1795 – Sales & Customer Success with Oz Merchant of Viably

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0:58with us right now it's oz merchant oz you are the vp of sales and success at viably you're on the web at run viably.com oz thank you so much for joining us yes so much uh pleasure to be here i really appreciate having me on absolutely well okay so give us the overview of what viably is sure happy to so viably is a platform we built out actually over the last year or so and really focusing in on banking and funding for e-commerce sellers so whether you're selling on amazon walmart ebay shopify you're basically you know you're selling online you've got products to sell part of that challenge and part of that journey is you need to buy inventory and you know traditional banks don't know how to underwrite e-commerce sellers.

1:52There's not a property collateralized or to have a mortgage against. There's no equipment. That's their whole model is give us something that's a tangible asset. In the e-commerce world, there's nothing other than the product they're selling. So coming from a technical background, coming from the SaaS cloud world, we understood that because we were in the same challenges at previous companies. Like, okay, traditional banks don't know how to underwrite that type of business. So for us to, when we were launching and building out Viably, the focus was, okay, there's a banking offering. We need kind of the basic banking fundamentals, but then you also need to be able to underwrite that e-commerce type business, which is very uniquely different than the brick and mortar.

2:37So from there, we also started building out a cashflow management and forecasting tool. So how do you know when you're going to need capital? How do you kind of start planning better and get more strategic about leveraging capital when you need it, rather than just to have capital for the sake of capital? Basically, can you actually get money so that your dollar is actually working for you, so that you're getting a return on that capital? Yeah. So what's going on with banks? Why can't they get it together? You're telling me. It's like, you know, they've got all the money, but they've got a very specific audience that they want to give that money to.

3:13So, which is fine because it actually provides opportunities for folks like us to say, okay, let's let us go service that business. Because we get it. We know what we built as a technology platform. So we can't underwrite a brick and mortar business because there's not a technology layer to it. But from any other platform, we can actually take in the data from Amazon, from Shopify, from Walmart, eBay. And that helps this kind of underwriting or basically this underwriting algorithm that will be built to figure out what is a good business, a healthy business to basically underwrite. So we're not looking for personal guarantees.

3:50It's really about just how well this is performing. Do we see future sales and things trending in the right way that, okay, if we were giving the money today, can we make sure we get it back in whatever period of time? Um, this may be kind of a difficult question to give kind of like a yes or no to necessarily, but are e-com businesses generally perceived as higher risk? Is that maybe part of the reason that the banks are, you know, don't really have good solutions? I wouldn't say it's higher risk. It's definitely capital intensive. It's, it's just the fact there's not a, their models are much more of like they need property, they need land, they need equipment, something that I can go liquidate and get my money back.

4:38So whether I can go sell your piece of land off or your house or your building, or this CT scanner, MRI machine, dental equipment, they know how to take that and basically get cash to turn that back into cash. Anything short of that, they don't know how to kind of to write the potential of future business. Yeah. Why is access to capital particularly important for an e-com seller, for example? I mean, the biggest expense for every e-commerce seller is the fact they need to buy inventory. So whether they're getting it manufactured from overseas, whether they are reselling and buying it from local distributors and suppliers, or they're doing arbitrage.

5:21They're literally going down to local Walgreens, CVS, and buying it there and turn around and selling it online. They need capital to basically turn that money into more money. So it's a heavy capital in terms of business that you constantly need to kind of feed that machine. As long as you've got capital, then you know you're in a good spot to keep, assuming you can run the business efficiently, you're going to have a good, healthy business. Yeah. Any particular clients you've worked with in the past or success stories that you can think of that might make a good story for our friend that's listening to our conversation?

5:57Yeah. I mean, so we have sellers in all kinds of categories. That's kind of probably the four main categories we see. It's like, you know, either you're doing arbitrage, you're buying it and you're turning around, you're buying retail and you're turning around and selling it on a different medium, like Amazon or eBay or somewhere. Or you're a reseller, you're buying the products in bulk. You know, you're saying, okay, I've got, you know,$5 ,000,$10 ,000,$100 ,000. I can go place an order and then carry establish a line of products that don't need any branding, don't need any advertising because there's already an audience and appetite for those type of products.

6:33Then on the other side, you've got actually brand products that maybe you've never heard of. Like, okay, I've heard of this particular type of dish, let's say, but I've never heard of somebody else that's coming to the marketplace. So to do that, I need to go advertise. So I'm bringing that in. It's kind of my own design, my own kind of I've added a nice little ring at the end of the handle of a cup. And that's uniquely kind of mine. But for you to even know about it, I need to start advertising that. So I'm getting it produced overseas. I need to bring it in and then I'm going to sell it. The other is consumer package growth, meaning that I'm actually getting everything assembled together at a co-packing facility, whether that's a health supplement, whether it's a particular seasoning or, you know, jar of hot sauce or something.

7:23So I'm getting that made and I need capital for that. So when we look at those types of businesses, you know, all of those are uniquely different in how their capital needs are. Some can actually turn them into very, very quickly. Others are, I need capital because it's going to take a few months for it to get into the country. then I got to go through and sell through it. And there's others that are always kind of in production, meaning that, you know, if I'm selling hot sauce, I'm probably making hot sauce every month. Or, you know, building up to a certain season where I think it's going to do well, maybe before summer.

7:58I know people are doing a lot of barbecues. I want to make sure I have enough production in place to cover those seasons. So we're, like I said, we'll partner with anybody that's kind of at that point where you're scaling up because there is a right time to take money outside capital and there's time not to. So we also say no to folks, meaning that if the business is, you can throw money at a lot of problems and money's not always the solution to that problem. And it just will mask the real solution where advertising is one of those. You can keep spending money on advertising and get the results you're looking for.

8:32But is it the excess use of money that got you those results? Or is it, you know, could you have spent less and have more optimized ads and gotten you far better return of that money. So because we're looking at all the data, we can come back and say, yeah, we can give you the money, but that's not going to really solve your problem. You're not running a business healthy enough. And one of the things that I will say to folks is like there's three types of businesses I've typically seen. There's a healthy business, which is actually making profits. And when we're giving money, we're getting that money back from profits.

9:03There's a slow death business, which is there's so much movement going through. There's so much money flowing, especially in a e-commerce type business where there's so much money flowing through that it can hide potential problems. So on a surface, it looks like things are moving well, but you could have one missed week or missed month and you're on a downward spiral very quickly. And then there's the fast stuff companies, which are basically so over leveraged already. They're robbing Peter to pay Paul and they're just trying to keep head above water and it's not going to work out. So, you know, as we look at those, we want to find the healthy business and really help them scale up, give some guidance to the ones that are slow deaths that say, OK, if you've made these kind of course corrections here, you could actually get in a far better spot.

9:53And the fastest, like, you know, it's you're just delaying the inevitable. Yeah. You know, there's the probably other ways to other things to focus your energy on. um looks like you do a fair amount of work with amazon ecom folks maybe share just a little bit about how you work well with amazon sellers yeah so we have a direct integration with amazon so you know when you're when you're basically selling on amazon we have the data coming right in from your amazon so you connect your amazon account right to your bible account And from there, we're getting in all the data to see how your sales are performing, when your upcoming payouts are going to be, the trends of a particular product and stuff.

10:40So we have that data to say, how's the business performing? And plus, we also will connect to your bank accounts. So we get to see it more holistically. So it's not just silo to one particular channel, but looking at it more holistically because you're going to have other expenses. You've got software expenses. You've got warehouse expenses. You've got payroll, VAs that may be helping you out, insurance, taxes, all that stuff that's coming, you know, that's not in that Amazon platform, but it's still part of the business, part of the operational expenses. So having that full visibility and the fact that we actually share it back with you because everybody that's doing funding in the space is using that data.

11:17We just decided to make that available back to the customers say, look, this is kind of essentially here's your cash flow statement. This is how well you're performing. This is kind of what the underwriting team's looking at. We just want to make that visible to you again to see exactly, you can see how well you're performing. And, you know, for some folks, it's really eye-opening to say, okay, yeah, I kind of had some of this information intuitively. I kind of knew how I was doing or had stuff in my spreadsheets, but, you know, spreadsheets are only as good as the last time you updated them. The fact that this is real time, tapping into kind of all your key sources, your bank, your Amazon, any other platforms you're on, now it's a lot more meaningful.

11:52I like that. All right. So talk about how fees, interest, can you maybe talk about the math a little bit? One concern I'd say historically I've always had is I think that there's unfortunately quite a bit of predatory lending in the business financing world. You know, you're factoring companies, that sort of thing. Can you maybe share a little bit about how you work with your clients? So the way we're doing it is really just, it's a flat fee. So we will charge anywhere probably from 4 % to 10 % as a flat fee because the idea is really working capital. So you're getting it for a short term. So anywhere from two to six, eight months tops.

12:34Because really what we're solving for is a cash conversion cycle. Basically, because it's so capital intensive, there's time that money leaves the business and you get it back into the business, meaning from the sales. and there is that kind of window that you need to basically solve for. I mean, most businesses, they've got 50K, say, they're going to put into that because that's just kind of the business is running. So every time 50K goes out, generates a$100 ,000 worth of sales. Your net profits off that are like 10%. So you've got now another 10 ,000 to grow that business further from just the free cash flow that comes through that.

13:08Well, if you want to grow it organically, that's fine. Keep taking that 10 ,000 and let that organically keep growing. Or you can say, I can bring in outside capital and say, okay, I'm going to improve my buying power by 30%. And what does that do to my business? How much faster can I grow that? So capital is one piece of the equation, meaning you still got to have the infrastructure in place. You've got to have the warehousing, the right vendor and supplier relationship that you can get the inventory. You can source the stuff. You've got the right teams that can manage it and make sure they're staying on top of the ads.

13:42the right price so that things are selling. So once you've got the team and infrastructure, all that in place, then the capital can help. I mean, capital really shouldn't be the barrier from your growth, but we just can't help on the other stuff. So if you've done all that other stuff really well, okay, let us kind of give you the finest to really scale this up. Excellent. All right. So someone's been listening to our conversation, Oz, and they're like, I want to learn more. What are their next steps? It's very simple because, like I said, we're a technology platform. All you have to do is you go to runviably.com.

14:16You click sign up. You connect your Amazon account. In some cases, you may need to connect your bank account. You get an offer. That takes all of probably five minutes. Everything is good. You go through some verification steps, and you've got the money in your Viably business checking account. All of that can sometimes happen as quick as within an hour. All right. And that's at runviably.com. And anything else that maybe we didn't talk about you think is kind of important? Well, obviously, let me just ask you this final question. 2024, what are you predicting in your world? What are some trends that seem to be kind of warming up?

14:57Any big things that you're keeping your eye on? So as a whole, one of the benefits of kind of being in the seat I sit in is the fact that I'm talking to so many different sellers that I'm kind of getting this knowledge from the collective. because everyone's got slightly different perspectives on it. But as a whole, as I see kind of this trend, everyone's a lot more optimistic about 2024. Pretty much everybody took a dip in 2023. Everybody was on a high in 2022. There's a lot of consolidation in the market. There's a lot of acquisitions during that year. So this year, there's a lot of kind of, if you were investor and stuff, there's a lot of portfolio right-sizing that took place.

15:37So hardly any exits. Everyone that was thinking about exits are now thinking about exits either in 2024 or start prepping for 2025. There's a lot more optimism there. In the marketplace as a whole, I think everyone's a lot more bullish on Walmart and Walmart's performance next year for being as a seller to be able to sell on there. And we're seeing that both from more sellers wanting to be there, plus Walmart's doing a lot of promotions this year. They seem to, because they've got competing like Amazon Prime, they've got Walmart Plus. And they did that like 50 % off, I think since even before Black Friday, because they were wanting to get the, you know, it's a marketplace because there's supply and demand side.

16:19So they're trying to incentivize the demand side to get more people on there saying, okay, let me buy from Walmart as they're bringing on more and more sellers on the supply side to offer more products. And Walmart, you know, they've got deep enough pockets to take on somebody like Amazon. And they've got the last mile issue kind of covered. compared to anybody else. Meaning that they've got stores everywhere. They can get product from that store to your house. So that's going to be interesting to see how that plays out in 2020. Yeah, very exciting. Oz Merchant, again, you're the VP of Sales and Success.

16:54And again, the website runviably.com. Oz Merchant, thank you so much for joining us. Josh, thank you so much. Appreciate having me on.

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