Do You Feel Like You Are Running Around on a Golden Hamster Wheel?
Most ecommerce businesses, and articles about business growth, claim that the secret to growth is better marketing. With better marketing you get more sales, and your business grows, right?
Not so fast.
Could your team handle 2x, 5x or 10x the sales you are getting now? Most businesses humbly answer No. Even the expected increase in sales during the holidays can lead business owners and managers to feel like they are running around a golden hamster wheel. The money is good, sure. But are orders fulfilled efficiently and is this growth sustainable?
As businesses become more complex and current operations can no longer sustain the growth, many businesses throw their hands up in the air and wonder whether they should go to an ERP solution.
ERP solutions can cost over $100,000 and the time for implementation can be on the order of months. While an ERP solution could be the right fit for some, many businesses find that it is too big a jump for them. These rapidly evolving businesses feel like they are outgrowing QuickBooks, but they are not ready for the leap to an ERP.
In turns out that with the right workflow and automation, some businesses can stay with QuickBooks even as their annual orders exceed 100,000.
For example, our customer, Fair Harbor, uses QuickBooks Enterprise to processes upwards of 400,000 orders a year. By taking advantage of Connex’s advanced functionalities for large companies, such as the summary sale and match deposit tools, as well as the rules engine, Fair Harbor, can keep their costs down while processing thousands of orders every day.
Three Steps to Help You Stay on QuickBooks As Your Business Scales
Many businesses contact us when their operations are “bursting at the seams” and they do a lot of double manual data entry. The problems with inefficient operations become magnified as the business grows. If the needs to hand-enter data for 10,000 orders a year, they will need to do at least double the manual data entry to fulfill 20,000 orders a year. With the high turnover among data entry staff, this process is not scalable.
As we mentioned above, better marketing in order to get more sales is cannot be the foundation for sustainable growth. At best, an outstanding marketing campaign will lead to a temporary increase in sales, but it does not help with the creation of a sustainable workflow.
The create a strong foundation for your business so you can scale, we recommend the following three steps:
Step 1: Simplify
Step 2: Automate
Step 3: Increase your prices as needed.
Let’s dive into each one of these in more detail:
Step #1: Simplify
One of our customers who so sells sunglasses through several website as well as Amazon, realized that only two out of his six selling channels were profitable. He was able to gain this insight by creating accurate reports in QuickBooks with the help of Connex. Without the automated data sync, which helped him to get accurate cost of goods sold (COGS) for every product on every channel, he wasn’t able to make financially informed business decisions. After this insight, he discontinued four of his channels and he reallocated his staff’s time to grow his two profitable channels. This allowed his staff to be more attentive to orders and customers coming through those two channels.
Other ways to simplify include eliminating processes that no longer work. For example, many companies have several different ways that customers can contact them for support: phone, chat, email, ticket, social media or feedback on website forums. Having to monitor all these different channels take up a lot of company resources. Hence many companies have simplified their customer service processes by choosing just one or two of these channels.
Which processes can your company simplify? We found that many resources can be freed up by streamlining every part of your process, including marketing, sales, accounting, inventory management, order fulfillment, shipping, and customer service.
To grow sustainably, you will need to continuously evolve your business operations and reallocate your resources.
Step #2: Automate
If you are rolling your eyes at yet another automation, you are not alone. With so many “apps” out there that fall short of the promises they make, it’s a small wonder that businesses revert back to manual data entry. The problem is not necessarily with the automations, but that businesses don’t have the right expectations from the specific automation they chose. Click here for our checklist on choosing the right QuickBooks automation for your business.
Your choice for a QuickBooks automation will depending on the complexity of your business and how much flexibility you will need in this tool. In general, the more complex your business is, the more flexibility you will need in your QuickBooks automation. Most Connex customers have some complexity in their business (eg. multiple selling channels), and use the rules engine to create a streamline workflow.
Ideally, you want an automation that combines out-of-the box functionality with flexibility for your specific business requirements.
Step #3: Increase prices as needed
This is a controversial and sensitive topic for many businesses. What will our customers think when we increase our prices? Will they all go to our competitors?
Yet, all of us are willing to pay a premium for products and services that we value. In addition, when it comes to something important to us, we are not that price sensitive. While both fast food restaurants and steak houses serve burgers, few businesses would take their clients out to dinner to a fast food restaurant. If the price of the burger went up by a few dollars at a steak house, most customers wouldn’t even notice.
We see many businesses go out of business because their prices are too low and they cannot cover their expenses. Their business leaks money through payroll, shipping, inventory, and general operations just to name a few.
Many of our customers sell premium products such as nutritional supplements, clothing, jewelry, bags, soaps, candles, chocolates, coffee and health foods. They sell to customers who value premium products and are not very price sensitive. It’s common for their customer to pay more for premium shipping or to upgrade their order when offered complementary products.
The dilemma most businesses face is that without accurate financial reports they don’t know how much they should charge for their products or shipping to remain profitable. Once they have accurate financial information, our customers can charge the right prices for their products and their shipping. In fact, you can automatically mark up with shipping with Connex to save time and increase profits.
An automation such as Connex can provide you with almost real-time accurate financial information so you can determine the price point you need to set to remain profitable.
What About Inventory Control and Management?
Although most businesses think about QuickBooks Enterprise as an accounting solution, it also has advanced inventory functionalities that are suitable even for businesses that process over 100,000 orders a year.
One of the biggest challenges that inventory-based businesses face is the lack of integration between their accounting and inventory management tools. How can you prevent oversells without knowing how much inventory you have? In contrast, how can you stop tying up your cash in overstock to prevent oversells?
The answer is that you need a reliable integration between your accounting and inventory management tools. In fact, many of our customers on QuickBooks Enterprise, no lo longer need an expensive inventory control tool once they implement Connex.
When you combine QBE with Connex you can:
- Create sales orders
- Close with an invoice
- Create a PO
- Associate with list of vendors
- Receive inventory
- Vendor credit
- Pay vendors
- Partially and fully received POs. Some vendors only send some goods at once
- Hold a list of inventory, non-inventory, and assembly items
- Show screenshot
- Custom field support
- Bar code support
- Man. Part. No.
- Default vendor
- Parent products
- Report on COGS, inventory shrinkage (e.g.spoilage, inventory adjustment)
- Build assemblies
- Show form
- Track inventory by site and bin
- Inventory transfers
- Warnings that you lack inventory to sell
- Perform inventory adjustments
- Price and value
- QuickBooks can accurately calculate your COGS, if it has the right data.
- No need for a complicated sync from your 3rd party inventory tool to QuickBooks.
With the help of an automation such as Connex, you can transform QuickBooks Enterprise into a web-based inventory control solution.
Connex CEO Joseph Anderson has said that: “Many businesses plateau because they feel that they are up against a glass ceiling. We help businesses shatter this glass ceiling with a hammer.”
If your business is outgrowing QuickBooks but you are not yet ready to make the leap to an ERP solution, an automation such as Connex can help you to stay on QuickBooks as your business grows to the next level.
By combining out of the box functionality with the flexibility of the powerful rules engine, Connex can help you to streamline your workflows across all your ecommerce channels. Connex also sync your stock changes over and can help you turn QuickBooks Enterprise into your inventory control solution. With the accurate financial information and automated workflows provided by Connex, you can stay with QuickBooks and keep your costs low as you scale your business.