Andy was featured on John Lawson's Hump Day Hangout! Recording and transcription below!
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Transcript:
John
Alright. Here we go. We're up to this cat. I've got on the line right now, we're going to bring him on in just a half a second, Andy. He is the CEO of SkuVault, Inc. It's a Louisville based eCommerce platform, WMS. He's going to explain that, but it's Warehouse Management System, but you know, he just wanted to be cute I guess on his intro there.
Andy
WMS!
John
He's going to talk to us about a new product called SkuVault that these guys are doing, and it's pretty cool. I definitely think this is something you're going to like, but let me bring him on and see if we can talk. Andy, are you there?
Andy
I am here, and it's actually Louisville.
John
Louisville.
Andy
Yeah, I had to correct you there.
John
It's Louisville.
Andy
Yeah, Louisville.
John
Oh, okay.
Andy
Yeah.
John
I know a guy named Louille.
Andy
You got to make it to the derby sometime.
John
Okay. You got tickets? It ain't like they're free. Big CEO man. I'll come. Heck yeah! Let's just start from the beginning. I've known you ... We were just talking before the show. I've know you for 6-7 years now, and it just really kind of donned on me that when I met you, you were actually a young teenager at the time. How old were you in what, 2006?
Andy
About 18.
John
About 18 years old. I remember you and your buddy, Matt, at the ... We were at ... It was ChannelAdvisor’s Catalyst Conference. It wasn't even, I don't remember what it was called. It was Marathon back then. It wasn't even called Catalyst.
Andy
Yeah.
John
I remember I was talking to my partner. I'm like, who are these two young cats? They must be here with somebody else. Tell me really how you got into eCommerce.
Andy
Okay. I'll give you the quick dog-and-pony show. Basically Matt and I ... Do you remember those "We sell your stuff on eBay" stores?
John
Yeah. Yeah. Okay.
Andy
We didn't have a store, but I guess, in middle school really, we started selling stuff for our friends' parents on eBay. We'd go to their garage or attic and go through and say, "Oh we think this will sell well." Turns out it was hard to find enough product to really do much that way, so we started doing yard sales. We were up at 8 a.m. on Saturdays going and arguing about pennies with old ladies, so that was good. Still hard to find enough product. We actually found a Champs outlet store in Cleveland, Ohio, and we would drive up there as soon as we got our licenses, fill up a couple cars, drive back to Louisville, and then sell it all on eBay.
A little bit after that was going on, eventually we got the managers to where they would ship us all kinds of product. We didn't even have to drive out there anymore. Then we actually had an article in Business First, which is Louisville's local business newspaper and got contacted by a guy who had just retired from the shoe business in New York for 40 years. He really just called us, came in, checked it out and became a mentor. Still a mentor to this day. He taught us to do vendor relationship management, how to get new accounts and things like that. He really helped move the business to the next level.
That's sort of how that got started, and that became Street Moda, which some of you might know today. It's still around and going strong and growing. Then I went to college. I got out of that. I went for industrial engineering at Louisville and got into manufacturing. After college I was doing custom development and consulting for manufacturing companies, specifically focused on inventory, forecasting and reordering. At some point, Matt called me back in for Street Moda to do an inventory system. Really we were just looking around trying to find one. Didn't really find one we liked. We said we were going to build one. He sort of laughed in our faces. When I say we, I'm talking about my now-partner, Slava, who has been working on the version we showed off at ChannelAdvisor’s Catalyst this year.
We decided to build that, and we did, we launched it. It wasn’t web-based. It was specific for shoes and apparel. Just really meant for one person. We had interest from another company out in California, so we gave them the system. They were shoes and apparel as well. Then there was still more interest, and we decided that if we're going to keep selling this, we need to take a step back, make it scalable, and also make it where it works for any product type or industry. We thought it was going to be a year. It ended up being about two years, but we finally released that and we've been selling that to people in various industries since then. That's the story.
John
Wow! Okay, so ... Wow! That was pretty detailed. We don't have anything else to talk about. Fantastic! Thank you so much. Let me ... [laughs] Okay, so ... Good. You gave me this from here to here, but that first part I want to kind of focus in on a little bit. You guys, because I've never really heard this story before, you guys actually started by doing the flea market/garage sale route?
Andy
Yep.
John
Get out! Then you just ... and then ... and then, so … The scale really came ... Okay, "Hey, we found this place up in Cleveland." Now, how far of a drive is that for you guys?
Andy
Oh, I think 6 hours.
John
About 6-7 hours?
Andy
Yeah.
John
Because, I mean, you're right next to Cincinnati. You're right next to Ohio.
Andy
Yeah.
John
Then you would go up there. About how often did you end up having to make that trip?
Andy
At first, we were going about every two weeks, I think.
John
Wow! Wow! What, multiple cars? Did you have a van, a truck?
Andy
We rented vans a few times. We did the multiple car thing. Oh yeah.
John
I think that is so important because you understand the hustle first of what it takes or what it took. This is pre-Amazon days and I mean at that time, I remember in '96, '95, if I would tell anybody that I was selling online or selling on eBay, immediately they would kick me out of their store. We were kind of ... Did you ever tell those guys what you were doing?
Andy
We did eventually, but you know we'd send them gifts, we did the whole relationship thing with them, got their personal cell phones, let them know when we were coming, made sure it was a good time, they didn't have corporate in, things like that. It's really in the outlet stores, and still is to this day talking to some of my current clients, it's sort of a gray area. The managers of these stores, they have their bosses say, "Hey, you've got to hit these sales marks. You've got to hit these sales marks," but they're also saying, "Hey, don't sell to these people selling online." Well, I'm the store manager, I'm like okay, I'm a little short on my sales goal. I've got this guy who I know will buy a ton of stuff, but I'm also not supposed to sell to him. What do I do? Well, that's the gray area.
John
That's the gray area. I think you make a good point. Ultimately, it was the relationship building that helped to break that kind of glass wall down or glass ceiling down for you guys?
Andy
Exactly, and we still try to really incorporate that with SkuVault now too. Jerry Mud was the mentor I was bringing up earlier, and that was one of the biggest things he's always tried to drill into our heads is it's all about shaking hands. Nothing against these webinars or hang outs or anything, but there's nothing that can really replace when I see you in person and shake your hand.
John
Yeah, absolutely. I think that's a very good point is that, LinkedIn and Facebook and all of these things are great for relationship building and starting, but there is nothing like breaking bread. There's nothing. If I sit down and have a meal with you, because I like to eat, but if I sit down and have a meal with you, there is no doubt that we are going to have a tighter bond than we do on something even as intimate as these things are. It's just actually making that connection physically that really helps.
Andy
Where a lot of tech and software companies sort of fail, you know they want to just do webinars every week and off-site launches, which is fine for a lot of people, but you know we offer on-site launches. A surprising amount of people take us up on that. It does cost extra, but they want to get up and running smoothly. I understand switching your warehouse and how it works is a big thing for a company. You've got to keep getting those orders out, and just redoing all your processes, it can be a big project. To have someone who can sort of help walk you through that ...
John
Oh my God. Big project? It's a big pain in the ass. I mean we've had to move our entire warehouse twice now, and the thing, like you said, is you can't take a day off to do that. If you want to give away all your money, you could take a week off, sure, and the sales will stop and all that kind of stuff while you get it together. Let's get into the tool. You were called in. Matt asked you to ... he was the CEO of Street Moda, and they're doing huge volume. Give me an idea of how large of a solution were you looking at? About how many SKUs or something that you were looking at at the time.
Andy
I think at that time they had around 60,000 SKUs.
John
Okay. We want to set the pace here, so about 60,000 SKUs. You ended up building this solution in-house, a solution for that specific company.
Andy
Right.
John
Ah.
Andy
Street Moda, from the early days when I was still around, was using ShipWorks for their shipping platform and then ChannelAdvisor for channel management. I had actually been around for the implementation of those years before this happened, and they're both great systems. What we decided to do was build this Warehouse Management System to work with those. We really ... just sort of fell into that because that's what we knew, but we also knew they were great companies, so when we built SkuVault those were our two key partnerships we really focused in on for our group.
John
Okay. You built this, then you took your step back like you said, and you're like, "Hey, this is something that a lot of other people can use." Now, what is it that, okay you've got the ChannelAdvisor, you've got the ShipWorks or ShipStation or all these kind of things, where does SkuVault come in? What actually - Warehouse Management System, right?
Andy
Right.
John
Tell us exactly what that means.
Andy
Okay. The main point, traditionally, of any warehouse management system, specifically manufacturing and retail, is that you have a central hub in which to house all of your inventory data. At any point in time I might be using different systems here or there, whatever, channel management, whatever, but I need one central place to know anything that happens in my warehouse will be reflected in this system and this is where I can actually go to see what's going on out there. What I have on-hand, who's doing what, how many people are out there working right now, things like that. The central hub is the main thing.
Traditionally, it was in-house in the company, you know? I'm a manufacturing company, my sales department and all my different departments need to be able to see this, but no one on the outside does. Well, eCommerce sort of changed all of that. How ever many items you have out in your warehouse, that number needs to be reflected on all your different marketplaces if you're selling internationally. Theoretically, someone in China might need to know how many of that size shoe are in your warehouse right now. It really moved from being an in-house system to a global system with eCommerce.
John
Are you using ... Let me ask you this. Is this a desktop solution, or is it a cloud solution?
Andy
It's cloud-based, so we use Microsoft Cloud. You can access it anywhere in the world. It's responsive, so you can use it on your, I think ... You're an Apple guy, right?
John
Yeah, that's right. Are there other guys?
Andy
Yeah, there are. There are. Yeah, you can use it on your Apple, your Android, your Windows phone. You can use it on any tablet, iPad. Of course any laptop or desktop computer. You're just logging on online and getting on there wherever you are. We also use Google Cloud printing, so you're heading to the office, you're the warehouse manager stuck in a traffic jam. You can get on your phone and print your pick list, and it will print to the printer in your warehouse and your people can start picking.
John
Now that's pretty cool. I like that kind of thing, you know. The more I can use these mobile devices, the happier I am. That's kind of cool.
Andy
The funny thing is if I'm out picking, depending on your product of course, but a medium size product I prefer a cart with a laptop. Normally you're scanning things and with your barcodes you don't have to touch the keyboard, but say the barcode fell off and you need to search for the product. I like an actual keyboard to type on as opposed to the tablets or phones, but that's just my personal opinion.
John
Yeah. Definitely. Definitely. Guys, look. If you don't have barcodes on your product, then this probably is not yet your thing. The first thing you need to do is get barcodes. You're just ... You don't have that many products yet. Anyway, go ahead.
Andy
What we did do, how we set it up, there's a few ways you can do that. A lot of systems require you to rebarcode every single item. Now if you need to do something like FIFO or keeping track of WOD numbers, then you do have to barcode every item because you may have the same item coming in on different PO's and you need to track that. For most people they don't need that. We have it to where you can actually generate your own barcode if it doesn't have one in SkuVault, or if you have a manufacturer UPC, you can use that. Most product types have manufacturer codes on them, so you can just use those.
John
Alright. Let's just, for those who don't know, FIFO is ...
Andy
First in, first out.
John
First in, first out. If you're selling milk, you know, first in, first out. For a lot of things that have shelf life, cosmetics and things like that, you definitely want to have first in, first out kind of information. Fantastic! Now let me just ask you, solution-wise, I mean, good customer size. What is a good customer for you? Where are they ... Who are you looking for, and where would this solution really help?
Andy
We have a couple more enterprise-sized clients, but that is not our focus. Our focus is the mid-tier eCommerce retailer. We also recently implemented a start-up pricing plan. It was actually modeled off Microsoft because for young tech start-up companies they have a plan where you get free licenses for Office and things like that, which really helped us out a lot when we were starting out. We wanted to model that and we released our start-up pricing plan, one to two users, $150 a month. We think that's affordable for most everyone. We really thought there’s no reason why we should continue to price out the smaller guys that are trying to grow, so we sort of want to be there to help them grow to where they do get into that next category.
John
Fantastic. Fantastic. You are actually coming and are a sponsor of ICE Retailer, so you will be in Atlanta.
Andy
Yes, we will, so come see us there. We'll probably have this banner behind me at the conference.
John
Look. I let you pitch, right? Now everybody knows about SkuVault. Now I'm going to get a little bit deeper with you real quick for these last couple of questions, alright?
Andy
Yeah.
John
Here's the deal, man. Tell me why I should listen to you. Why should I listen to you? Why you? Why should I believe you? Why?
Andy
One thing we try to do differently from most software companies, we think, is that we've been there and done it. I've done all the warehouse jobs, I've been out there picking, I've been out there shipping, I've sat there for hours and worked on negotiating rates to put into my ShipWorks tables or whatever I'm using. I've listed straight on eBay, Amazon, Sears, but then I've also worked on doing an implementation of ChannelAdvisor and listing into multi-channel markets and all that fun stuff. I have set up UK accounts for eBay and Amazon, and Canada. The marketplace expansion is always a fun one. Actually I hate it, don't let me lie.
We still try to keep that, so I still go out in the warehouse and work with people. In Louisville we have two clients on the system, one of them being Street Moda. We're right down the street from them at our offices. Our developers will go over there and actually work with people when we ... We do all our beta releases in those first two versions, which are still in use of the company. We release something to them. We let them use it for a few days. Then we go over there, use it with them, take their advice, do some refining on it, and then after it's 100% there, and the beta is there, we build it into SkuVault in the web-based version. We actually have our developers and everyone in the company go and actually work in the warehouse, even if it's 100 degrees in the warehouse.
I think that's something we do differently. Our other main focus is keeping things simple. Some systems you log in, and if I see 500 buttons on one page, I don't know where to start. Especially the warehouse pages that people are using out in the warehouse, we try to keep it down to four or five fields and a couple buttons on each page. You go there, you don't need to be trained on it. If you can read English, it's right there, and if you can't we can train you in 5-10 minutes on how to do a pick, and you go around and start scanning.
John
Who do you guys integrate with?
Andy
We integrate with ChannelAdvisor and ShipWorks in what we call Combo #1, so when we run across someone running those two, that's easy for us and easy for them, because that's what we really built SkuVault for. We also integrate with ShipStation, and Teapplix. We just rolled out our Shopify integration, so some people that may not be on ChannelAdvisor because they're not that size yet but are using their own website as well as the marketplaces, we can cater to that. We've done a Brand Retailers integration. We have some partners that aren't actually integrations. We're working on Ortery - I don't know if you know the photo boxes. That's something we haven't released yet, but we're working on that. A lot of the common platforms used in the industry we try to cater to.
John
Alright, cool. Last question. Just give me a timeline. How long does it really take to kind of implement a system like that? Let's say I'm at 10,000 SKUs, 5,000. I mean not huge, huge. How long would that take about?
Andy
Right. It really depends on data feed. If you have a reliable data feed, we can take it, reformat it, upload it. We're talking two or three days with training off-site. One night we'll upload all your products. Next day we train you on everything. That night we upload quantities, and the next day when you come in, as soon as you start picking orders, you're picking with SkuVault.
We've also done people who didn't have anything. If you have to go through your warehouse one by one and put everything in the system, that's a different story. I know we've done people where they had different SKUs on Amazon than they had on eBay. Well, there's no way I can do that.
John
Ah. God.
Andy
That's just a matter of how quick you can run through all your products and do it. Most people have some kind of data feed we can take, get the products created in SkuVault and go from there.
John
If I have the data feed you can do it in how much time, because you kind of missed out on your number?
Andy
Two to three days.
John
Two to three days, okay. Yeah, actually when you were talking it kind of ...
Andy
Oh, okay.
John
That's why I want to make a ... Two to three days, you could be up and running if you've got the feed all ready, which most of us do. Perfect. Perfect. Anything else that I meant to cover and didn't that you really want to make sure we get out there?
Andy
Just this: even if you're not doing it with SkuVault, I urge everyone to make sure you're organized with your inventory for peak season. As you all know, out of stocks have lots of costs that are visible and hidden, so we want to make sure you keep those rankings up during the holiday season so you keep your search visibility up as high as you can. Whatever you do, just try and make sure you keep it organized so you can ship everything out as fast as you need to to get all your orders out every day to keep those DSR's up. Also make sure you don't have those out of stocks.
John
You did pretty good for my first interview. That was cool. Thank you so much.
Andy
Yeah. Thanks for having us on. We appreciate it.
John
Alright, bro. Take care.
Andy
See you at ICE Retailer, and hope to see everyone else there too.
John
Peace.
Andy
Alright. Later.
John
See, there you go, guys. Just like he said, it's about meeting people, hanging out with people. It's all about relationships. Definitely when I saw that 18 year old kid sitting there, if I would have just said, "Eehhh! What do those kids know?" You know how you are. You old people, you know how you are. The thing is, is what we're into is so ... I mean technology in our space is moving so quickly and things are happening that help us to get to where we are worldwide, global, doing crazy, crazy amount of sales and you got young people out there that are really, really making things happen. You definitely want to listen to them. You want to see what they're into. You want to see if they're developing.
I've been hearing so many different things in the past year, about different ways for technology to come in and really help us with our businesses. It's all about scaling. It's all about growing. One of the best ways to scale is using technology. It's great when you have a bunch of people. I mean look, I was talking to somebody the other day and they were talking about how great ... or newspapers, we were talking about newspapers and the business of newspapers and how it's going out of business. One of the things I told them is we talk about the old days as if we were not kind of in a usery mode. The newspapers were built on the backs of children. We had, literally, slave children running around on bicycles throwing papers out for a nickel a piece.
If I could have that many children working my damn warehouse, I wouldn't need any technology. I would just have a bunch of kids pulling my shit. "Lift that. Lift this. Get up at 5 a.m. and do it before you go to school." That's how we used to deliver papers and guess what, we thought it was cool. That was okay to employ children for, I don't know how low of a wage that was, but literally all I could buy with that money was comic books at the end of the week. I mean it was straight up slave labor. Slave wages, not slave labor, slave wages. Seriously, if you want to be able to expand your business and grow things, this is the way to do it. Check out new technology.
