Schiit Happened: The Story of the World's Most Improbable Start-Up
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2020, Chapter 2
The E-Commerce Shakedown



“Oh gawd, salespeople,” I said, when Tyler and I hung up.

“We’ll see what they want,” Tyler told me, smiling. Tyler was pretty happy, after seeing a shiny demo.

“They’re gonna want our shoe size, annual revenue, first-borns’ souls, and a billion dollars,” I said.

Tyler nodded. “They did seem pretty reluctant to give us any pricing.”

“Yeah. I don’t like it. They’ve spent days dancing around, saying we needed to see a demo before pricing, then they had to ask us a bunch of questions, now they have more questions? I hate this salesy crap.”

“Not everything can run like Schiit,” Tyler said.

That just irritated me. And why not? I wanted to ask. The biggest screwings I’ve ever gotten was when some salespuke spent a bunch of time feeling me up to see how big by wallet was. The biggest biggest screwings of all time were from companies that didn’t have any published pricing. Every “deal” custom. Which means “each deal engineered for maximum screwing.” This was just SaaS. It should have a price sheet. A public price sheet.

Tyler saw my irritation. “But you have to admit the demo looked good!”

“If anyone actually uses it.”

“Dude, it’s waaaayyyyy easier than what we have now. Why wouldn’t they use it?”

I just shook my head. It wasn’t time for a story about how, back at Centric, we once had a complete project management system custom-coded to exactly our specifications, and everyone loved it, because it did only what we needed and nothing more. Looking back on it, it was really a driver of Centric’s salad days. Over time, though, the system got slow, new people came in and wanted to put their stamp on it, and some new canned project management systems started looking pretty good. So we tried them. We even deployed two of them. Everyone spent 80% of their time bitching about how they were different than what they were used to. In short order, nobody used them. We were soon left with inefficient, manual project management systems (and, ironically, the old system never really died, we kept it limping along to do searches on old projects.)

“Well, they’ll get back to us soon, and we’ll see,” Tyler said.

“We’ll see how much they wanna screw us.”

“You’re just too cynical,” Tyler shot back.

I sighed. “I’m Rick, not Morty. I’m realistic.”

“I thought you were Willie Wonka,” Tyler said.

“Wonka never got threatening letters from a customer, or a federal lawsuit for making children fat,” I told him.

“Well, we’ll see,” Tyler said.

And we did. That same day, they sent us an email asking for fourteen business metrics, all couched in unexplained acronyms, and none of which I figured were any of their damn business, I wasn’t surprised.

I was done with stupid. All I wanted was a price for their friggin service.

So I sent them a one-line email:

“What are these acronyms, and why do they matter? Give us pricing or we are out.”

I copied Tyler. Tyler sent them a similar email, about 10 times longer, couched in Victorian/Captain-Of-The-Debate-Team rhetoric.

They flipped, of course.

They emailed.

They called.

They wanted to explain.

Yeah, explain why you’re a bunch of salesy assholes who want to know 100 things about our business that have no bearing on price, I thought, and didn’t respond.

And that, my friends, is how we got introduced to the modern world of online commerce platforms, a saga which quickly became “The E-Commerce Shakedown” in my mind.

And it’s how I remembered how much I hate salespeople.


Don’t Blame Tyler

Tyler is well-meaning. But Tyler has never developed and launched a large website, let alone torn apart and re-done an established, operating e-commerce site, which should give pretty much anyone the vapors.

Centric, however, had developed and launched many websites, from simple company profiles to the world’s first online leasing site, to e-commerce, to a virtual world for children, to online product configurators, to…hell, you name it, we’ve probably done it. So I knew how it was gonna go, as soon as Tyler and Alex decided that We Should Look At Our E-Commerce Platform and See If We Can Make It Better.

To summarize, here’s how pretty much any website project will go:
  1. It’ll take way longer than you expect.
  2. It’ll introduce you to new and exciting bills.
  3. It’ll break quite a bit, and in really bizarre ways.
  4. It’ll cause everyone you work with to complain about how it has changed.
  5. It’ll make all your customers complain about how it has changed.
Or at least this is how it feels. With proper planning, you should be able to get some meaningful and helpful changes in place.

But to think it can be done seamlessly…oh ho ho!

Or to imagine it can be done without teeth-gnashing and histrionics…yeah, you’re hilarious.

Or to get the idea that you can simply pound the table and make it work…nah, nevergonnahappen.com.

“So why are you guys thinking about re-developing your site?” someone finally asks.

Great question. Especially when probably 80% of the sites Centric developed were because the company was bored with them, not because they needed any additional functionality.

Stop. Go back and read that. Because they were bored.

Do I need to even say this? Yes. Maybe. So here it is: this is not a good reason to change your site.

In our case, we were frustrated with what seemed like some dicey integration issues, and we were hoping to bring some more functionality to the back end of the site. To summarize:
  1. Our current website ordering system was 100% manual. It didn’t integrate with anything that allowed batch processing, like ShipStation. Doesn’t sound like much? As order volume increases this quickly turns from a “nice to have” to a “we really need this.”
  2. Also, the site didn’t integrate with Fishbowl, our inventory system. See above. It had long since gone past “nice to have” in this case.
  3. Ranking of orders for fraud red flags was 100% manual, it would be nice to have an automated ranking system (that didn’t cost 1% of your revenue—not kidding, more on this later.)
  4. Visibility of customer history was, well, kinda invisible. It’s nice to see someone’s order history when trying to work out how best to solve a problem.
On the front end, I also wanted to do a couple of things:
  1. Allow better sorting and display of products. This wouldn’t mean changing the default display, which has been tweaked and tested and works very well, but allowing customers to sort and choose products, product stacks, and product groups in different ways (cost, type, comparison, etc) would be nice.
  2. Bring in “also purchased with,” in a non-intrusive way. Now, before you tell me how I am satan incarnate and a representative of the evil salesman class I hate so much, I was NOT thinking of doing anything in the cart. It would be more of a “a lot of people buy a Modi to go with their Magni,” kind of thing, with an explanation why. And even then, I might decide I didn’t like it, that it was too pushy.
So yeah, a bunch of things on the back end to improve our processes, and maybe a couple of things on the front end. These are the things that started us looking at kinda-sorta, maybe like, just maybe, changing the e-commerce platform we were on.

“Sounds kinda basic,” you might say. “Like, not enough to change the whole site over.”

And yeah, I hear you. I even said that exact thing.

But Tyler and Alex thought we should have a look. Our current site is 100% custom-coded and maintained by a single guy. Alex complained that our guy hadn’t always been able to hit the mark on site additions, even if he was responsive. Tyler brought up the “what if he decides to stop supporting the site,” scenario.

The former complaint—not hitting the mark—I had to push back on. “Did you ever give our guy a functional requirements document?”

“What’s a functional requirements document?” Alex asked.

“How about wireframes?” I asked.

“No,” Alex admitted

“Pencil sketches of what you want?” I continued.

Alex shook his head.

Yeah. And there you go. With no guidance, he’s gonna miss the mark. It was actually amazing how close he’d come, so many times. And he always ended up getting us there.

But the “what if he doesn’t want to do this anymore,” I didn’t have a good answer for. Because that was a real problem, if it happened. And even if our guy had always been upfront, and wouldn’t want to leave us hanging, unexpected schiit happens.

So I agreed to talk to a few of the leading e-commerce platforms.


Shiny Shiny

Now, if you’re browsing the sites of most e-commerce platforms these days, they look pretty good. Shopify, BigCommerce, Magento…they all promise the moon and have relatively inexpensive per-month fees. They say they’ll take care of everything, order processing and security and fraud and integration with your other systems and you can build pages in seconds and get a billion orders a day.

Except…look closer.

Hmm, what’s that about “Enterprise?”

And what’s that about “contact us for pricing?”

Yeah. Each and every one of these platforms is a roach motel. Roaches check in, but they don’t check out.

As in, it’s dead easy to get started on any one of these platforms, if you’re just starting to sell online. Any one of them can get you up and running quickly (albeit with a site that looks like every other long-scrolling, graphics-heavy monstrosity out there). Any one of them will handle your orders, credit card processing, and most of what you need to start selling.

And then, with, say, BigCommerce, as soon as you hit $400,000 a year in sales, you’re “Enterprise.” Which means you then get assigned an account rep (sales puke) who will help you maximize your business (extract more money from you.)

Oh, you want to leave? I don’t know how easy it is to get your data out, but I know I don’t want to find out.

But anyway, back to us. We were not a startup. We were an established, operating business. Which makes the stakes way, way higher.
  • What happens if the site goes down in transition?
  • What happens if the site doesn’t work the way you wanted it to?
  • What happens if the customers don’t like the new site, even if it’s supposed to be better?
  • What if they don’t like it, even if it’s supposed to be the same?
  • How painful is it to get historical data in?
  • How much worse is it to get it out?
So yeah, there’s a lot of potential eek there.

And then you start talking to them. And the eek gets bigger.

In our first conversation with our first e-commerce platform, they were totally up-front about it being a sniff test. As in, “We’ll talk to you and then we’ll see if we will pass you along to an account rep.”

That didn’t feel good, but I tolerated it. To establish some credibility, we gave them a rough idea of the amount of orders, and the amount of business, we did. We also asked them for ballpark pricing.

Which they declined. Flat. “We have to get a better idea of your business before we can do that,” they told me.

That didn’t sit well with me, but hey, maybe it’s just a thing. I decided to go along, though my salesperson bullshittometer had started to twitch.

But when we got to the second call, and the demo, the red flags really started popping up.

“I see we can integrate our Amazon listings as well,” I said, because if we could manage the site and Amazon from a single interface, that would be a plus.

“How much do you do on Amazon?” they asked.

I told them. “We’re also in the Brand Registry, and on our way to Seller Fulfilled Prime. We’re also deploying A+ Content.”

Silence for a while. Then: “You should probably stick to managing your Amazon presence on Amazon.”

Hmm.

Tyler asked about Shipstation, and that opened another can of worms.

“Yes, we can integrate with Shipstation, they are one of our best-in-class partners. We’re really focused on bringing together best-in-class solutions for all of your e-commerce needs,” they told us in that impossibly chirpy voice only the best salesdroids can manage.

“They aren’t yours?” I asked. Growth through integration could be a whole big bag of worms.

“No, they are our partners. From our special rate through PayPal for processing—”

“—which is higher than our current rate,” I reminded them.

“Actually, it’s a bit less, Tyler said, “If you factor in the lower rate for American Express cards.”

“Oh, that’s good,” I said. Finally something positive.

Unfortunately, they continued talking (or maybe they never stopped), “—and we have partners that can reduce your fraud burden—”

“Wait a sec!” I interrupted. “That isn’t included?”

“No, but I can include that in your quote.”

Argh. We’d talked to fraud prevention guys before. It’s not fraud prevention, it’s an insurance/bookie service (same thing), that screens your stuff and takes the risk.

For 1% of all transactions.

Go back and read that again.

Doesn’t sound like much? Oh, to live in your world.

Here’s the reality: when you start adding all the fees up, they get really big, really fast. Remember, these numbers come straight off the net, not the gross:
  • 2.2% for credit card processing (a decent blended rate)
  • 1% for fraud
  • 0.5% for platform (typical of ecommerce, no matter what they tell you
And let’s say you have a great year and your net is 10% (not atypical). You want to take nearly 40% of your profit and spend it on processing and fraud and platform and integration? Really?

Yeah, thought so.

And this is why I have a bit of a laugh when I’m told we’re raking in the money on $150 Unison USB upgrades (not kidding). From the outside, it’s easy to look at cost of parts and say, “Wow, I can build that cheaper.”

Yes. And you should. Everyone should do DIY. It’s fun.

Unfortunately, it has limited congruence with business. To have a stable, long-term business, you’re gonna get a firsthand schooling in what “cash flow” actually means. As in, you watch the cash flow past you as it goes to:
  • Parts purchasing, including bulk big-ticket stuff like chassis, transformers, and boards.
  • Salaries, especially if you’re making stuff in the USA. And especially if you’re like us and starting at well over minimum wage. And remember, you’re not just talking about staff for building stuff, you’re talking about testing and packing and shipping and repairs and engineering.
  • Salary co-pays for taxes and insurance (one of our employees was floored to find out we matched his contribution to Social Security and Medicare)
  • Facilities cost (rent, fixtures, repairs, heating, cooling, etc)
  • Compliance testing
  • Equipment purchases
  • Insurance for facilities, staff, and product liability
  • Credit card processing, fraud, and platform fees
  • State, local, and federal taxes
  • The huge new burden of sales tax. We have to report and pay sales tax to virtually all states, some with many sales tax rates and jurisdictions.
Sounds terrible? Nope! I really love what we do. I’m just realistic about it.

“So what do I do if I want to not get screwed by e-commerce fees?” you might ask.

Great question. That’s the main reason I wrote this chapter. I figured if we was gettin a schoolin, then maybe you’d like to get one too.


How To Get Into E-Commerce (Without Losing Your Shirt)

Okay, so let’s start by clearing up a few things. In the chapter above, I used terms like “fully custom” and “e-commerce platform,” but let me give you a lay of the land.

In e-commerce, you basically have three choices:

  1. Use a hosted platform to make things easi(er). Hosted platforms include SquareSpace, Shopify, and BigCommerce. Platforms allow you to build a commerce site and start selling things pretty easily, and handle a lot of the back-end work for you, like credit card processing. They also typically take the burden of security off your hands.
  2. Build it yourself from an open-source platform. Open-source platforms include Magento Community, Drupal Commerce, and WooCommerce. Cheap? Like living dangerously? Or are you techy and can keep up with security patches and new versions? If so, you may want to go this route, because the price starts at free. Of course, you’ll have to set up and maintain a host, and if someone pierces your security, you’re boned.
  3. Build it yourself, fully custom, from the ground up. Are you insane? Yes? Then this can be a great option, because you will get only what you need, tailored exactly to how you work. You’ll also have some security through obscurity, but don’t think security is automatically “handled.” This is how Schiit does it currently.
“Well, hell, it sounds like nobody would choose anything other than a hosted platform, unless they are complete nutters,” you say.

And it can seem that way. When you’re starting out, these kinds of services can be very appealing, and can shield you from a lot of business foibles. When you’re more established, though, the costs can get to the point where going with an open-source platform or something fully custom can be attractive.

Plus, to make things more confusing, different platforms offer different pluses and minuses. So, let’s take a deeper look at the hosted options I mentioned before:
  • SquareSpace. Probably the easiest way to get started, but has very limited customization. No fees other than their monthly vig that is published on their site, so it’s super cheap. Not really ready for enterprise-level stuff, but it’s a great way to get selling fast.
  • Shopify. Much more sales-oriented and with many more e-commerce options, including a dedicated enterprise offering (Shopify Plus). They run your payment processing (eek) and take a vig on anything not run through their gateway (like PayPal). Also, they are still limited in terms of customization. If you want an interface that doesn’t look like a bad rip-off of the Apple Store, then best to look elsewhere.
  • BigCommerce. It is what is says. Much more oriented towards enterprise, though they allow you to build a site and get started fast (just beware, you’ll be pushed into the Enterprise funnel when your sales go over $400K per year). Completely customizable interface…but I’d beware of development costs and upkeep.
I also mentioned Magento, which is now owned by Adobe, and has both self-hosted, open-source (free) versions, and Enterprise versions. This shows pretty much how the system works. If you want to do the work yourself, it’s cheap. If you want someone to hold your hand, host the site, etc, then prices get big fast. This might be a fun option for someone who is more tech savvy, because you could literally start for free, then move up to Enterprise if you find you need the option in the future.

Now, this is not intended to be an exhaustive survey. If you’re looking at selling online, I highly recommend you do your own research, ask pointed questions, and, above all, be difficult.

“Be difficult?” you ask. “What does that mean.”

I mean this:

  • Call them on their salesperson BS and sales-y vibe (if they have one) and ask for a technical contact, if you’re more technical.
  • Refuse to give them your shirt size, fingerprint, Google Home recordings, Alexa request log, and all the other stupid things they will ask you for (actually, they’re gonna want to know sales, order value, number of orders, etc—your answer should be “none of your friggin business, give me pricing”)
  • Keep your options open. Don’t get too enamored of a canned demo, because it’s very easy to show something shiny that (a) won’t work as well as it seems, or (b) people won’t like to use. Keep talking to companies until you find one you like.
  • See how hard it will be to get your data in. This may be as simple as “use our sitebuilder,” if you’re just getting started, or navigating the realities of importing a few hundred thousand orders and thousands of custom SKUs (different product variations).
  • See how long the contracts are, and what gotchas might getcha. What happens if your magic new platform decides to go public and raises prices 2x-4x in order to make their revenue look good? Yeah, make sure you’re not stuck in that roach motel.
  • Find out just how hard it might be to get your data out. It’s gonna be a lot harder to do this, but it’s worth an ask—up to and including asking for examples of companies that have bailed, or asking one of their developer partners (frequently independent, like Centric) about any experience they may have with migration
  • Beware hidden costs. Yeah, they have partners for processing and shipping and Amazoning and De-Frauding and promotions and sales and 10 other things, but are they included, or do you pay for them? What’s the cost to transition your site.
  • If you’re gonna live and die by ecommerce, make sure they show you examples of companies that live and die by ecommerce. Ecommerce platforms LUURRRVE to show you examples of big brands. The bigger the better. Problem is, New Balance or Skullcandy don’t give no craps about ecommerce if they have eight thousand stores you can buy their stuff at. If their ecommerce site goes down, it’s a drop in the bucket. If you’re planning on doing direct sale, make sure they can handle something where ecommerce is the store, and it can’t go down.
  • Never ever ever plan for something that hasn’t happened. Expect that the transition will be difficult, and that your new site may go down. Don’t stop improving your current site, and be ready to fall back if you need to.
So what are we doing at Schiit?

As usual, following our own advice. We’re starting a round of much-needed updates to the current custom platform, and exploring other platform options. As of yesterday, we just got our site talking to ShipStation, and as of today, we fixed it so it was showing all orders (we think). When we’re confident the interface is solid, this will dramatically speed up order processing, and pave the way for automated scoring of fraud risk (based on our own algorithm, thank you, bite me you damn bookies). Next step will be Fishbowl integration, and then we’ll start looking at some UI tweaks. If everything works well, we may not need to change platforms at all.

But, at the same time, we’re also talking to some of the hosted platforms. Because it’s time to see what’s out there, and what we might be missing. We haven’t found anything super-exciting yet, but we’ll see.

And the sales-y platform that we told to give us pricing or we’re out? They gave us pricing. It’s not ruinous, but we were up-front with them about how their supadry supasalesy vibe boned them out of an easy deal. We told them that we were now looking at multiple platforms, that the evaluation period would be long and competitive, and if they wanted to throw their hat in the ring, they’d start showing us some examples of sites that live and die by ecommerce.

To their credit, they did everything they could to salvage the relationship, apologizing for their approach and giving us the examples we asked for.

But we’ll see. I’m not counting out any approach yet. If we can tweak the site to where we want it to be, we’ll probably keep going down that path. But who knows? We already talked to another platform today that was much more forthcoming on price…and more positive about keeping everything we want intact…and was much cheaper.

In any case, I hope you enjoyed this glimpse into the world of e-commerce—a much more sales-y and corporate sphere than I would have guessed.
 
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Are all those sound engineers at concerts / events complete morons?
Small incoming amateur sound engineering rant.

Background: I say amateur because that is my experience for the most part. Majority of my sound experience is for churches and my introduction was in university. A friend of mine was doing a music technology major and he was doing sound at the church I was going to for the summer. However, he was starting his final year and was doing sound elsewhere so he did not want to double commit. He knew I liked music and stuff so he gave me a 30 minute tutorial of how to check the levels, adjust gain, listen through the headphones to tweak the EQ, and the basics of how the sound flowed through the board to different outputs. I was then on my own, but did take time to read and learn more along the way. Over about a decade I got to experience lots of different boards and systems.

From all of this, I have found I have started to be a little... critical of sound engineers for much the same reason above. Some of it is the loudness aspect, though there are other things as well. For example, I was at a local show and the sound engineer had things set and then was off getting a drink or talking to his girlfriend and not paying attention to the stage. Between most of the songs, the band talked a little bit, and often it was the trumpet player. Because his trumpet is a lot louder than his voice, the mic was down and not very useful for talking, but the sound engineer failed to notice or adjust as needed most of the time, despite the trumpeter trying to yell and wave his hands to get attention. Yes, it was an opening act, but it still felt really disrespectful.

As for justifying loudness, there are two possibilities I can think of for why concert venues can be loud. First, is to keep people from talking. I have been to a few outdoor shows down in the Seattle area where the it was not very loud. One of them was Sylvan Esso and when they were playing, everyone around me was talking and treating it like music at a party rather than a concert. It annoyed me greatly since I was definitely thinking about how I could get a better experience at home and I had driven 2 hours for this.

The second is the way mixing is done for live concerts. There are a couple schools of thought for how to mix. I was taught more of the recording style. The live concert style often involves moving the sliders (which affect how much of the signal is sent to the main speakers) to the +0 dB setting (so just sending through what they get). Then they will adjust the gain of each channel until the volume is ok. However, this is subjective and I think can lead to volume creep. You set the vocals to good, and then the guitar, but now together you need more vocals so rather than turn guitar down you turn vocals up more, and so on. The advantage of this system is that if a song requires tweaking, the sound engineer can use the sliders. If they eventually get 'lost' and cannot find the good mix again, they just move all of the sliders back to the +0 dB position which they know should be a good baseline at least.

For those curious, the more standard (I think) recording method is that you check the levels of each channel individually and adjust the gain so that you are getting a decent signal that does not peak or distort. Once you have all of the gains set for the channels, you use the sliders to create a mix you like and generally do not touch the gain ever again. This method generally results in the sliders being in various positions and thus is harder to 'reset' to if you get lost in a live setting.

The third method is kind of a hybrid. Instead of setting sliders to +0 dB, you might put vocals higher, trumpet lower, etc. Put the sliders relative to their importance and then adjust gain to the desired audible levels.

Rant/discussion done.
 
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jnak00

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SaaS is the worst. A few years ago, we spent a lot of money putting in a new integrated workflow and scheduling application, Then we found out that by "integrated" they just meant you can view them both on the same interface. The two systems didn't actually talk to each other, and they were surprised that we would want our resource scheduling to be driven by both long- and short-range availability. It's fixed now, but that was a lesson learned - onscreen demos are next to useless, and hands-on demos are only slightly better. You need to ask lots of questions, even ones that seem like no-brainers.
 
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RickB

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2020, Chapter 2
The E-Commerce Shakedown



“Oh gawd, salespeople,” I said, when Tyler and I hung up.

“We’ll see what they want,” Tyler told me, smiling. Tyler was pretty happy, after seeing a shiny demo.

“They’re gonna want our shoe size, annual revenue, first-borns’ souls, and a billion dollars,” I said.

Tyler nodded. “They did seem pretty reluctant to give us any pricing.”

“Yeah. I don’t like it. They’ve spent days dancing around, saying we needed to see a demo before pricing, then they had to ask us a bunch of questions, now they have more questions? I hate this salesy crap.”

“Not everything can run like Schiit,” Tyler said.

That just irritated me. And why not? I wanted to ask. The biggest screwings I’ve ever gotten was when some salespuke spent a bunch of time feeling me up to see how big by wallet was. The biggest biggest screwings of all time were from companies that didn’t have any published pricing. Every “deal” custom. Which means “each deal engineered for maximum screwing.” This was just SaaS. It should have a price sheet. A public price sheet.

Tyler saw my irritation. “But you have to admit the demo looked good!”

“If anyone actually uses it.”

“Dude, it’s waaaayyyyy easier than what we have now. Why wouldn’t they use it?”

I just shook my head. It wasn’t time for a story about how, back at Centric, we once had a complete project management system custom-coded to exactly our specifications, and everyone loved it, because it did only what we needed and nothing more. Looking back on it, it was really a driver of Centric’s salad days. Over time, though, the system got slow, new people came in and wanted to put their stamp on it, and some new canned project management systems started looking pretty good. So we tried them. We even deployed two of them. Everyone spent 80% of their time bitching about how they were different than what they were used to. In short order, nobody used them. We were soon left with inefficient, manual project management systems (and, ironically, the old system never really died, we kept it limping along to do searches on old projects.)

“Well, they’ll get back to us soon, and we’ll see,” Tyler said.

“We’ll see how much they wanna screw us.”

“You’re just too cynical,” Tyler shot back.

I sighed. “I’m Rick, not Morty. I’m realistic.”

“I thought you were Willie Wonka,” Tyler said.

“Wonka never got threatening letters from a customer, or a federal lawsuit for making children fat,” I told him.

“Well, we’ll see,” Tyler said.

And we did. That same day, they sent us an email asking for fourteen business metrics, all couched in unexplained acronyms, and none of which I figured were any of their damn business, I wasn’t surprised.

I was done with stupid. All I wanted was a price for their friggin service.

So I sent them a one-line email:

“What are these acronyms, and why do they matter? Give us pricing or we are out.”

I copied Tyler. Tyler sent them a similar email, about 10 times longer, couched in Victorian/Captain-Of-The-Debate-Team rhetoric.

They flipped, of course.

They emailed.

They called.

They wanted to explain.

Yeah, explain why you’re a bunch of salesy assholes who want to know 100 things about our business that have no bearing on price, I thought, and didn’t respond.

And that, my friends, is how we got introduced to the modern world of online commerce platforms, a saga which quickly became “The E-Commerce Shakedown” in my mind.

And it’s how I remembered how much I hate salespeople.


Don’t Blame Tyler

Tyler is well-meaning. But Tyler has never developed and launched a large website, let alone torn apart and re-done an established, operating e-commerce site, which should give pretty much anyone the vapors.

Centric, however, had developed and launched many websites, from simple company profiles to the world’s first online leasing site, to e-commerce, to a virtual world for children, to online product configurators, to…hell, you name it, we’ve probably done it. So I knew how it was gonna go, as soon as Tyler and Alex decided that We Should Look At Our E-Commerce Platform and See If We Can Make It Better.

To summarize, here’s how pretty much any website project will go:
  1. It’ll take way longer than you expect.
  2. It’ll introduce you to new and exciting bills.
  3. It’ll break quite a bit, and in really bizarre ways.
  4. It’ll cause everyone you work with to complain about how it has changed.
  5. It’ll make all your customers complain about how it has changed.
Or at least this is how it feels. With proper planning, you should be able to get some meaningful and helpful changes in place.

But to think it can be done seamlessly…oh ho ho!

Or to imagine it can be done without teeth-gnashing and histrionics…yeah, you’re hilarious.

Or to get the idea that you can simply pound the table and make it work…nah, nevergonnahappen.com.

“So why are you guys thinking about re-developing your site?” someone finally asks.

Great question. Especially when probably 80% of the sites Centric developed were because the company was bored with them, not because they needed any additional functionality.

Stop. Go back and read that. Because they were bored.

Do I need to even say this? Yes. Maybe. So here it is: this is not a good reason to change your site.

In our case, we were frustrated with what seemed like some dicey integration issues, and we were hoping to bring some more functionality to the back end of the site. To summarize:
  1. Our current website ordering system was 100% manual. It didn’t integrate with anything that allowed batch processing, like ShipStation. Doesn’t sound like much? As order volume increases this quickly turns from a “nice to have” to a “we really need this.”
  2. Also, the site didn’t integrate with Fishbowl, our inventory system. See above. It had long since gone past “nice to have” in this case.
  3. Ranking of orders for fraud red flags was 100% manual, it would be nice to have an automated ranking system (that didn’t cost 1% of your revenue—not kidding, more on this later.)
  4. Visibility of customer history was, well, kinda invisible. It’s nice to see someone’s order history when trying to work out how best to solve a problem.
On the front end, I also wanted to do a couple of things:
  1. Allow better sorting and display of products. This wouldn’t mean changing the default display, which has been tweaked and tested and works very well, but allowing customers to sort and choose products, product stacks, and product groups in different ways (cost, type, comparison, etc) would be nice.
  2. Bring in “also purchased with,” in a non-intrusive way. Now, before you tell me how I am satan incarnate and a representative of the evil salesman class I hate so much, I was NOT thinking of doing anything in the cart. It would be more of a “a lot of people buy a Modi to go with their Magni,” kind of thing, with an explanation why. And even then, I might decide I didn’t like it, that it was too pushy.
So yeah, a bunch of things on the back end to improve our processes, and maybe a couple of things on the front end. These are the things that started us looking at kinda-sorta, maybe like, just maybe, changing the e-commerce platform we were on.

“Sounds kinda basic,” you might say. “Like, not enough to change the whole site over.”

And yeah, I hear you. I even said that exact thing.

But Tyler and Alex thought we should have a look. Our current site is 100% custom-coded and maintained by a single guy. Alex complained that our guy hadn’t always been able to hit the mark on site additions, even if he was responsive. Tyler brought up the “what if he decides to stop supporting the site,” scenario.

The former complaint—not hitting the mark—I had to push back on. “Did you ever give our guy a functional requirements document?”

“What’s a functional requirements document?” Alex asked.

“How about wireframes?” I asked.

“No,” Alex admitted

“Pencil sketches of what you want?” I continued.

Alex shook his head.

Yeah. And there you go. With no guidance, he’s gonna miss the mark. It was actually amazing how close he’d come, so many times. And he always ended up getting us there.

But the “what if he doesn’t want to do this anymore,” I didn’t have a good answer for. Because that was a real problem, if it happened. And even if our guy had always been upfront, and wouldn’t want to leave us hanging, unexpected schiit happens.

So I agreed to talk to a few of the leading e-commerce platforms.


Shiny Shiny

Now, if you’re browsing the sites of most e-commerce platforms these days, they look pretty good. Shopify, BigCommerce, Magento…they all promise the moon and have relatively inexpensive per-month fees. They say they’ll take care of everything, order processing and security and fraud and integration with your other systems and you can build pages in seconds and get a billion orders a day.

Except…look closer.

Hmm, what’s that about “Enterprise?”

And what’s that about “contact us for pricing?”

Yeah. Each and every one of these platforms is a roach motel. Roaches check in, but they don’t check out.

As in, it’s dead easy to get started on any one of these platforms, if you’re just starting to sell online. Any one of them can get you up and running quickly (albeit with a site that looks like every other long-scrolling, graphics-heavy monstrosity out there). Any one of them will handle your orders, credit card processing, and most of what you need to start selling.

And then, with, say, BigCommerce, as soon as you hit $400,000 a year in sales, you’re “Enterprise.” Which means you then get assigned an account rep (sales puke) who will help you maximize your business (extract more money from you.)

Oh, you want to leave? I don’t know how easy it is to get your data out, but I know I don’t want to find out.

But anyway, back to us. We were not a startup. We were an established, operating business. Which makes the stakes way, way higher.
  • What happens if the site goes down in transition?
  • What happens if the site doesn’t work the way you wanted it to?
  • What happens if the customers don’t like the new site, even if it’s supposed to be better?
  • What if they don’t like it, even if it’s supposed to be the same?
  • How painful is it to get historical data in?
  • How much worse is it to get it out?
So yeah, there’s a lot of potential eek there.

And then you start talking to them. And the eek gets bigger.

In our first conversation with our first e-commerce platform, they were totally up-front about it being a sniff test. As in, “We’ll talk to you and then we’ll see if we will pass you along to an account rep.”

That didn’t feel good, but I tolerated it. To establish some credibility, we gave them a rough idea of the amount of orders, and the amount of business, we did. We also asked them for ballpark pricing.

Which they declined. Flat. “We have to get a better idea of your business before we can do that,” they told me.

That didn’t sit well with me, but hey, maybe it’s just a thing. I decided to go along, though my salesperson bullshittometer had started to twitch.

But when we got to the second call, and the demo, the red flags really started popping up.

“I see we can integrate our Amazon listings as well,” I said, because if we could manage the site and Amazon from a single interface, that would be a plus.

“How much do you do on Amazon?” they asked.

I told them. “We’re also in the Brand Registry, and on our way to Seller Fulfilled Prime. We’re also deploying A+ Content.”

Silence for a while. Then: “You should probably stick to managing your Amazon presence on Amazon.”

Hmm.

Tyler asked about Shipstation, and that opened another can of worms.

“Yes, we can integrate with Shipstation, they are one of our best-in-class partners. We’re really focused on bringing together best-in-class solutions for all of your e-commerce needs,” they told us in that impossibly chirpy voice only the best salesdroids can manage.

“They aren’t yours?” I asked. Growth through integration could be a whole big bag of worms.

“No, they are our partners. From our special rate through PayPal for processing—”

“—which is higher than our current rate,” I reminded them.

“Actually, it’s a bit less, Tyler said, “If you factor in the lower rate for American Express cards.”

“Oh, that’s good,” I said. Finally something positive.

Unfortunately, they continued talking (or maybe they never stopped), “—and we have partners that can reduce your fraud burden—”

“Wait a sec!” I interrupted. “That isn’t included?”

“No, but I can include that in your quote.”

Argh. We’d talked to fraud prevention guys before. It’s not fraud prevention, it’s an insurance/bookie service (same thing), that screens your stuff and takes the risk.

For 1% of all transactions.

Go back and read that again.

Doesn’t sound like much? Oh, to live in your world.

Here’s the reality: when you start adding all the fees up, they get really big, really fast. Remember, these numbers come straight off the net, not the gross:
  • 2.2% for credit card processing (a decent blended rate)
  • 1% for fraud
  • 0.5% for platform (typical of ecommerce, no matter what they tell you
And let’s say you have a great year and your net is 10% (not atypical). You want to take nearly 40% of your profit and spend it on processing and fraud and platform and integration? Really?

Yeah, thought so.

And this is why I have a bit of a laugh when I’m told we’re raking in the money on $150 Unison USB upgrades (not kidding). From the outside, it’s easy to look at cost of parts and say, “Wow, I can build that cheaper.”

Yes. And you should. Everyone should do DIY. It’s fun.

Unfortunately, it has limited congruence with business. To have a stable, long-term business, you’re gonna get a firsthand schooling in what “cash flow” actually means. As in, you watch the cash flow past you as it goes to:
  • Parts purchasing, including bulk big-ticket stuff like chassis, transformers, and boards.
  • Salaries, especially if you’re making stuff in the USA. And especially if you’re like us and starting at well over minimum wage. And remember, you’re not just talking about staff for building stuff, you’re talking about testing and packing and shipping and repairs and engineering.
  • Salary co-pays for taxes and insurance (one of our employees was floored to find out we matched his contribution to Social Security and Medicare)
  • Facilities cost (rent, fixtures, repairs, heating, cooling, etc)
  • Compliance testing
  • Equipment purchases
  • Insurance for facilities, staff, and product liability
  • Credit card processing, fraud, and platform fees
  • State, local, and federal taxes
  • The huge new burden of sales tax. We have to report and pay sales tax to virtually all states, some with many sales tax rates and jurisdictions.
Sounds terrible? Nope! I really love what we do. I’m just realistic about it.

“So what do I do if I want to not get screwed by e-commerce fees?” you might ask.

Great question. That’s the main reason I wrote this chapter. I figured if we was gettin a schoolin, then maybe you’d like to get one too.


How To Get Into E-Commerce (Without Losing Your Shirt)

Okay, so let’s start by clearing up a few things. In the chapter above, I used terms like “fully custom” and “e-commerce platform,” but let me give you a lay of the land.

In e-commerce, you basically have three choices:

  1. Use a hosted platform to make things easi(er). Hosted platforms include SquareSpace, Shopify, and BigCommerce. Platforms allow you to build a commerce site and start selling things pretty easily, and handle a lot of the back-end work for you, like credit card processing. They also typically take the burden of security off your hands.
  2. Build it yourself from an open-source platform. Open-source platforms include Magento Community, Drupal Commerce, and WooCommerce. Cheap? Like living dangerously? Or are you techy and can keep up with security patches and new versions? If so, you may want to go this route, because the price starts at free. Of course, you’ll have to set up and maintain a host, and if someone pierces your security, you’re boned.
  3. Build it yourself, fully custom, from the ground up. Are you insane? Yes? Then this can be a great option, because you will get only what you need, tailored exactly to how you work. You’ll also have some security through obscurity, but don’t think security is automatically “handled.” This is how Schiit does it currently.
“Well, hell, it sounds like nobody would choose anything other than a hosted platform, unless they are complete nutters,” you say.

And it can seem that way. When you’re starting out, these kinds of services can be very appealing, and can shield you from a lot of business foibles. When you’re more established, though, the costs can get to the point where going with an open-source platform or something fully custom can be attractive.

Plus, to make things more confusing, different platforms offer different pluses and minuses. So, let’s take a deeper look at the hosted options I mentioned before:
  • SquareSpace. Probably the easiest way to get started, but has very limited customization. No fees other than their monthly vig that is published on their site, so it’s super cheap. Not really ready for enterprise-level stuff, but it’s a great way to get selling fast.
  • Shopify. Much more sales-oriented and with many more e-commerce options, including a dedicated enterprise offering (Shopify Plus). They run your payment processing (eek) and take a vig on anything not run through their gateway (like PayPal). Also, they are still limited in terms of customization. If you want an interface that doesn’t look like a bad rip-off of the Apple Store, then best to look elsewhere.
  • BigCommerce. It is what is says. Much more oriented towards enterprise, though they allow you to build a site and get started fast (just beware, you’ll be pushed into the Enterprise funnel when your sales go over $400K per year). Completely customizable interface…but I’d beware of development costs and upkeep.
I also mentioned Magento, which is now owned by Adobe, and has both self-hosted, open-source (free) versions, and Enterprise versions. This shows pretty much how the system works. If you want to do the work yourself, it’s cheap. If you want someone to hold your hand, host the site, etc, then prices get big fast. This might be a fun option for someone who is more tech savvy, because you could literally start for free, then move up to Enterprise if you find you need the option in the future.

Now, this is not intended to be an exhaustive survey. If you’re looking at selling online, I highly recommend you do your own research, ask pointed questions, and, above all, be difficult.

“Be difficult?” you ask. “What does that mean.”

I mean this:

  • Call them on their salesperson BS and sales-y vibe (if they have one) and ask for a technical contact, if you’re more technical.
  • Refuse to give them your shirt size, fingerprint, Google Home recordings, Alexa request log, and all the other stupid things they will ask you for (actually, they’re gonna want to know sales, order value, number of orders, etc—your answer should be “none of your friggin business, give me pricing”)
  • Keep your options open. Don’t get too enamored of a canned demo, because it’s very easy to show something shiny that (a) won’t work as well as it seems, or (b) people won’t like to use. Keep talking to companies until you find one you like.
  • See how hard it will be to get your data in. This may be as simple as “use our sitebuilder,” if you’re just getting started, or navigating the realities of importing a few hundred thousand orders and thousands of custom SKUs (different product variations).
  • See how long the contracts are, and what gotchas might getcha. What happens if your magic new platform decides to go public and raises prices 2x-4x in order to make their revenue look good? Yeah, make sure you’re not stuck in that roach motel.
  • Find out just how hard it might be to get your data out. It’s gonna be a lot harder to do this, but it’s worth an ask—up to and including asking for examples of companies that have bailed, or asking one of their developer partners (frequently independent, like Centric) about any experience they may have with migration
  • Beware hidden costs. Yeah, they have partners for processing and shipping and Amazoning and De-Frauding and promotions and sales and 10 other things, but are they included, or do you pay for them? What’s the cost to transition your site.
  • If you’re gonna live and die by ecommerce, make sure they show you examples of companies that live and die by ecommerce. Ecommerce platforms LUURRRVE to show you examples of big brands. The bigger the better. Problem is, New Balance or Skullcandy don’t give no craps about ecommerce if they have eight thousand stores you can buy their stuff at. If their ecommerce site goes down, it’s a drop in the bucket. If you’re planning on doing direct sale, make sure they can handle something where ecommerce is the store, and it can’t go down.
  • Never ever ever plan for something that hasn’t happened. Expect that the transition will be difficult, and that your new site may go down. Don’t stop improving your current site, and be ready to fall back if you need to.
So what are we doing at Schiit?

As usual, following our own advice. We’re starting a round of much-needed updates to the current custom platform, and exploring other platform options. As of yesterday, we just got our site talking to ShipStation, and as of today, we fixed it so it was showing all orders (we think). When we’re confident the interface is solid, this will dramatically speed up order processing, and pave the way for automated scoring of fraud risk (based on our own algorithm, thank you, bite me you damn bookies). Next step will be Fishbowl integration, and then we’ll start looking at some UI tweaks. If everything works well, we may not need to change platforms at all.

But, at the same time, we’re also talking to some of the hosted platforms. Because it’s time to see what’s out there, and what we might be missing. We haven’t found anything super-exciting yet, but we’ll see.

And the sales-y platform that we told to give us pricing or we’re out? They gave us pricing. It’s not ruinous, but we were up-front with them about how their supadry supasalesy vibe boned them out of an easy deal. We told them that we were now looking at multiple platforms, that the evaluation period would be long and competitive, and if they wanted to throw their hat in the ring, they’d start showing us some examples of sites that live and die by ecommerce.

To their credit, they did everything they could to salvage the relationship, apologizing for their approach and giving us the examples we asked for.

But we’ll see. I’m not counting out any approach yet. If we can tweak the site to where we want it to be, we’ll probably keep going down that path. But who knows? We already talked to another platform today that was much more forthcoming on price…and more positive about keeping everything we want intact…and was much cheaper.

In any case, I hope you enjoyed this glimpse into the world of e-commerce—a much more sales-y and corporate sphere than I would have guessed.
Mo' money, mo' problems.
 
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There are companies like Etymotic who make flanged plugs that reduce all frequencies by about 10-15 decibels and work much better than the typical foam plugs.
I have musicians in the family and they really seem to like Eargasm Earplugs. I don't do concerts anymore or I'd give them a try...
 
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Ahh, business software nighmares. Going worse by the day
 
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SaaS is the worst. A few years ago, we spent a lot of money putting in a new integrated workflow and scheduling application, Then we found out that by "integrated" they just meant you can view them both on the same interface. The two systems didn't actually talk to each other, and they were surprised that we would want our resource scheduling to be driven by both long- and short-range availability. It's fixed now, but that was a lesson learned - onscreen demos are next to useless, and hands-on demos are only slightly better. You need to ask lots of questions, even ones that seem like no-brainers.
Yeah, I really thought it would be more worked out than it is, or at least to have transparent, easily understandable pricing. Instead, it felt more like a back-of-the-van high-pressure sales pitch.

Maybe I've been doing Schiit for so long that I think every business works the way we do. The e-commerce thing was a real wake-up call. We also had a pretty hilarious conversation a few minutes ago with Google, where they asked Rina what her title was. We looked at each other blankly and asked, "Wait, what was it I called you, besides 'Paddle?' (as in, we're up Schiit creek without one)."

We then had to explain to Google that we don't really have much in the way of titles here, that mine is actually "Head", as in "Schiithead." I think we finally remembered that we were calling Rina the "E-Commerce Channel Manager," which seemed to go over just fine.

Then we had to explain why we called one of our campaigns "Google Shopping Dumb." (Because they have "Smart" campaigns, ours was manual, therefore, to us, "Dumb."

I expect most of the corporate types we talk to think we're totally barking mad.
 
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I expect most of the corporate types we talk to think we're totally barking mad.
And that's just awesome in my book. Don't stop the music! Keep on truckin! And so on...
 
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Yeah, I really thought it would be more worked out than it is, or at least to have transparent, easily understandable pricing. Instead, it felt more like a back-of-the-van high-pressure sales pitch.

Maybe I've been doing Schiit for so long that I think every business works the way we do. The e-commerce thing was a real wake-up call. We also had a pretty hilarious conversation a few minutes ago with Google, where they asked Rina what her title was. We looked at each other blankly and asked, "Wait, what was it I called you, besides 'Paddle?' (as in, we're up Schiit creek without one)."

We then had to explain to Google that we don't really have much in the way of titles here, that mine is actually "Head", as in "Schiithead." I think we finally remembered that we were calling Rina the "E-Commerce Channel Manager," which seemed to go over just fine.

Then we had to explain why we called one of our campaigns "Google Shopping Dumb." (Because they have "Smart" campaigns, ours was manual, therefore, to us, "Dumb."

I expect most of the corporate types we talk to think we're totally barking mad.
LOL! Dee Light Full :)
 
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I have musicians in the family and they really seem to like Eargasm Earplugs. I don't do concerts anymore or I'd give them a try...
FWIW, they seem to be available cheaper through Amazon than direct from the company's website. (https://www.amazon.com/Eargasm-Musicians-Motorcycles-Sensitivity-Conditions/dp/B075SJ3Y8M )

Looks like a nice modernization of the classic Etymotic "Musicians Earplugs" I used to carry around in my pocket in their little plastic case when I was still young enough to attend concerts. They're probably the only reason I still have half-way decent hearing, other than some age-induced loss of high-frequency, and very minor tinnitus.
 
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Looks like a nice modernization of the classic Etymotic "Musicians Earplugs" I used to carry around in my pocket in their little plastic case when I was still young enough to attend concerts. They're probably the only reason I still have half-way decent hearing, other than some age-induced loss of high-frequency, and very minor tinnitus.
Speaking of which, I have used a model very similar to this one at the last concert I've been to (Mark Knopfler, way louder than I was expecting by the way).
It's actually good stuff, for that price.

I don't think I'll do another concert without earplugs
 

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