So that sort of migration, which used to be very manual by humans, it's now done a lot more by ai. So it's a blend of that and it does take quite a bit of our consulting and experience seeing other brands and, uh, helping brands that are coming on board [00:10:20] rethink some of these processes and data.

I wanna dive a little bit into the tech stack. Um, companies who say they're coming from Shopify, they're coming from Amazon, there might have been custom built solutions in their business. How do you support different tech stacks, um, with different APIs in your system? I. So Fulfill has [00:10:40] a hundred percent open API.

So when we started fulfill, one of the big challenges that we had seen as founders was, uh, ERP systems, even today, are typically designed to be highly customizable, but that ization is done in the language of the platform. So you learn [00:11:00] the language, hire a bunch of consultants, they write these customizations.

Then the problem is maintaining these customizations becomes a yearly retailer and work. Then when the next release of the ERP system comes around, it breaks. Now, this is not unique to ERP systems. If you remember how Magento worked, which used to be a very, very popular eCom platform 10 years ago, this is exactly the [00:11:20] situation.

You upgrade from one version of Magento to the next. All your extensions broke. All your customizations broke. Shopify flipped that on its head. They exposed an API and as long as they kept their API contract. Like they didn't break things too much on their API. It worked. We took that playbook so we, in, instead of allowing too much customization in the [00:11:40] product by writing into the product, we opened up a hundred percent of our API.

So merchants build on top of our API and as long as we keep our APIs backward compatible, don't break them for two years, it's. Much easier for merchants to keep that sort of customizations and things going. That is what also allows them to bring in, [00:12:00] uh, if they have custom tools that they had in the past, they get to build them on top of it.

My favorite example now is how people are building these apps on top of our API. But using ai, so using things like rep and so on, it's made it so much easier. We have a CEO in our, uh, customers network who's building a [00:12:20] whole new planning and forecasting tool based on how his mind works. But now he's using AI to build all of this tooling, and I, I think it's great.

I think it's such a value add for the business. That, that's, that's very interesting. Um, I, I was part of a, um, presentation a couple of days ago, and I'm impressed how quickly you can develop AI solutions and, oh, my, my God. It's, it's [00:12:40] just completely insane. And I, I like that you say that due to your open API, you basically can slot them indirectly into your system.

Now talk me through who within an organization is working with your system? How does their normal day-to-day life looks when they are in your ERP system? So typically most of the [00:13:00] company comes on the platform, so that starts with purchasing because they have to send out the pos that warehousing will receive.

If you operate your in-house warehouse, then everybody in the warehouse and warehouse manager, picker Packer, everyone gets a login. They all use the product. If you are using three pls. Three pills don't get access to the [00:13:20] system. They get API access to the system for just the shipments that they operate.

Your finance team definitely gets access to it because they're the ones paying the bills and managing all of that. Your channel managing teams, merchandising teams, they also, uh, set up products and fulfillment settings that's managed by them, so. Pretty much most of the org [00:13:40] ends up using this as a single point of truth for orders, inventory, finances, and so on.

For someone like somebody who works at a warehouse, they log in and they start their day. They log out at the end of the day, uh, and that's when their workday ends. Other roles less so, [00:14:00] uh, like purchasing when you have to send out a PO when you're planning and so on, is when you would use the system. But this ends of being the live active system, uh, throughout the day for most things.

It also shows that this is a very integral part of your business at the end of the day. Um, you already shared a couple of stories. [00:14:20] Can you share some success stories or case studies of business that have moved from another system, from spreadsheet into your system and what kind of results they saw?

Sure. More than spreadsheets I would. Be an example of a typical brand that's operating at scale where they're using an existing legacy ERP system or [00:14:40] a mix of different systems and spreadsheets in between. So typically they're selling on four or five sales channels. They have something like Shopify, which is usually the most easy one to integrate, and it's probably directly talking to your three pill.

You typically have Amazon likely the same thing as well. Then you have wholesale channels like fair, which don't flow in exactly [00:15:00] the same way. So they pass through something like Shopify and go into, uh, into your mix of orders. Some of these orders remain unpaid, so you really don't have an idea on, Hey, what's your true AR at that point of time?

Because you're not really tracking any of it. From a finance standpoint, it's so hard to keep all of these [00:15:20] transactions because each transaction is $20 and $30 that. Uh, the way your team operates is you're booking revenue based on the payout. So when Shopify pays you every two days or three days, or when Amazon pays you every week, you're using that payout to recognize revenue and fox.

So, you know, month end typically takes a lot more to close [00:15:40] because you're now waiting for all of these things to fall into place, and most of your accounting is a guess at that point. Compare that to what the world looks like. Uh, with something like Fulfill, you have all of these channels that are natively connected, so you're not depending on a third party to connect to these channels.

D two C channels is what [00:16:00] we live and breathe, so they're all native. Your three pls are all connected from Fulfill, so you can route any order to anyone. In fact, you can even take a Shopify order and send it to Amazon to fulfill because you had inventory there. So all channels, all of your inventories available to all of your channels, depending on how you configure each transaction as they come in and go out [00:16:20] behind the scenes, accounting is being booked live, so that means you can go into your reports and pull up your income statement, and at any point of time you can see that this visibility is what.

We help brands with, and there are tons of brands out there that are, that are, uh, using, fulfill this way. And I've switched from using something like, uh, NetSuite or, uh, [00:16:40] QuickBooks and Xero as their system with spreadsheets as glue to this sort of amount. Yeah. And that shows that your system is built for e-commerce.

Um, what you just mentioned, um, a lot of brands out there unfortunately are flying blind when it comes to their financials, and a lot of D two Z business are cashflow driven, so there might be just one hiccup and then [00:17:00] the whole company is in, in, in bad water, so, exactly. B2C. The big challenge is scale, right?

Because if you think about a traditional business that was doing wholesale, each order is 10, 20, $30,000. You want to get to a hundred mil. That's just a few transactions. EDC, you're selling $20 $30 products, and how many transactions do [00:17:20] you need to get to eight and nine figures? That's a lot of transactions and most systems that are not designed for D two C don't handle that.

Yeah, absolutely. I, I have been many years ago at this point where I exactly had systems that were not built for e-commerce, and it is just a complete nightmare. So tell me, who's your perfect customer? So, our perfect [00:17:40] customer has complexity from multiple channels they sell in, has complexity from multiple locations where they store inventory.

And that's a good place for us to start where they could be fulfilling in-house, they could be manufacturing in-house, they could be purchasing and shipping, uh, drop shipping. Doesn't matter what the workflow is. The moment you [00:18:00] have these different workflows, you have the complexity that we can help you reduce.

Is there any kind of homework that the brand merchant has to do before they can get started with you? Yeah, so we definitely do work with brands as part of our process, so we, I. Our sales team, for example, [00:18:20] would tell you no if it's not a good fit, where we can, we are not the best at solving some of the problems that's there, but when we are, they will work with you on putting a scope together.

That scope would, uh, see what needs to be a good phase one, because big reason why ERP implementations fail is they try to take a big chunk [00:18:40] and try and go with a big bang implementation. Let's solve all problems in one go. Typical recipe of failure. So you start small and say, Hey, what's a good phase one look like?

And when you pick that phase one, you start digging into, Hey, how are all these things connected? What problems are there? Are there barcodes that are missing? So we right away communicate to the [00:19:00] customer that you need to start talking to your suppliers to put barcodes on the product. So. And one point, once you rotate through the inventory, now you have barcode control inside the company.

So there's definitely homework to be done depending on where the brand is in the, uh, in different areas. And that's something that our team helps with. No, that makes [00:19:20] perfectly sense to go step by step, specifically as you're growing, there's so many moving parts in a business and you wanna make sure that everything is optimized.

How does your pricing structure work? It's very simple. Two parts to our pricing. There's a one-time implementation fee, and we do all our implementations. We are not hunting or looking for a consultant. Uh, it's on us, we do it. And the other [00:19:40] part of it is a subscription fee. The subscription is based on GMV, so you, you should feel more or less like, uh, Shopify pricing to you where it's GMV based subscription and whatever.

It goes to implementation, but instead of depending on a third party or depending on our team. Okay. No, that's very straightforward. Cool. Before our coffee break comes to end today, is there anything that you [00:20:00] wanna share with our business that we haven't covered yet? It is a very testing time for D two C brands.

Isn't it like tariffs and like I think of, we are seeing a lot of our customers figure out how they can ship some of them. Were using the D mini threshold. So there's a lot going on in the D two C uh space right now. And if your operational [00:20:20] complexity is something that's bothering you, just shoot me a note.

I'm happy to just jump on a call with you. Uh, planning on getting an ERP or otherwise. Happy to share and help you have founders solve problems in whatever way I can. So always happy to help. That's definitely a very good offer. I think founders should help each other [00:20:40] specifically if someone has, is so much ahead when it comes to scaling and has the experience of other brands, and I hope a lot of people will reach out to you.

Where can people go and find out more about you guys? Our websites fulfill.io, F-U-L-F-I l.io. We are also on Twitter and I'm reachable on Twitter too. It's uh, or X as it's called now. It's Sharun Thomas, [00:21:00] S-H-A-R-O-O-N, Thomas. So ping me on Twitter, dm me on Twitter. Uh, happy to chat. Thank you ee for your time today.

Um, I think that was a good look into the really scaling process and having the right systems and processes in place and I hope a lot of people will reach out and get in touch with you. Thanks so much for your time today. I enjoyed chat. [00:21:20] Thank you for having me. I.