Bart Mroz | Half the Sales, Double the Profit

Unstoppable CEOPodcast

Building an eCommerce business can be complex, especially with all the fancy marketing strategies out there. But if you don’t have a solid basic foundation, you’ll never really realize the full potential of your business, says Bart Mroz of eCommerce consulting firm SUMO Heavy.

What does Bart look at first when working with a business?  

Things like shipping, payment systems, taxes and other factors that impact your profit margin, which he views as the most important metric to gauge your business success. Get that in order and even a small eCommerce company can compete with Amazon. 

We talk about all the elements that impact your margins, as well as… 

  • Why being efficient isn’t about “going fast”
  • How to take break your entire business down into systems – and keep it running
  • The power of continuous improvement
  • The only way to figure out what’s working – and what’s not – in your business
  • And more

Listen now…

Mentioned in this episode:

Transcript

Adam Lean: Welcome to P is for Profit, a podcast that breaks down business concepts and just simple and clear language. This season is dedicated to interviewing eCommerce experts that can help you improve your eCommerce business. I recently had the pleasure of interviewing the founder of an eCommerce consulting firm.

My guest owns SumoHeavy.com, which is a boutique eCommerce consulting firm. They essentially help eCommerce businesses create processes and systems that just work. So why does this matter? So regardless, if you own an eCommerce business, or a brick and mortar business, you’ve got to create systems. If everything in your business revolves around you, the business owner, you don’t really have a business, unfortunately, you just have a job. And not only do you have a job, but you also have a job that you’re a slave to. You can only make more money if you’re working more hours, unfortunately. So this is the problem. You only have 24 hours in the day. So you’ve got to create systems and processes in your business so that the business can be run by other people, people in your team independently of you, especially if you want to take a vacation, and especially if you ever want to sell your business one day. So let’s jump into the interview with Bart and talk about how he helps businesses create these processes and systems.

Bart, welcome to the show.

Bart Mroz: Oh, thank you for having me.

Adam Lean: Yeah, so Bart, you are the CEO of Sumoheavy.com, which is a boutique eCommerce consulting firm, and you essentially help build successful brands online. So tell me how you got here. What’s your story? And why did you start this?

What Is Sumo Heavy? 

Bart: This is actually… I fell into it. Crazy enough. This is my sixth company. So I had an agency before this at consulting firms. I’ve been doing this for on my own for about 16 years now. My current business partner is sort of came from the eCommerce world. And he loved it so much that I kind of fell in love with the two. So it’s kind of a roundabout way to get into the business. But for me, it’s more we started an agency that was very, I always wanted something specific. So it’s a target towards eCommerce. Obviously, we’re a little more broad with strategy and consulting now and development work. But it’s all about eCommerce for us.

Adam: So just curious, what world did you come from before, before you started this company?

Bart: Heavy technical networking, so that’s to do networking for building networks, and you know, cabling, you know, that kind of thing, routers and things that for credit unions and banks. So I come sort of from that world more than anything else. And then just started a consulting firm, just because they just, I did not want to work for somebody else. So for me, it was more of I want to work for me, met my business partner, and that just kind of married it really well. So he’s the lot more technical side of the company and more the business side of the company.

Adam: You know, I mentioned earlier that you build successful brands. So what does that mean?

Bart: So we work with two different kinds of clients, sort of the bigger stuff is big corporate clients that we can help staff augment, help them with the process, help them get in there and sort of be like, a little bit of a SWAT team when they need help.

On the other side of that we work with smaller brands, we’ve helped clients, you know, sort of customers, to start from the ground up to build pretty huge companies multiple have sold over the years, and building from small to bigger, it for us, it’s more about helping clients and their teams internally, go through a process and, and really, really go deep dive sort of deep dive with them. Because for us, it’s not just about building, you know, building a store for them, and just letting it go for us is there to help them through the process and, and putting them in the best foot forward type of thing.

Adam: So working with the smaller eCommerce clients, what, in your experience, do you believe makes some of them succeed while others struggle? Like why is there something that the successful eCommerce people have that others don’t?

Why Do Some eCommerce Businesses Succeed While Others Fail?

Bart: I think overall, it’s understanding that eCommerce is very, very complex, from shipping to payments to anything else. And I think, especially when you’re starting out, understanding some of the basics of eCommerce is very important. That’s how you have to hire internally, you can hire consulting firms like ours, and help you through that. But I think understanding every piece of it, at some level is where people need to go. Because if you’re you’re my example, I always use like, if you sell $100 t-shirt, and I saw $100 t-shirt, but it takes me $50 to sell it and that takes you $100 I well, who wins on this, right, you’re selling the same product. But your margins are different. So understanding every piece of it because the margins, you know, you’re selling a T-shirt, but that margin has to go to your shipping your payments, your you know, sort of customer service, it has to have all those things. So I think understanding everything. So what you do is very important.

Adam: So what are some of the basics that business owners sometimes forget when you start working with them? What are some things that you just want to have to go back to the basics and figure out?

Bart: Yeah, I think for us, when we look at it, a lot of times, small companies will try to just build to build overly quickly, right, without thinking about the process, which is important. We understand that you know, in when it comes to software, you can just build it and try to do it fast. But when it comes to Ecom, like the processes there, you just got to be mindful of it. And that’s looking at shipping payments, taxes. Every little detail is important because in this day and world is starting a new eCommerce or being small and competing with you know, the giants like Amazon is kind of tough. So having everything kind of squared away is important. And then also will, you know, say payments are shipping, I keep on bringing that out because we’ve seen it over and over people just make mistakes on those things and just really, really get screwed on it. And especially when you’re small that’s a big deal.

Adam: Yeah, I mean, you brought up a good point earlier. You know, it reminded me of the quote when you mentioned the T-shirts selling one seller selling t-shirts for one price, but they’re making a completely different profit margin. And reminds me of the quote by Robert Kiyosaki, it doesn’t matter how much you make, it matters how much you keep, you know, sales of the making part profits, the keeping party end of the day, you have to build in these processes and the systems so that you can keep it as much of that sale as possible.

Bart: Well, I mean, it’s kind of like Mark Cuban going “sales fix all” true, but you also gotta, you know, keep a lot of it, too.

Adam: Right. I mean, that’s the definition of profit margin, you want to keep as much of that 100% margin as possible. Yep. So what is the biggest mistake that people make that hinders them from making as much as a profit margin? Did you mention shipping?

What Hinders A Good Profit Margin?

Bart: Shipping and taxes. You know, your payment systems, making sure your you’re not overdoing it. I mean, shipping itself is, is tricky, right? Because dimensional weight or how you’re shipping it is the most cost-effective Are you shipping, you know, places, and things, you know, in this day and age, things are changing in this sort of 3PL or third-party logistics type of places.

I think Shopify just announced they’re putting in their sort of 3PL type things. And I was actually at the conference. And that was a cool one because you basically can select your product in the admin, and then they’ll, you know, they’ll give you a price for it. And then you ship it to them. And then they can do distribution all over the country. Which is, which is interesting how they’re, they’re getting into that, because Amazon pretty much has everybody be on the, you know, set of first-day delivery, it’s kind of crazy how they do it. But they have the scale to do that. Right.

And if you we work with a client that did 24-hour delivery, no matter when you’re ordered. So imagine that you know, you can’t really do FedEx on Friday night, but you can also do USPS on Friday night, you know, like that whole sort of gamut of what you do is important, because you will lose your shirt that way.

Adam: Yeah, and I completely agree with you.

Bart: So the biggest mistakes, it’s like just understanding your profit margin and where it’s coming from, and then looking at, you know, every part of that business, from taxes to shipping to technology to where can you, you know, be more efficient in your product?

Adam: Yeah, I mean, I completely agree with you, you have to be able to look at and break down every part of your business model so that you can understand where, you know, what, what’s hurting you from increasing your profit margin. And of course, sales are important. Speaking of sales, how can independent eCommerce businesses compete with Amazon where, they, you know, you know, the lowest prices came?

Bart: Oh, it’s always the lowest price. It’s its convenience, right? Including me, I’ll search on Amazon first, right? Or I’ll search for something and then look at what Amazon has if I have to wait for a, you know, five days for delivery from a place or Amazon delivers the next day the same product. And that makes it easy, right? 

So for me, when you’re small, it really depends on some retailers and a small side, they’re like no Amazon, no Amazon, no Amazon, but Amazon now that you can integrate your products in it’s not a bad marketplace to go after, right? Because it will deliver some of your brands. Like the idea to put your stuff on Amazon right now is, in my opinion, is all about branding. It’s putting it up there. It’s being known, it’s doing the searches, like the search feature, or advertising features in Amazon are so good now that, you know, it’s a competition.

Adam: So does that disqualify people that want to do dropshipping? I mean, control the brand? 

Bart: I mean, they can really control the brand. But Amazon, I mean, I mean, you can do dropshipping from Amazon, too. So it’s definitely integration point. But I do know, some retailers are just refusing to give any money to Amazon and try to compete on it. And sometimes that works.

I mean, the other you know, there are a few different versions of this. One of them is also if you have a new product that’s inventive and stuff like that, and you put an Amazon, people do rip it off, you know, this was a dollar per often try to sort of, you know, get that market from you. And that’s hard. That’s hard for any sort of retailer.

Adam: What is the most important thing that eCommerce business owners if, you know if you had to sort of rank the most important thing that they should work on? An article focused on to improve what would that be?

Bart: Your profit margin.

Adam: Completely.

Bart: And that comes from like I said, it just the same discussion over and over. It’s, it’s comes from every single thing. I think, I think having a great product, having good people that work with you, would it be internal will be consulting firms that give you the best advice and know their sort of knowledge base of where they are, is key. And know, like I said, knowing your profit margin really, and trying to increase that as much as you can? Because otherwise, it just, that’s just pointless. So if selling products, if you’re not, you don’t have any profit margin, or it’s too low.

Adam: Totally. I mean, there are tons of tons of people that brag about having six or seven-figure businesses, but that’s really just referring to their top-line sales.

Bart: Yeah, if your top line is, you know, there’s $30 million, but you’re spending 29 and a half of it. It just makes no sense.

Adam: Totally, and you’re just adding a lot of complexity and stress to make that when you can cut your business in half and still make probably more than that.

Bart: Yeah, I mean, if you’re if your profit margin on 30 million is only, you know, 3%. But if you say you slow down and cut your top line by half, and all of a sudden becomes 15%. And that’s a huge difference.

Adam: So where do you see commerce going? The next, say, three to five years.

Where Is eCommerce Headed?

Bart: I think it’s an exciting time, I think the last 10 years has been exciting. Before that, it was all about big, huge systems and custom builds. In the last 10 years, obviously, all these new systems came out, including small ones that became big, you know, Magento, Shopify, big commerce, all those guys just kind of exploded on the scene.

I think the next frontier is going to be retail is interesting at the moment, because physical retail is having a change. You know, from obviously, Toys R Us going down Sears and stuff like that, all of a sudden, Toys R Us is rethinking it somebody’s trying to start new stores again, which is in itself funny. And then you know, things like voice and text messaging and new ways of shopping. Obviously mobile is very important. I think the proliferation of just, you know, like calling it all eCommerce, but it’s commerce across the board. So whatever, whatever the experience you have in store also is online, whatever is online… in-store has that thing. And I think quicker shipping and just being able to just basically buy things, wherever you are. I think the voice is gonna be huge in that realm. It’s not there yet, but I think it’s going to be.

Adam: It kind of goes back to what you were saying earlier about convenience, which is why Amazon wins. So yep.

Bart: And with Alexa’s and Alexa’s being you know, so perfect. I mean, these guys give away their sort of their devices. And you know, they’re trying that now a little bit, right, where you go, like, border me this and still go through your phone. But I think eventually it’s going to be whatever the likes and not likes you have, we’re going to be just there. Right? So the funny one is always like I’m in the bathroom, we’re just running out of toilet paper, and I say to the Alexa order me more toilet paper, and it shows up that day, is then that’s where it’s going to go and it shows up in an hour, right, or whatever that is. I think that’s the that’s where it’s going to go. And it’s going that way. It’s just still slow, obviously, because it’s it needs to be like privacy, obviously, is always a concern. But I don’t think in that world is it’s just people just going to be they’ll give up privacy over convenience.

Adam: Totally. We’ve already experienced that. Right. So what’s the most exciting thing happening in eCommerce or just in tech in general, that you that you’re excited about? What’s happening right now?

Bart: I think, wow. So doing a podcast daily and having us and stuff like that we talked about obviously, Amazon a lot, but I’m kind of excited about looking at how drones deliver things to rural areas. That’s kind of fun. But also obviously voice is big, like we just talked about, I think delivery overall is interesting to me. Because fewer people going to stores and shopping and more online. That means delivery has to happen somehow, right? For me also, the idea of there’s few new things that are coming up for packaging, just because of how many boxes you get, like I always wonder all these Amazon boxes, how are they recycle? How are they recycle? Because they’re not you know, they’re heavy-duty boxes sometimes. And then I think that’s where some of the frontiers are going to go. And then changes are going to happen.

Adam: Yeah, I completely agree. Where do you get your news or insights or trends into eCommerce?

Bart: ecommercemedia.com, our own podcast. Yeah, I’m just kidding.

I just you know what, it’s when you do this for a living, you kind of pay attention to tech news. And, you know, you kind of have a newsreader, tune into all the eCommerce news. plus all the conferences you go to, that’s always kind of on top of mind and where the world was going. Plus, being partners are some of the technology companies, it’s easy to get some of their stuff and what they’re doing and, and then just people like you were just talking to them.

Adam: Okay, yeah. So, tell me something that’s true. That almost nobody agrees with you on?

Bart: That’s a hard one. Sure, nobody agrees with me. Ah, I got nothin. Wow, that’s a hard question there.

Adam: I mean, I do think that we sort of touched on something earlier that a lot of people don’t necessarily agree a sales is not the end all be all. It’s what you bring home with cash, the cash flow that you can, that you can keep what really matters?

Bart: Yeah, the other one is we see this all the time with clients, we are very processed, focused very, very strict on it. Because we think the process is efficient and not just go fast type of thing, like go fast and break things were like, go fast, but don’t break stuff and use process for that. Because there’s a way, you know, way to do that better.

Adam: Absolutely. I mean, it’s all about system, you know, taking your business, and from what I’m hearing if I’m hearing you correctly, taking your entire business, all the way from marketing all the way through fulfilment, and breaking it down into systems, and measuring each part of the system to make sure that it’s optimized. How do you monitor each part of the system? How do you track that?

Bart: We do we actually, we kind of do what we preach internally. So our systems are very, very well set up. For most, I mean, a lot of development work, obviously, because that’s just what we have to deliver. But it’s definitely systems that we have dashboards, we continue to have continuous improvement things that we do with our clients, and internal. So we work on the system almost every single day to improve the internal process of our client’s process. So it’s not just come out in the bubble type of thing. But it’s definitely improving with the client.

Adam: Yeah, I mean, we do the very, very similar thing from a financial standpoint. You have to, I mean, you have to be able to know what’s working, what’s not working. Because that’s how you’re going to get a leg up on the competition. That is correct. Well, well, Bart, how can people find you?

Bart: Sumoheavy.com, and then on the socials were Sumo Heavy on every social, I think. And then we actually do two different podcasts. One of them is eCommerce minute. The other one is not out yet. But it’s called In The Ring with Sumo Heavy, it’s going to be our longer podcast, it’s gonna be pretty fun. But eCommerce minute runs five days a week. Quick one, short stories about news and what’s going on in eCommerce world in tech.

Adam: Okay, and what’s the what’s in the ring? You said it’s going to be more of a long format.

Bart: Yeah, it’s a longer format. It’s a it’s going to be partly interviews with retailers and service providers. But it’s also some of the internal things that we do, some news is trying to make it more of a channel news type of a radio show than anything else. That’s a longer format. It just depends what’s going on that week, what we can do. Trying to be more proactive and in doing longer things and just 10-minute type of news stories.

Adam: Got it? Okay. We’ll put it we’ll definitely put the commerce in the show notes as well as Sumoheavy.com. Bart, thank you so much for coming on the day. This is very, very informative.

Bart: Thank you so much, Adam.