Why Manufacturers Must Establish An Ecommerce Sales Channel

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Today, Rohan Thambrahalli of UpstartWorks (formerly the Upstart Group) in Chicago joins us to talk ecommerce!

Danny:

Okay, let’s jump in today’s episode. I have the Founder and President of The Upstart Group [now renamed UpstartWorks] based in Chicago, this is Rohan Thambrahalli. Thank you so much for joining me today, Rohan.

Rohan:

Hey, thanks for having me, I appreciate it.

Danny:

This is great, so for those who aren’t familiar with The Upstart Group. And I want to be very specific, there’s a few Upstart Groups, you guys are based in Chicago.

That’s right.

Danny:

Tell me, tell our audience who you guys are and what you guys do.

Rohan:

We’re a technology company, focused on working specifically with commercial industrial brands. Helping them, really harness the power of E-commerce. And many different E-commerce marketplaces and E-commerce platforms.

Danny:

Great. So E-commerce is a little topic. It’s a little hot right now. But before we kind of jump into all that stuff, tell me a little bit about your background, how did you get started into this space? What’s your background?

Rohan:

Look my background is traditional industrial sales. I grew up in the B2B industrial sales distribution space. Focused on selling industrial commercial products to large enterprise customers. Really five, seven years ago as I was in front of customers talking about a product I continuously found that the customers were listening to me, talking about whether it’s a commercial lighting product or whether it’s power tools, pneumatic tools, they really wanted social proof, right? They really wanted to see what other people were saying about this product. And they turn to the web and specifically, they turn to Amazon to see what people are saying about this product and how they were using it, different application.

And that really was kind of the genesis of the business. For me, it was kind of a light bulb went off and said, “Wow, this customer who was buying product for a large enterprise is still turning to a platform that historically was really just meant for individual consumers to buy a cell phone case or an iPhone charger.” And that really was the genesis of the company.

Danny:

That’s awesome. So that’s an interesting thing that you were talking about. You said you found your customers, they wanted that social proof, they want to get reviews. We want to be able to see how this product performs and whatnot and I think, and correct me if I’m wrong, but I feel that because of, we’ll call it the Amazon effect or what have you. Because we have been predisposed as consumers to buy a certain way. The way that you and I buy now, likely, right? When we’re looking for a product, we’re looking for a new iPhone case, okay? We’re going to go look online, nine times out of 10, we’re probably going to land on Amazon somewhere. And then we’re going to start diving into the reviews and we’re going to start looking at features or maybe look at some videos, we’re going to do all that stuff, right?

So I think there’s a gap between buying that product from a consumer standpoint and then when we get to B2B products, that it’s like, wait a minute, that doesn’t exist. Or what may have started to now, but there’s an expectation to say, well I bought my iPhone case like this, but I want to buy my stainless tanks or I want to buy my safety product or I want to buy whatever inside the, do you guys feel that what your customers were saying?

Rohan:

Yeah, absolutely. Look the demographic of the industrial buyer has changed significantly, right? If you look at Amazon, almost 70% of all product search begins on Amazon. I think there was an interview of Google’s CEO and they asked him, who’s your biggest competitor in search. And they said Amazon. They didn’t say Bing, they didn’t say Yahoo. He said Amazon’s our biggest competitor because Amazon is the largest product search engine. So now what’s happening is that B2B customer, when she’s at home shopping for her supplies on Amazon, she’s expecting the same level of customer experience when she’s buying for a large plant or a large facility or a hospital. So to your point; however, there’s a big gap between the data and the customer experience industrial brands currently have versus how their customers are shopping for their products.

Danny:

Yeah, 100%. So what are, obviously you guys help companies be able to mitigate that gap and be able to close that. What are some of the signs or some of those pain points where some of these manufacturers are saying, “Okay yeah, we need to start looking.” What are those triggers, if you will, where they start saying, okay we knew it was a problem before but now this happened, or these series of events are happening and now we want to start making action. What does that look like?

Rohan:

I think generally speaking when we look at it, in going into 2020 there’s a lot of research done that says as high as 75% of B2B buyers are wanting to transact online, okay? However, a very small portion of them are doing it because first, product availability. There’s a lot of industrial product that’s just not available online. So the customer is forced to go buy through traditional distribution channel.

Secondly, and this is a big one: if the product is available online, the product details is not sufficient, there isn’t good content. The reviews are not necessarily well managed. The customer Q&As are not necessarily well responded to. So it doesn’t give the customer confidence that okay, if I’m going to go buy a $1600 circuit tracer online, do I have the confidence that this is truly being sold by the brand owner, the manufacturer, right? Because there’s so many third party sellers out there that are selling products. Oftentimes you have customers buying the product from some third party sellers and then when it’s not working or it’s not what they expected, sending the product back to the manufacturer saying, “Hey this is your branded product. It’s not what I ordered, it’s not working.” So that’s one thing that’s happening, one of, but it’s a big challenges.

Secondly, I think mobile is also being a big driver in terms of, I’m going to use the word forcing some traditional commercial industrial brands to look at E-commerce because 40% of E-commerce transactions are on mobile now. And on mobile, it’s so much more easier to get the social proof even when compared to just desktop because you can just switch over to YouTube and look at a YouTube video on how to use a specific product that might be traditionally complicated. So access of information that’s being created put out there from other users who are using this product, is a big big driver of why a lot of the traditional brands are really looking to sort of get footprints on E-commerce and mobile. And if they are not, they should start like really quickly.

Danny:

Yeah, I agree with you 100%. So maybe for those companies that are saying, they’re realizing that and they say, “Hey, we need to start really quickly.” What are some things maybe you ought to prepare for that, what of they need to have or not have? How do you make that transition? I just asked you a lot of questions so, how do you that, what are those first steps saying, “Okay gosh, I think we need to figure this out”?

Rohan:

And you know what, that’s a great question. I think, our recommendation always is don’t try to boil the whole ocean, right? Start small, right? Start small. Because it is a lot of work. Content is a big driver. So not just your very traditional product related, technical product related data, but also having the intelligence around, okay well how are people searching for our products? Searches are different on desktop versus mobile. So making sure that we’re incorporating all of that search intelligence into product bullet points, descriptions. Having multiple product images. One or two product images just don’t cut it now. Having at least five product images, application images if possible. Videos, even better.

So content is a big piece of it. And then I think really figuring out what is the right platform, right? I think that also drives a lot of, that there’s a lot of discoverability. So a great example of this, you know we launched a brand that is based in the safety PPE space. They make work boots. So if you’re working in a large manufacturing facility or you’re working at a food processing facility, you wear these boots. For the longest time, these products were traditionally just procured from MRO distributors. But we launched this brand about 90 days ago on Amazon and they’ve seen significant sales increase 30 days after we’d launched them. So that again tells us that these very traditional B2B buyers are relatively, quickly migrating to E-commerce platforms. And having the products where your customers are shopping for your products is critically important.

Danny:

Yeah that makes a lot of sense. One of the challenges that I’ve heard and I’m just curious about, if you’ve got manufacturers traditionally going through 100% distribution or some dealer, but yet now we’re going through Amazon. From I guess maybe a fulfillment standpoint, how have manufacturers been able to sort adjust to that? If particularly, if there 100% going through distribution and it’s just like, we’re just sending truck loads of stuff to our distributors versus now, we’re sending one thing or two things. Much smaller shipments, does that make sense?

Rohan:

Yeah and again that is a good point. These manufacturers traditionally make the product, put them on pallets, and just ship them out and let somebody else worry about the broad based distribution. With E-commerce there’s obviously two ways to do this. You can have a relationship with the Home Depot or Walmart or Amazon where you ship product directly to their fulfillment centers and then they do the broad based distribution on their own. Or you can always choose to do drop ship where you’re shipping product directly to end users. But in our experience, there’s several mainly non CPG brands out there they just don’t have drop ship capabilities. So that does become a battle for several brands.

Danny:

So if I understand correctly, so most manufacturers who are doing this, are they going through like an Amazon type fulfillment? Or are they fulfilling on their own? I wasn’t sure I understood that.

Rohan:

Most of them are leveraging the distributors, in this case the E-commerce platform built-in lens capabilities.

Danny:

Okay, yeah I was very curious about that. Because I know that’s definitely, again it’s not a one size fit all. Everyone has their own, their different challenges and what might work for one company as another might not work for another one. I know that’s something that comes up quite a bit. One question, and you mentioned about, we were talking about a little bit earlier, is maybe from an E-com standpoint, maybe they aren’t necessarily have the capability to be able to buy through the website. But even just changing that customer experience of saying, he we’ve got a printed magazine or catalog that we send out, but now it’s we’re going to make sure that is all online. And you mentioned about having, making sure that you have a lot of great content. What specifically do you recommend that for each product category or each product, what’s best practice from a content perspective for them to have?

Rohan:

We spend a lot of time and again, really understanding on how customers are searching for products. We’re geekish when it comes to customer search, we’re passionate about it. We spend a lot of time in sort of product titles and descriptions. When it comes to product search, that is the highest index, right? So we want to make sure that product titles and descriptions incorporate again without changing the integrity of the product, incorporates all the different ways customers are searching for your product. Then we get down to bullet points.

Again bullet points, we don’t necessarily recommend them to be very technical. We recommend them to be more solution-oriented. So instead of saying “Our degreaser has this chemical.” We would say, “Degreaser for a bearing or a compressor” or what have you. It’s really more solution driven. On the imaging standpoint, obviously we always recommend high resolution here image that’s kind of the primary product image. Followed by angled shots. Again depends on what the product is. You might have two angles or four angles. Special callout features so if there’s a specific feature on your product, you want to call that out.

360 imaging. Again, very important if a product is a very technical tool. Like a precision measuring tool, right? The customer might want to zoom in, rotate it so 360 imaging is very impactful. And then of course a short video describing the product– better if it’s application driven as well. And then in most platforms as you scroll down to the bottom of the page, there’s real estate that you can really get deeper into product features and benefits and even applications. So these are just the basic components that we always recommend to our clients.

Danny:

Great. That’s good to know. Especially, I think you mentioned specific on the imagery and making sure that there are five images and the whole 360 piece. Video obviously is a big game changer. And then specifically with the application specific content I think makes a lot of sense. Obviously relevant to the product depending on what that is. But yeah, that makes a lot of sense.

Rohan:

And what’s interesting to me is that because I do come from that the belly to belly, industrial sales piece. One thing that’s remained constant from that time to today is customer relevancy. And it’s taken different forms, different forms of delivery. But at the end of the day, anything we put out there, whether we’re doing an in-person sales pitch or it’s an E-commerce platform or mobile, the more relevant we can be to the customer, they’re more likely, you are able to deliver really great customer experience.

Danny:

Yeah exactly.

Rohan:

I think the big piece really is customer confidence, right? So it’s a bit counterintuitive because you’ve got several brands that say, “Hey, you know what? We don’t want to deal with E-commerce.” But I tell them that, “Your products are already out there,” you know? It’s just that some random person is selling those products. And if I were the brand owner, I would want to control my product integrity, my price, my product content, and my brand! Those are the big things that I would want to control. So for me to be able to do that effectively, I have to directly engage with these platforms and not let some random person dictate those four big things that really matter.

Danny:

Have you found that sometimes there’s a little bit of a fear from a dealer to distributor standpoint? Again, depending on the company they approach, that there is irrelevancy for a distributor. If you’re rolling out an E-commerce model. I guess what I’m asking is, what are ways that you guys have seen that this has really added a huge benefit? Versus, you’re adding another channel, yes they could go directly to the consumer or to the end user rather. Versus maybe the prior model.

Rohan:

The number one pushback we get is, “We have big business in the traditional channels.”. And what we tell them always is that don’t be channel obsessed, be customer obsessed. Because your customer obsession should make you want to provide your products on E-commerce platforms. Not saying the traditional channels are not important, they are. But we want you guys, we want them to be where the customers are and the customer will at the end of the day, decide to buy the product from where they get the most value.

Danny:

Exactly. No, I love it. That’s a huge initiative and a big piece. It’s more than the customer experience piece. It’s that I love the customer being customer obsessed. That’s the game changer. That’s where you’ve got to go.

Rohan:

Yeah and the way we really look at that is it comes in many different forms, so I have that customer obsession. And there’s so many different ways we can do that on an E-commerce or mobile platform is because we want to be able to tell the brand’s story directly to the person that’s turning that wrench all day long, right? And I think in some cases, the ability to tell that story in the traditional channel, it’s somewhat reserved for just a tier one brand. Well we’re the underdogs, we want to tell the tier two brand, tier three brand’s story to again to the actual users that are using the product, making a living using the product everyday.

Danny:

Yeah, absolutely. That makes a lot of sense to me. So as we’re kind of wrapping up, what else, what recommendations do you give to companies as we kind of move in to 2020. Think about that company that’s kind of on the edge thinking okay yeah we might need to move, we’re kind of on the fence going into this direction, what would you tell them?

Rohan:

Well I would tell them that, think about your customer. Stay customer obsessed, your customers are searching for your products on E-commerce platforms. Secondly, your products are already out there, right? Some random third party seller is selling your product. They’re controlling your brand, your product integrity, your pricing strategy, and more importantly customer experience on your behalf. So as a brand, we strongly feel that the brand should be controlling that not somebody else. And lastly, I would say that, allow your customer the experience that they deserve. When they’re at home buying something for themselves, the experience shouldn’t be any different when they’re at work buying one of your products.

Danny:

Bingo, that’s it. That’s awesome. Rohan, I really appreciate the time. I know your time is very limited, thank you for spending it with us on IndustrialSage. If anyone would love to learn more about you, what’s the best way to learn more about you?

Rohan:

Thanks for having me on, I really appreciate the opportunity. We’re definitely passionate about this space. To learn more about us, you can go to www.upstartusa.com. Our headquarters is in Chicago, Illinois. I would love to have a chat with anybody.

Danny:

Awesome. Well Rohan I really appreciate it and stay warm, stay warm up there in Chicago.

Rohan:

Yeah thanks a lot, I appreciate it.

Danny:

All right, thanks. Okay so another really great episode here. So a couple of key takeaways that I had. And I’ve been hearing this term, well we’ve all been hearing it for a little bit. And obviously it’s more than, it’s elevating the next game of that customer experience, it’s being customer obsessed. And it’s really understanding what those challenges are and what their customers are going through. How can we facilitate an easier sale? How can we make things better and easier and faster for our customers? And E-com is a really great way of being able to do that. Why?

Rohan talked about, I think he said that, he’s talked about how Google was saying that Amazon is actually their biggest competitor. It’s not Bing, it’s not Yahoo, Amazon. And people are going, doing their product research there. And that is happening whether it’s B2C or B2B. So there’s a lot to learn here. There’s a lot to, if you’re not going down this road, start thinking about it. Say hey, look at our customers and if this is how they want to buy, then there’s a way that we can do this, start thinking about that.

And I also love how Rohan was talking about some best practices around how to really communicate the value prop for your products and making sure that you have all the right images and the search titles and the descriptions. Maybe adding some video, 360 content. And being really application specific. Versus just kind of general. So some really great insights here, hopefully you have one or two takeaways. And I have a laundry list of things that I took away from this.

Listen, if you have any question you’d like us to answer from the show, we’d be happy to do that. You can reach out to us at IndustrialSage.com/questions. We’d love to answer them for you. Listen I really appreciate you listening or watching. Maybe you’re on iTunes or you’re on Spotify. Or maybe you’re watching on the website. Thank you for doing that. We love a review or social comment. And that’s it, that’s all I’ve got for you today. Thanks so much for watching. I’ll be back next week with another episode of IndustrialSage.

 

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