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Dave Bayless: Tell me what Jazva is about.
Ryan Elich: We’re an all-in-one solution for e-commerce sellers. So we handle everything from purchasing and receiving to product listings down to order management and fulfillment. So we’re trying to really be this hybrid ERP for e-commerce sellers.
Dave: Given that set of functionality, what particular problems does your platform solve and for what kinds of e-commerce sellers, in particular, do you serve?
Ryan: Jazva addresses the needs of most e-commerce sellers. So typically we aid customers in transitioning their traditional B2B wholesale business into a modern e-com world. We’re also very effective in addressing most B2C-type client needs by automating most of the multi-channel processes that are currently done manually whether listing or updating inventory or whatever these other nuances may be.
Dave: So with all the growth in e-commerce these days, there are lots of different companies that do at least some element of what I understand Jazva does. What really distinguishes your approach from the rest of the market?
Ryan: It’s details—kind of like the old saying goes, “The devil is in the details.” With Jazva, we’re quite robust in our total offering. As an example, let’s say inventory management. We look at this as more than just a number or physical count. At Jazva, we look at inventory management as providing our sellers with inventory forecasting; giving them the capability of creating a purchase order and receiving; in-location management for their warehouse; printing barcode labels for their products, even down to, let’s say, a box size calculator or estimator for the sellers so they can see, “Hey, my customer bought these five different items. Well hey, we should be using this size box for the shipment.” As you can see from that example, we’re a bit more detailed than most in this space right now.
Dave: How did that philosophy emerge?
Ryan: Actually, real life, real business issues. So Jazva was built around three e-commerce stores in the early 2000s. Our founder, Levon Shahbaghyan, had built the application for himself, for his three e-com businesses. He comes from tech industry—actually out in Wall Street. That’s his origins. As he came over here to California, his wife wanted to create a toy store as well as a children’s boutique store. So with this, they started picking up sales. His thing was how do I add more automation to the software so that we don’t have the need to hire new employees and train them, etcetera, etcetera. His vision was, “How do I just make this as streamlined and as lean as possible?”
Dave: So when people come to you—when they try your platform or they sign up—typically where are they in their business trajectory? What are the kinds of pain points or symptoms do they experience?
Ryan: They may have grown out of a software and are looking for more of a complete all-in-one type solution, or they just may be a without a software and currently starting to experience, let’s say, issues with inventory management, issues with getting products out in a proper time that the marketplaces would be comfortable or okay with. What we’re trying to do is automate as much as we can for these types of customers.
Dave: So an area that is of particular interest to me, and I think to our Human Scale Business audience, is the evolution of B2B e-commerce. What do you see happening in B2B e-commerce channels, and how does Jazva facilitate B2B e-commerce?
Ryan: So I see a few different things right now. First, we’re starting to notice the distributor is slowly being phased out. The reason I say that is from our perspective, we’re starting to see many situations where a manufacturer is going direct to consumer. We’re also starting to see more and more customers who are taking their traditional wholesale business—let’s say receiving orders via phone, fax, email—and instead, they’re bringing it online. So, they’re giving their customers the ability to see products, inventory levels, and even custom-tier pricing in real time at a quick glance. The way that Jazva is helping these customers out is by providing these types of web portals. Also, we’re pushing live inventory feeds and even giving our customers the capability of filtering products amongst different tiers of customers.
Dave: I’m going to go back to, I think, the distinguishing elements of Jazva. We’ve talked a bit about a lot that goes into the warehouse management and inventory management and fulfillment aspects. What about in terms of some of the back office integration?
Ryan: Jazva does have its own accounting engine that’s built in. Of course, we build purchase orders. We can reconcile the invoices against the PO. We have some basic, journal entry crediting and debiting of accounts—pretty standard setup there. However, we do notice the market is very heavily leaning towards a couple of the major players out there. One of them being QuickBooks. So being that we did recognize that, we’ve built integrations with both QuickBooks Online as well as QuickBooks Desktop Enterprise version. So, we allow our customers the flexibility or even the comfortability of using our own financial module there, or they can continue to use their QuickBooks, and we have a very easy connect or integration there.
Dave: On the topic of integration, what are, let’s say, the most popular integrations among your user base, and what kind of changes or trends do you see?
Ryan: In terms of B2C customers—definitely the integrations, these guys to the marketplaces these guys are selling on the most from our side—definitely Amazon; Ebay and Walmart seem to be almost equal this point—we see that Walmart has picked up quite a bit of steam; and then we see Jet as a fourth player in the game there. Jazva does have the capability of integrating with all of these marketplaces, not only from a perspective of listing products to all of these marketplaces, but also in the sense that we can pull in all the orders, fulfill the orders from Jazva, and then essentially push back fulfillment information to these channels automatically.
Dave: Do you see the opportunity or have you built into your platform ways for your users to define or create their own workflow automation?
Ryan: We have quite a few tools that are built into the application to help our customers along these lines. One of them specifically, which I think is a huge impact to the business, is just a simple prioritization of bin locations. We have many customers who of, course, have their own racking set up throughout the warehouse. However, they haven’t necessarily analyzed their products in a way to understand that your heavy or fast-selling products should be placed a little bit closer to the pack station. We want to reduce the amount of walking time that the warehouse worker is actually walking and picking products.
So what we’ve done in Java, out of the box, is we optimize the pick-path for the users, so they’re never going to be zig-zagging in the warehouse. Instead, let’s say—as long as the bin locations are set up in the system—when they print out a batch of orders—let’s say they’re working on 50 to 100 orders at a time—we’re going to clearly tell these guys, “Hey, you’re going to start in aisle A and you’re going to work your way through the warehouse until you hit aisle C.” So we want to keep them as efficient and as lean at (the use of) time there as possible.
There’s also other, automations that are built in place, and we have custom business rules that can be assigned based off a customer’s needs. So if it’s just a simple if or and statement, then we can plug these guys right in and say, “Hey, if this is the scenario that we receive, then this is the action that we want to take along with this.” That as well as having a pretty darn decent, in my opinion, dashboard which shows our users any notifications and alerts from purchasing inventory or low inventory counts down to, let’s say, fulfilling orders in a timely manner. So we realized that we were processing a hundred orders a day and it’s typically to say two to three hours and now we’re realizing the same hundred orders are taking four to five hours. So these are quick little alerts that we can show and try to optimize our customer’s process.
Dave: So do you have a sense of what proportion of your customers do their own warehousing and fulfillment versus those who use third-party logistics companies?
Ryan: Yeah, I would say probably it’s a good, maybe, 65 to 70 percent of our customers have their own warehouse and are fulfilling out of their own facility. Although I will say that the trend of 3PLs, as well as drop shipping, is a pretty big trend that we’re noticing. We have quite a few different channels in which we get our customers, and we’re starting to notice from online, specifically, we’re running into quite a bit of customers that are drop shipping and using third-party logistics companies.
Dave: When you look out over the next year, for instance, what’s happening in your world that gets you the most excited?
Ryan: I think what makes me the most excited here is the direction which we’re taking the platform which is to focus more on these B2B-type customers. So we’re going to be really focusing on EDI-type integrations, so we can handle these customers who are drop shipping for big box stores like a Nordstrom or Macy’s, etcetera.
Dave: If you were sitting in front of an e-commerce seller today, what would you tell them?
Ryan: If you are a B2B guy. I would start considering how to make life easier for your customer. Maybe it’s something simple like sending inventory reports to them a few times a week to give better transparency. Maybe it’s something a little bit more complex like getting a web portal built. Either way, the idea is to make the buying experience as simple as possible for your customer. If you’re a B2C guy, I would consider branching out to as many relevant marketplaces as possible. I’m not saying throw spaghetti at the wall and see what sticks. Instead, I’m just saying if you sell home goods, you probably want to focus on marketplaces like Amazon and Walmart and Etsy, but if you’re an automotive seller, you want to consider, probably, eBay Motors, Amazon, and your own site. Getting to 100 channels isn’t necessarily the name of the game. Getting relevant views is what’s important and is going to lead to a decent success there.
That’s Trillion with a “T”
By common reckoning, B2B e-commerce lags B2C by a decade or more. However, industry analysts see a quickening of the pace of adoption of sophisticated e-commerce technologies among B2B sellers. In The B2B eCommerce Playbook for 2018, Forrester forecasts B2B e-commerce sales will reach $1.2 trillion and account for 13.1% of all B2B sales in the U.S. by 2021. A February 2015 forecast from Frost & Sullivan is even more bullish regarding the global market. It sees worldwide B2B e-commerce sales growing to $6.7 trillion by 2020, representing 27% of all B2B sales.
To put those figures in perspective, Statista anticipates B2C e-commerce sales will reach a bit over $638 billion by 2022—half that of anticipated B2B sales:
Mass Means Inertia
The relatively slow uptake of e-commerce technologies by B2B sellers isn’t because sellers aren’t paying attention. Mass—as reflected in legacy systems designed to manage complex supply chains—is unavoidably related to inertia. B2B selling exists because, historically, intermediaries such as distributors played important roles and added value. Revising or creating new marketing channels isn’t a matter of waving a magic wand and incanting, “disrupt, disrupt, disrupt.”
Old School Distribution
All distribution and marketing channels must perform several key functions in the process of getting a product to the consumer and payment back to the manufacturer:
- Marketing functions include gathering market data, segmenting customers, and generating demand.
- Logistical functions include packaging, warehousing, and transporting products.
- Transactional functions include processing sales and negotiating the risks associated with ownership, fulfillment, payment, and product performance.
Watch A Quick Introduction to the Functions of a Marketing Channel
This “old school” system was powered by a litany of documents: product catalogs, price lists, credit applications, purchase orders, packing lists, and shipping confirmations. Payments (in the U.S.) were (and are) in the form of paper checks. Information was shared by the postal service, phone, fax, and email encumbered with Word and Excel attachments. These enabling technologies were ubiquitous and easy to use. The process, however, was labor-intensive, duplicative, slow, lacked transparency, and was error-prone. In other words, the system was expensive.
Over time, larger players imposed electronic data interchange (“EDI”) based systems on its smaller trading partners. Some participants in the supply chain implemented rudimentary web portals to improve transparency and efficiency. The resulting mash-up of paper, phone, email, and EDI characterize the lion’s share of B2B selling to this day.
Unbundling and Rebundling
There’s nothing sacrosanct about the status quo. Distribution networks exist to perform a consistent set of functions. When the business environment changes, so must the distribution system. The emergence of new technologies and capabilities has coincided with an increase in the speed of business. The force of these new demands and opportunities is beginning to overcome inertia. We’re experiencing the unbundling of old functions to be replaced by new combinations.
The emerging pattern is that of web platform-enabled multi-channel distribution characterized by the following:
- The displacement of distributors
- The emergence of online, B2B marketplaces such as Amazon Business
- Direct-to-consumer sales by manufacturers via B2C marketplaces (e.g. Amazon, Jet, eBay, and Walmart.com) and proprietary e-commerce sites
- Drop-shipping relationships with retailers: online and offline, large and small
Enterprise Resource Planning for B2B E-commerce Sellers
Over the last decade, several companies have launched software-as-a-service offerings that offer an integrated set of business capabilities to multi-channel, B2C e-commerce sellers. While the needs of B2B and B2C selling have a great deal in common, B2B selling tends to be more operationally and administratively intensive. Jazva is one of the software vendors that are staking a claim to the B2B e-commerce space by offering a set of tools, processes, automation, and integrations that, taken together, offer tailored enterprise resource planning (“ERP”) functionality. As Ryan put it:
We’re an all-in-one solution for e-commerce sellers. So we handle everything from purchasing and receiving to product listings to order management and fulfillment. We’re trying to be this hybrid ERP for e-commerce sellers.
The distinction is reflected in the details:
- Although Jazva offers a shopping cart, it emphasizes its integrations with leading marketplaces such as Amazon, eBay, Walmart.com, and Jet as well as webstore and shopping cart vendors such as Shopify, WooCommerce, and Magento.
- Likewise, Jazva has a built-in financial module but has been compelled to create an integration with QuickBooks Online and QuickBooks Enterprise Desktop accounting packages.
- As Ryan explained in our podcast conversation, Jazva is proud of its inventory, fulfillment, and warehouse management functionality. While not the exclusive domain of B2B sellers, these functions are particularly critical for companies selling to relatively large retailers and marketplaces, who tend to be very demanding.
- Tellingly, Jazva is investing in EDI integrations to make it easier for B2B sellers to improve the efficiency of transactions with trading partners who utilize platforms such as CommerceHub, Walmart EDI, Wayfair, and Amazon Vendor Central. They can also develop custom EDI integrations for users.
- Of course, Jazva integrates with UPS, USPS, and FedEx for B2C and drop-shipping fulfillment.
The World in Flux
It takes a great deal of force to overcome the inertia of the massive B2B commerce sector. For years, analysts have anticipated an acceleration of the adoption of e-commerce technologies by mainstream B2B sellers. The persistent accumulation of web platform development, marketplaces, EDI interfaces and alternatives, payment systems, 3PL and fulfillment networks, integrations, and experience appear to have shifted the giant. Jazva is part of that trend. It will be fascinating to see how the next few years unfold as the adoption of new bundles of capability continues to displace the old.
For Further Reading
- Shopify Flow and Wholesale Poised to Accelerate Business
- Convictional is Automating B2B E-commerce
- Apruve Provides Credit Management as a Service
- Chad Rubin on Empowering Your Ecommerce Business with Technology
- Jazva Product Update: New EDI Integration with CommerceHub