11 Dec Episode 9: TruPar Interview
In this podcast, Justin King interviews a good friend and millennial owner of a B2B distributor, Sean McDonnell from TruPar.
Justin and Sean discuss how their relationship grew, Sean’s background before launching TruPar, the path that led him to launching the company, and lessons learned along the way.
The delve into legacy companies and the challenges they can face when creating a digital component; the importance of giving a digital offshoot its own power and autonomy; moving from a B2C to a B2B platform; utilizing vendors and tech solutions to minimize staffing; and how you must always, always, center your decisions and processes around the customer and the customer’s perspective.
- TruPar is a truly disruptive eCommerce business, serving a niche industry, and selling replacement parts for industrial equipment.
- Sometimes TruPar is the only Google search result for certain parts.
- Sean began working on TruPar in 2012, and in September 2014, launched it as his primary business.
- By the end of 2016, TruPar had 7.8 million parts for 600 brands, over 40,000 B2B clients, and could ship to 90% of the U.S. for a one-day flat rate.
- Sean achieved rapid growth through an entrepreneurial mindset, operating autonomously, centering the customer throughout everything TruPar does, and optimizing and testing throughout each stage of scaling the business.
TruPar is a success story from which traditional distributors can learn a variety of lessons. Companies like TruPar and disruptors like Sean are inevitably carving out space for themselves in industrial distribution markets, and legacy and traditional distributors would be wise to establish their own digital components. To do so, distributors almost need to separate their digital branch into its own company, and provide their digital branch with plenty of autonomy to make decisions quickly.
Hey this is Justin King, welcome to this episode. I’m very excited about this, as I get to interview my good friend and millennial owner of a B2B industrial distributor, Sean McDonnell, from TruPar.
Now listen, the beginning audio is a little bit wonky, but we clear it up within just a few minutes, so stick with it. I hope you enjoy it.
Justin: So, this is a pretty exciting webcast for me. I think everybody is going to get a lot out of this. I’m really excited to have this conversation. I’m going to introduce you here in just a second, this is Sean McDonnell. Sean I met probably – what was it, three years ago now, Sean? So Sean – I think Sean reached out to me through eCommerceandB2B.com, which is one of our websites. Sean just reached out and said, “Hey, I want to meet, and just chat,” and we scheduled a call . . .
Sean: I think it actually went out the other way, but yes . . .
Justin: I didn’t schedule a call with you?
Sean: Yeah, yeah! So I just wanted to download one of your things – one of your whitepapers – and then next thing you know, I get a personalized email on a Sunday afternoon . . .
Justin: You’re right! You’re right!
Sean: And I was like OK, so this isn’t the typical sales campaign. This is actually a human being writing me an email on a Sunday afternoon saying “let’s meet.” I typically won’t do this, but I gave it a shot. Then leading up to the meeting I had some anticipation. You – do you remember what you I told you when we first got on the call?
Justin: No, I remember a lot of the content of the call, but go ahead.
Sean: I essentially said, leading up to the call, I’m sitting there thinking: so this guy is having people download these whitepapers, producing a bunch of relevant content on the industry. He’s going to try to sell me something! So I actually almost cancelled the call right before. Then finally I got on the call and the first 30 seconds I said, “I’m interested in talking, it sounds like you know a lot about the industry, and there aren’t many people who have this kind of knowledge, but I’m not going to buy anything from you. So if that’s where we’re going go here, I don’t want to waste your time or mine.”
Justin: [laughing] And then we continued talking.
Sean: Yeah, exactly.
Justin: No, you’re right. I do remember that actually, very vividly now. There were some weekends – I didn’t do it every weekend – there were some weekends that I went through my list; people that signed up, where I’d just kind of write personalized emails to people and say, “Hey! I’m a real person, if you need anything, just reach out.” And I’d try to look up what they were doing. That’s right; you’re right about that. What I do remember Sean, is we immediately clicked though.
Justin: I immediately knew that we were going to be friends. You’re one of our customers, but we don’t have a transactional relationship. We’ve done a lot of work together, you with us and us with you, but we haven’t done it financially, which has been a ton of fun, too. It’s made it a very, very relaxed relationship, which I appreciate. So, for the audience, Sean is one of my favorite people to speak with. I was just telling Sarah Falcon that Sean and I, we keynoted IRCE this year. Last year we were at B2B Online. And I remember what you wore: you’re on the stage, I’m in my “relaxed” stuff, which is jeans and a sports coat. And you get on stage with peg jeans, your converse, and your beanie . . .
Sean: It was cold out!
Justin: And I know you did it on purpose too; I know you did it on purpose, which was awesome. So the contrast between the two of us was so much fun to watch. Just the contrast between even how we delivered stuff, our personalities, how we were dressed, our age, everything was in such contrast, which made it a ton of fun to watch. I still have people come that up to me and say, “Hey that talk you did with Sean was amazing.”
Sean: Yeah, so do I. For sure.
Justin: Should have been the first one of that session, not last. Yeah, it’s awesome. So Sean and I have had a relationship for a long time. But I’m really excited for you guys to kind of hear the story. Let’s just start Sean by having you tell us a little bit of your story. How you got started in this, how you got started in digital marketing, and then how you started looking at TruPar. Before I get started with that, on the screen is TruPar.com, with the Terrible Towel. So Sean’s from Pittsburgh, and I’m from Cleveland. Every chance I get when I’m on stage with Sean, I try to make as many derogatory remarks towards the Pittsburgh Steelers as possible. So Sean thought it would be funny on his introduction slide at Internet Retailer and here to put as much Pittsburgh Steelers stuff on the screen as possible
Sean: And the really funny thing about that – I mean, Cleveland Browns fans wake up hating the Steelers. That’s a majority of their day, OK? We don’t even think about you guys.
Justin: That is so much more hurtful than knowing that you hate us.
Sean: We don’t like the Patriots, because we see them in the playoffs!
Justin: You don’t see the Cleveland Browns. So much more hurtful than knowing that you hate us . . .
Sean: So yes, I am from Pittsburgh, I was born and raised in Pittsburgh. I actually grew up – my father’s been in the material handling, industrial equipment industry my entire life; my father and my mother. They built this business together. And you know my father’s a pretty traditional dealership whenever it comes to forklifts; he sells large and small forklifts. So if you’re in the Pittsburgh/Eastern Ohio area and you need the actual equipment, I can get you his details. So I grew up in the industry, it was just kind of what I knew. In 2006 I graduated from high school and I found a girlfriend and kind of liked to snowboard. So I decided to move to Colorado. And that’s after I barely graduated high school; I did a little bit of cheating, that was my way of getting me through. And then I decided college wasn’t for me. You know you have to go to high school but you don’t have to show up to college. So I knew that would be my M.O. I moved to Colorado and did a ski bum job for a little while. Had really no dreams or ambitions, was getting paid minimum wage. And then finally I got my first computer in 2010, so I mean not that long ago. I got it to download music or whatever, didn’t really have any background. I think I wasn’t even on Facebook yet. But I got kind of introduced to the digital marketing industry. Social media marketing for business was getting popular at the time. So I read some digital marketing books, went to a conference, and decided I was going be an entrepreneur. You know I had been in some other things throughout my teens, with friends. I’m not a very good employee. I tend to – my dad says – push the envelope. So I tend to ask a lot of questions. If something doesn’t work or if I don’t agree with something, I kind of just say it, and come up with my own way. So I started this digital marketing business, social media marketing, and I was living in Aspen, Colorado at the time. I started doing marketing for local businesses. So giving them a social media presence, starting to take their websites and build them new websites or optimize their current websites and throw that on Google. Get it to the top of Google through SEO and content marketing. And one of the companies, I said to my dad, “I’m doing this thing, your website’s kind of crappy, let’s do some marketing for your business.” So I started doing local marketing for equipment leads. And then in 2012 after doing marketing for him for a couple years, and also learning about the industry, we grew pretty quickly. I at one point had an outsourced team of 20 employees doing development and marketing work. And I said to him, I think that we could sell parts for this equipment online. And he wanted to stick with the equipment leads. His response? He said, “go ahead and try, but it’ll never work . . . people buy from people.” And I often think about that because the amount of times I’ve heard that or a similar version of that in the years since, especially in the B2B industry, is astonishing. So I just thought, “oh you know, small business, you’re kind of close-minded about this stuff.” I mean, plenty of people who are very educated, very good in traditional business, say the same thing to me. It’s been an interesting journey because of that. I’ve definitely always had to kind of be the “show me” guy, no one ever just takes it as a “Oh! We think it’s going to work, we’re behind you!” It’s like “we think it will never work,” and then I like to prove them wrong. So he said that, he kind of gave me the green light, he wasn’t going to pay for it, but if I did it, it wouldn’t be a conflict. He has different clients, it’s a lot more territory based, and I was going after the whole Internet. So I started working on TruPar.com, which stands for Truck Parts, if anyone wants to know. And I started working on that during the nights and weekends, starting in 2012, and did a couple light launches of this. Without his connections, I wouldn’t have been able to get connected to a lot of the large manufacturers and wholesale distributors in the industry. He’s been in the industry for a long time, and so I can’t discount that. Because of my last name, because of the history, I was automatically given access to things that someone off the street wouldn’t necessarily be given. It’s a pretty small industry in the grand scheme of things. So I was building this site. I had partnered with a couple wholesale manufacturers and distributors and gotten some product content. I was building the site over the next couple years on the nights and weekends and still had my marketing clients. Did some soft launches and some just kind of tests, and saw that we were getting some interest, we were getting some traffic to the site. And so in September 2014, I fired my marketing clients, and launched TruPar.com as my primary business, which was a big risk. I launched it with 1 million material handling replacement parts for 400 brands. That was kind of the first iteration. I got to learn about the things customers wanted and the products customers wanted. So I built that catalogue, I started adding customer service reps, I did some optimizations to the website. A big part was building the catalogue, and it was one of my hang-ups with the previous platform that I was on. I just re-launched my eCommerce site on Oro Commerce. The founders of Magento started a B2B eCommerce platform that had a very similar vision to mine, whenever it came to what the future of B2B eCommerce technology looks like. They also have a track record of building the largest eCommerce platform in the world – the most deployed eCommerce platform in the world – and I’ll talk about that later. So, by the end of 2016, we had 7.8 million parts for 600 brands, over 40,000 B2B customers globally. And we had automated everything so that we could ship to 90% of the U.S. in one big round – flat rate, and two-day ground for Canada, and then Mexico would be next. And that’s with four full-time customer service representatives and myself, and we continue to grow without having to add personnel to the staff. How’s that Justin? (referencing sound issue).
Justin: Ah, that sounds much better.
Sean: Ahhh, gotta love Bluetooth. I’m supposed to be the tech guy, and it never fails.
Justin: No, no worries. So, you started talking about the platform. So you were previously on a B2C platform? When you first launched TruPar.com, you were on a B2C platform?
Sean: Correct. So I built the actual website on a platform called Volusion, which is kind of like a Shopify or a BigCommerce competitor. They focus primarily on B2C. They kind of have the monthly, under $1,000 pricing plan, and they’re pretty restrictive in terms of the things you can do. But that was kind of my price point considering I bootstrapped this thing from the beginning. So that was where I started, and then quickly I realized that there were a lot of features that I needed that this solution wasn’t going to provide. As well as my large catalogue, that was a big part of it. With Volusion I continued to max out with each million products I would add, it would kind of break down from there. So then I started looking at other platforms to re-platform the site. But the problem was that I’m not this big enterprise with a million dollar budget to make it happen. So it was an interesting journey to go from knowing I needed a new platform to actually getting one launched.
Justin: And on top of the catalogue, were a lot of the features you were missing kind of the B2B features? Or were they kind of B2C features that you were missing?
Sean: What’s interesting is that I started this with a very B2C mentality, kind of said, “no more quotes!” because I saw the inefficiencies of my father’s company, which I’ve just realized are pretty much standard B2B best practices. And it was like account set up time, multiple users per account, corporate pricing, special catalogues for certain customers, multiple price lists, the corporate account management piece, requests for quotes, conversion to order, they all just would take so much time and involve all these different departments, and it was just a broken system in my mind. And so I really wanted to find a solution that could make a lot of this self-service for customers. I believe if – I’ll read this; I was going to talk about this later. In the 2011 letter to shareholders, Jeff Bezos, the founder of Amazon, says that “Even well meaning gatekeepers slow innovation. When a platform is self-service, even the improbable ideas can get tried, because there’s no expert gatekeeper ready to say that will never work. Guess what? Many of those improbable ideas do work.” So that’s his quote; that’s kind of the mentality.
Justin: So you’re on this B2C platform, now you want to move to a more robust platform. Tell us a little bit about that process which you went through.
Sean: Oh man. Well, it involves having calls with guys like you, because I had no idea. I had no idea what was available. There isn’t much information out there. And so whenever I found eCommerceandB2B.com it was like a breath of fresh air, because I was calling all the big software vendors and I wasn’t even close to their target market. So I knew I needed all these features. I had been around the development/programming world enough to know that all these features would be a little too robust for me to build in-house. So I started exploring. What I found was that there really weren’t platforms out there tailored to a start-up quote-on-quote disruptor mentality, because if you’re not in the Fortunes list, we’re not interested.
Justin: I remember this conversation . . . I remember having this conversation . . . there are very few (if any) platforms that are less than $500,000. We’ve actually watched a major shift over even the last 12 months. Oro, the platform you chose, over the last 12-18 months has joined a few others. But there’s still very few platforms. But when you and I were doing this, when you were going through it Sean, there were very few . . . there were slim pickings. And so you eventually settled on Oro, and when did you launch your new site?
Sean: I launched the new site June 1st.
Justin: Oh wow, that’s cool.
Sean: So about a month-and-a-half ago.
Justin: So, tell us about the re-launch and how that’s gone and what you kind of see in the process.
Sean: Well first off I’ll tell you about personally and emotionally . . . it’s one of those unicorns that you finally catch. I’ve been working on this thing for so long, being that we have a pretty bare-bones staff, I owned this project and also still had to continue to run my business and continue to grow and service my customers. So I tried a number of solutions. I tried to doing it cheap, I tried partnering up, I tried all these different strategies. Whenever I got with Oro, it was kind of like paying me back for all the pain and nights and weekends and lost girlfriends and all the things. It was finally that fit. So I started working with them less than a year ago. I had a lot of doubts that they could even do what they said they could do, just because of my jaded perspective. So they spun up a demo site and put all of my products on it in less than a week-and-a-half. That was something that other solutions couldn’t do, or at least I never saw it happen. So that was the selling point for me. Since they proved that to me, I signed on with them. It’s the first experience I ever got where I was actually dealing with a real modern software development company. The mentality was about continued innovation, and not these large project plans that never come to fruition. So it’s been a breath of fresh air, because we get to continue to add features. The platform has an open source side and the enterprise side. It’s written in a common code base that developers all over the world understand. We’ve gotten the opportunity to add features as if they were a part of the product, not just a bolt-on. We got to add custom TruPar.com features that were just a pipe dream for me. So it’s been great. Now we’ve launched it and I kind of have to step back for a second. I have all these plans and visions to really utilize it in the best way possible. Now I get to jump into another project. The launch has been good, it’s definitely one of those things where they handled maintaining all of my SEO. So my current customers and previous customers weren’t affected. Now it’s about training my internal staff and continuing to keep them up to speed with new features coming out, because we are an eCommerce company. It’s not a marketing strategy; this is our business. And with that in mind, we have to run it like it’s our business. And every single thing, every single customer interaction, needs to be thought about that in that way, in the eCommerce frame of mind. Does that make sense?
Justin: Yeah, absolutely. For those listening to this, Yoav Kutner was one of the founders of Oro. Yoav was the brains and everything behind Magento. Magento was just sold to Adobe for 1.68 billion dollars, and Yoav was the one – the guy, the architect, the technical, the brains behind it. So what I know about it is that Yoav has really taken everything great that he learned there. He knew that Magento didn’t really have a B2B eCommerce platform. So Oro is the manifestation of all that work, and any mistakes made in Magento are now corrected here, and so it’s a pretty incredible story. And so when Sean talks about this modern architecture, it’s modern architecture from the lens of a guy who’s literally an icon in the industry, which is really, really cool. So Sean, you have almost 8 million parts; why did you choose to have so many SKUs? Distributors kind of go through this balancing act: “Do we just put our stock items on? Do we just launch with a small catalogue instead of a big catalogue?” Why did you choose to have so many SKUs?
Sean: I am very much of the belief that – it’s the same conversation I kind of had with dad about the first iteration – my father’s suggestion way back then was essentially, “let’s just put our fast movers on there,” and then not only that, but, “make them call us or log in for the price.” I came from the mentality that if you build it, they will come. There’s not a thing that a customer can call us about that they can’t see publicly on the website. So it’s not like we have some secret behind-the-curtain situation, we really expose all the products we can offer, we tell them exactly when we can get them to you. And sometimes they’re backordered, sometimes it takes 3-5 weeks. But often if you Google the part number, we’re the only result that comes up. And in 2018, that’s not a common thing, unless you typed something wrong. I show prices, I show delivery times, I let you set up the account, I let you order the products right there. You can pay credit card, you can pay with net terms. We partnered with another company that will approve net terms for you – kind of extend a line of credit – and you can purchase right through the website, like a pay with PayPal button. It’s really been about transparency, and exposing everything that we have to our customers.
Justin: You said it fast, but I want to come back with it. You have SKUs on your website, that when people search on Google, it’s not like you’re on the first page – you have SKUs that you’re the only listing. Your conversion rate better be super high on those!
Sean: Yeah! Unless they typed it in wrong. But at the end of the day, I was just looking at an order that we got the other day, for a piece of JLG equipment. We sell all aftermarket parts that meet or exceed OEM. So we’re the Advanced Auto or Napa or AutoZone of the equipment industry. I was looking. I did a search for a part number that a customer ordered the other day, and we were the only result. So isn’t it nice, when the only result will show you the price, and let you order it and you have it on its way to you within minutes?
Justin: So on your website, I can literally put my ZIP code in, and it will tell me the price it is to get it to me, and it’s one day shipping. So how do you calculate shipping? Talk a little bit about mechanics of product data, calculating shipping, and things like that that you guys do?
Sean: So I look at it like . . . from the beginning, I’ve involved my customers, partners, vendors, in designing self-service capabilities. What that means is I’ve built this presence online to the point where I can make some demands on my vendors. I can say: “here’s the information that I need from you, here’s how I need it, and here are the SLAs that I expect when it comes to getting the product out the door, the stock being correct, etc., or else I won’t deal with you.” Customers are #1 for me. That affects my customers if we have weak information or incorrect information. If I’m trying to get all my customers to drink the Kool-Aid that they can trust it just as if they called it into us, then it has to be right. So that’s been a big part of my business model. Really using vendors and treating vendors as partners in this and not as much that we’re just another customer of theirs. Working with their teams internally, and integrating into their systems so that whenever you’re looking at products, it’s calling a number of different vendors, picking the best price, the best delivery time, and then displaying it to you right on the website. Then whenever you go and create an order for that, it pushes it directly to the vendors. They have the order within seconds of you clicking the “Create Order” button. So automatically that stock that you saw on the website is getting picked, packed, and shipped, and is reserved for you.
Justin: That’s a pretty remarkable thing to hear. You treat your customers and suppliers with the same level of respect. Yeah, you said you make demands, but you did that with the purpose of selling more of their products. Amazon . . . there’s a recent podcast with the VP of Amazon Business. In that podcast he talked just as much about the supplier experience, the vendor experience, as he did the customer experience, and what they’re trying to do to enable that. And you’ve taken that tact since you’ve started this.
Sean: Yes. A lot of the reason that we’ve had any success is because of those relationships and those partnerships and me continuing to push the envelope and ask, “Why? Why can’t we do it this way, why can’t we push harder?” Then whenever the right people get involved in that process at the executive level of my forward-thinking vendors, it’s a flywheel. As soon as my forward-thinking vendors get on board with my plan, and provide me with the information and the access that I need to be successful, then all of the other vendors start hustling and bustling to follow suit.
Justin: So today the first banner that’s on your website is about your net terms. Talk a little bit about how you’re facilitating your net terms. I think before you were really truly kind of B2C, and now you moved. In our world we talk about customer adoption versus acquisition. You’ve started on the acquisition side, and now you’re really trying to build these long-standing relationships by facilitating terms. How are you facilitating terms without the standard credit manager, send me a PDF with your information, Social Security numbers, all that jazz.
Sean: I’m not a bank. And that’s my mentality. This idea that just because we’re in B2B we should be a bank for our customers is a broken model. I’ve thought that for a long time. So that was a difficult journey because how do I do this? Do I raise capital? I can’t be floating hundreds of thousands of dollars to different customers with the risk of them paying me late or them not paying me at all. That would inhibit the partner relationship with my vendors. I pay them quickly, I pay them on time, I pay them every time. In the early days, that kind of position – we just couldn’t take that kind of loss. And so I was actually on a panel speaking with a gentleman, Michael Nobel, who started this B2B payment platform called Apruve. Essentially he’s built this business that sees these same pain points, and he’s partnered with a number of financial institutions. They have essentially built this platform, it integrates into the website, you fill out your credit application like you would a traditional credit application, references, Dun & Bradstreet number. They’re going to check you out just like an in-house accounting team would do. Then they approve you for a certain amount of credit, and at that point they’re the ones assuming the risk for that credit. I get paid just like I get paid from credit card companies. There is a percentage to that, but it’s no different than a credit card percentage. I’m already used to that. There were times over the last several years that I’ve lost good customers because I didn’t have the capabilities to offer terms to them. And they had proven their worth. They had done a good bit of business with us. But at the end of the day it wouldn’t have been fair for me to offer terms to them even if I knew they were going to pay, because we didn’t have the team to facilitate that. So Apruve has really taken that burden of collections, credit approval, credit management, and let us do what we do well. And that’s eCommerce, and getting supplies to customers. And Apruve gets paid for it.
Justin: I think what’s interesting about that is that we’re watching something happen in the industry. Different segments in the industry are starting to look at technology to enable someone like you to quickly get up to speed. You said it, right? To offer terms yourself, you either needed to raise capital or find another way to do it. Now you have a technology come in, a FinTech (a financial services tech) like Apruve. They come in and say “we’ll offload that, we’ll give you all the technology to do that,” and you’re kind of just plugging them into your website.
Sean: And then a step further, partnering with Oro and going with Oro; they built a platform that can easily integrate in with a system like Apruve. So them building out that extension and having that ability, that was the one kind of “X” Factor. What’s it going to take to implement this on my website? So the customers can actually check out and it will verify they have an account, etc., all in a seamless experience. And so that’s kind of the final piece of that tie-in and how seamless and easy it was to make happen.
Justin: So talk a little bit about how without having a legacy business – most of our customers inside the Digital Branch are legacy business owners, they have a standard branch-based business, a location-based business – but you didn’t have that legacy business. You left your dad’s business to kind of remove all of those processes. How has that helped you do things better, and how do you think you’re able to approach that differently?
Sean: So like I was saying before, it’s allowed me to involve customers, partners, vendors, in the design of self-service capabilities. My business didn’t have to fit; I didn’t build my business around – in my opinion – legacy broken processes. I was able to build my business around customers, and customers who wanted to shop online. So I observed them as they tried to accomplish activities important to them. And truly understand their requirements and goals, and get their ideas on how to improve. Then I designed services and workflows from the customers’ perspectives, regardless of how systems are internally. Then I expose everything. So the first suggestion is, if you don’t want to do it yourself, I’m happy to add your product to TruPar.com. And I can do that because I am continuing to expand the vendor base, but I have a feeling that’s not why people are on this call. So the suggestion is, if you’re going to do this, for one thing guys like Justin really have a firm understanding of the personnel and requirements you’ll need internally. But the main point is – I believe that if you really want to be successful in this digital transformation, or some of these buzzwords – you have to have a team internally that can run as an autonomous business. That was a big struggle I had trying to work in my father’s company; everything that I was spending my time on was just ways to fit eCommerce into his business. It wasn’t ways to serve the customer. So when I took it out on my own and got to kind of rewrite the book, it allowed me to innovate and kind of question the status quo and operate autonomously. Now I do believe that could happen internally at a legacy business. But these gatekeepers – you need to let this group, this team, operate autonomously from the rest of the bureaucracy of the business. There’s no way that you’re going to compete and stay up to speed if every little decision needs to come back and there’s all of these naysayers about it. You want to test, you want to track those tests, and you want to make changes accordingly. And you need to move fast.
Justin: Very cool. My head’s a little swimming from it, because I think that most of our customers – most of the distributors that we work with – they build these processes, and at the end of it, maybe somebody says this: “Huh. I wonder what our customers think about this new process?” And you’re starting from the customer back and saying, “What does the customer need? Let’s just build that. And by the way, I’m going be unrelenting until we can do it.” And I think that’s your philosophy, too, right? I’m just going annoy the heck out of people until they give me what I want – if it’s for the customer!
Sean: Hey, what are you trying to say? But you’re right; obsession is one of our core values. Customers will tell you if you listen. You have to obviously listen to a customer, and balance getting to the root of what a customer wants, because they may ask for something that isn’t a standard B2B eCommerce practice. But if you really dig down and keep asking why, you figure out what they really want, and you can build that and scale it. And it’s not just this one customization for this one customer.
Justin: So you’re asking questions to try and get to the heart of what the customer needs. And then you’re building customizations for it. I always think of the guy – you know, no customer ever asked for intermittent wipers. However, a guy saw the problem with wipers, and saw customers where there was no in-between spot, and he solved a problem for the customers even though they didn’t know what the solution was. You ask all the hard questions and keep being curious about what they’re doing, and then you build solutions and test them, right? I’m sure you’ve done stuff that just doesn’t work, or you need to pivot on.
Justin: What does your team look like? You started talking about your team of four people. What does it look like for you guys?
Sean: Really, it’s kind of shifted over time. The phones keep ringing more and more. Even though we’re eCommerce, we sell replacement pieces that customers need a little hand holding through. Understanding that hybrid between the traditional, you can’t find a phone number on Amazon, versus my father’s you can’t do anything without talking to someone, I’ve continued to build that customer onboarding, customer support, customer service staff. Even just to facilitate walking them through how to check out online. Or how to walk them through finding product or requesting a quote. Or any of these features we have online. We’re available in the U.S. to facilitate those needs and kind of teach them how to fish and not just feed them. That’s been a lot of my team, and then there’s been the partnership with Oro and my vendors; essentially they’re an extension of us. We have our technology team through Oro. They’ve continued to step up to the plate and really understand my business problems and come up with innovative, scalable solutions. And then on the other side as I’ve built relationships and partnerships with these vendors. We’ve used their internal staff to facilitate some of the more technical and industry knowledge. And then we are the go-between between the customer and that industrial world.
Justin: Last question for you. So if your dad came back to you now and said, “Hey Sean, help me, be the consultant, you’ve proven it to me. Help me launch this business because I don’t know that I don’t know.” What would be your recommendations to him? What are the top things you would recommend to your dad if he said he wanted to do this on his own now, “help me figure it out.”
Sean: Really, you’re the expert in that world, because obviously that hasn’t been my story. But I would say a lot of things I’ve mentioned already. First off, you would need someone with an entrepreneurship heart, and you’d need complete autonomy from the traditional business. The second that someone has to get involved in the long meetings to have meetings and all of these ideas without decision or action, it just slows the ability to do this as quickly as you need to. Guys like me are coming. It’s inevitable; you can turn to B2C and watch what’s happened there. It’s one of those things – the disruptors are coming. So in order to truly compete and stay competitive, you would need to enable a team to work autonomously from the rest of your organization. And obviously set goals and milestones for them, (just like outside venture capital would), and expectations. But whenever it comes to day-to-day decision making, they need to be able to make these decisions and try and fail and try again. So that would be my suggestion: build a team that has that autonomy and with someone leading it that is of entrepreneurial mind, and has that mentality of starting with the customer and working backwards, and I think you have a lot better of a chance of success than just trying to get your legacy programmer to whip up a website, or paying some third party to build you a website. Building a website is the easy part. It’s the internal processes and internal operations that will equal success or failure.
Justin: You’ve heard me talk a lot about adoption. We talk to some distributors and we say this: look if you just want to move slowly through the stages, then you can have an internal team. If you want to do this the right way, if you actually want to move quickly and actually establish a digital business, you have to separate, almost into its own P&L. I mean, I guess that’s what you’re saying, right?
Sean: It is.
Justin: Own P&L, own department, own company, essentially.
Sean: Right, right. My own P&L, I need to know if I’m profitable, everything. If I’m an entrepreneur I want to know those things, and that’s how it should be operating.
Justin: And you can leverage the supply chain capabilities, of your company, right? The things that you do really well. There’s probably a bunch of things within that distributor that they do really, really well. Obviously they have tons of knowledge about product.
Sean: And a lot of the struggles that I’ve had to bear myself, and I’m kind of coming back around on. Because I completely separated, you have that competitive advantage. If your company has people and kind of industry presence, there’s no value that you can put on that. This autonomous organization internally isn’t meant to be the redheaded stepchild. The thing is that you want them to be able to feed off of the experience of the traditional company. It’s just whenever it comes to decision-making, financials, and kind of operational processes, that’s where they need to be able to run autonomously.
Justin: Really, really good. Sean, really, really appreciate it. Let me just wrap up with two big things that I heard. Every time you and I talk, you talk about putting the customer first. Put the customer first, put the customer first, what does the customer say about that. And that’s actually really cool with a traditional distributor, because a traditional distributor already has a customer, right? They didn’t have to be like you did, and go find customers. These guys already have the customers. So, it should be easier to put the customer first, even though that might not be a part of it. For any of you listening on the phone, journey mapping is a great way to start that. Journey mapping is a great tool to use to put that customer first, and really dissect it. The other main thing – I think that last point that you made is so important. To really be successful, to do this the right way, and if you just want to limp along, you can limp along through a customer adoption strategy. Kind of having an internal team that reports to IT, and then eventually the CEO. But if you want to do this the right way, and we’re watching SupplyHub, companies like that; that created a separate company, completely autonomous, millennial-owned, everybody in the company is millennials, and they’re building everything from the customer perspective. You look at TruPar and you see these guys that are really successful; the ones that are able to really scale the business quickly, and test, optimize, track, rinse, repeat, are the people that have actually separated the business. And that’s a scary conversation for most people to have inside the distribution business. I mean eventually you had to leave to make that happen, Sean.
Sean: Yeah, the owner’s family.
Justin: Yeah, and if you’re an owner listening to this, listen – this is an important conversation. If you want to do this right, if you want to blow it out, it’s a very viable strategy, to look at actually separating the P&L out. And then leveraging as a partner all the things that you do amazingly as a distributor. So really, really cool. Dude, I really appreciate it.
Sean: Thank you for having me, sorry for the audio –
Justin: Proud of you! I’m proud of you and everything you’ve accomplished. I can’t wait to see what’s next on the list for you to do.
Sean: We have a backlog of fun things coming.
Justin: Well, then let’s do it again then soon. Thank you very much. Awesome, appreciate it.
Sean: Thank you so much.
Justin: Have a good one.
Sean: You too.
Justin: Alright, bye.