Chad Rubin is the founder of Skubana, a multi-platform analytics platform for online merchants. He created the platform when he realized there was nothing that met his own needs as an online seller. Rubin got his start selling on Amazon, building his brand Crucial Vacuum. He eventually grew selling on multiple platforms, including its own web store. After expanding into other product categories, the parent brand Think Crucial is now a multimillion-dollar company.
Rubin spoke to us by email about starting Skubana and how it differs from the competition.
Just briefly, can you summarize your background and how you came to the decision to start Skubana?
I started my career in finance, and in the last year I was on Wall Street I was covering Internet stocks; Amazon, eBay, Netflix, etc. I noticed that despite the market collapse, Internet stocks were in a defensive position and posting solid gains.
My parents owned a vacuum company as I grew up, and I approached them about selling online. They basically wanted nothing to do with it. I bought their products and sold them on the Internet, which did well enough that I started going to distributors to replenish. This was back in 2007, before direct-to-consumer businesses started disrupting verticals. I built a brand around this called Crucial Vacuum, which has grown to over 1,400 products and 88 containers per year across various verticals.
While all this was happening, I began noticing some pain points that I had, which were shared among other online sellers. As business grew, operations got more complex, and I needed the right operational foundation to continue to grow. I had to deal with patchwork integrations that lost data and caused problems. I couldn’t get and organize all the analytics I wanted, and I had problems organizing inventory across multiple channels. I also noticed that the operational software available didn’t give sellers enough control. You wouldn’t find out until it was too late, after you paid the expensive entry fee.
I built Skubana to be an all-in-one solution to unify the fragmented operations, all in the cloud, better than anything else out there, and at a fraction of the cost.
Given your background in online retail, what was the process like starting a digital platform for sellers? Was it a difficult transition from what you were doing before?
Skubana and Think Crucial are highly intertwined. We use Skubana for Think Crucial, so in a way we are scratching our own itch and we were the beta testers for our own software. It wasn’t difficult to transition from e-commerce retail to creating an e-commerce operations platform. I was already so deep in the industry that I understood the major pain points, what was already available to e-commerce sellers and what high-volume, multi-marketplace sellers needed.
How does Skubana differ from similar platforms and services available to sellers?
Skubana is different because it’s seamless and handles everything from inventory management to analytics. Imagine a tool that just does inventory management. It solves one small problem, but that one tool will then need to be combined with other tools if you want to gauge profitability, record margins, forecast demand and adjust pricing automatically. You have to use a warehouse management tool, shipping software, accounting tools, invoicing tools, another company for drop shipping and if you need purchase orders, that’s yet another tool. With each tool you use, a little more of your revenue gets taken away.
Skubana is able to unify all these softwares in one place and eliminate latency between inventory, so you don’t oversell. We have the most sophisticated prevention mechanism for overselling that’s out there right now. We also built our software on the highest grade technology, Java Enterprise, which is what Wall Street uses.
Some tools are built on software that isn’t enterprise grade, which means they could never handle the volume that Skubana does. I do 60,000 orders a month, and was turned away by one company who told me my orders would break their system.
E-commerce has evolved, but the technology to support it has lagged behind. That’s why sellers have to use so many tools to do business efficiently. Even then, it isn’t that efficient. We take feedback from our clients and work to solve real business challenges while making it affordable. It’s a true “software as a service” model. You pay for what you use, when you use it. And it’s pennies per transaction.
What kind of challenges do sellers face today? Do you anticipate new challenges in the future that Skubana might try to solve?
Today a big problem for sellers are the different rules coming out on different selling platforms. Each platform has their own unique audiences, so it’s important to diversify to protect your business (we have a great article coming out on this May 2) and gain more customers. But the platforms also come with different rules. Sellers need to be constantly updated on the new regulations coming out in order to keep operating properly.
Right now Skubana is a true operations platform. We take care of integrations, orders, inventory and analytics. We’re expanding our integrations partnerships and are in the works on a Skubana training program so our sellers get onboarded and understand all the tools at their fingertips.
Should people selling just on Amazon consider using Skubana given they face less complexity and have Amazon’s own tools at their disposal? What about other single-platform sellers?
Skubana is the first platform to support both Amazon Vendor Central and Amazon Seller Central, thanks to our EDI integration. We work to make things more efficient and expand functionality even within other platforms. So even if you are only selling on one platform now, I’d recommend using Skubana 1) for the convenience and additional tools at your disposal, and 2) with the future in mind, so that as you scale and grow you’ll already have the infrastructure in place.
Also, I advise against selling exclusively on one marketplace that you have no control over. Rules change in an instant, as I experienced first hand with an unexpected Amazon suspension the day after Christmas. Even though my issue was resolved within a few days, we still lost a lot of revenue, and listing hijackers were able to take over. Suspensions can take months to resolve, and so if it happens to you, it’s best to have a contingency plan and other marketplaces to turn to.
At what level of sales volume, revenue or other metrics should sellers consider using this kind of platform? Is it overkill for a certain kind of seller?
Our platform is built for high volume, multi-channel e-commerce merchants. Serious sellers with serious businesses. A couple thousand orders per month or merchants doing over $1M in revenue.
We integrate with every major shopping cart and marketplace such as Amazon, Jet, Walmart, Shopify etc. Instead of cobbling together fragmented applications, our sellers have the ability to unify their business in one place. This means you can now diagnose your business in seconds.
We also focus heavily on automation so power sellers don’t have to mine through their data to see what they need to order, when they need to order it and with what vendor based on lead time. Skubana automatically creates purchase orders awaiting your approval with our algorithms.
Even if you’re just an Amazon FBA seller, we have a 1-click integration on Amazon, do all the replenishment and have SKU level profitability analysis with all the FBA fees includes.
Words of wisdom: When choosing software, make sure you choose one that doesn’t limit your growth. If you choose a software and build your business around a software that only supports Amazon, you’ll never grow off-channel.
What has the response been to Skubana so far? Do you have any success stories from users to share?
A quick Google search for Skubana reviews will show that we have a perfect five-star rating across the various review sites. We’ve done the heavy lifting and compiled them on our site so our potential customers can see our wall of love.
If you want to check them out on hosted sites:
- https://www.facebook.com/skubana/ – 5 stars
- https://www.getapp.com/operations-management-software/a/skubana/ – 4.94 stars
- https://www.g2crowd.com/products/skubana/reviews – 4.7 stars and High Performer award
- http://www.webretailer.com/profiles/skubana.asp – 5 stars
- http://www.capterra.com/inventory-management-software/spotlight/145409/Skubana/Skubana – 5 stars
What role do you see e-commerce playing in the economy today and in the future? Do you expect small online retailers to eventually play a larger role?
E-commerce is a force that is not going away anytime soon. It’s growing an average of 15 percent, whereas brick and mortar stores are growing at a tepid 3 to 4 percent on average. The barriers to entry for starting an online brand have been lifted, allowing for curated e-commerce players to becomes major forces in retail:
- Coffee – Deathwish Coffee
- Apparel – Cotopaxi
- Shaving – Dollar Shave Club and Harrys
- Mattresses – Casper
- Pants – Bonobos
- Glasses – Warby Parker
These companies found niches and problems that needed to be solved and have disrupted incumbents that have held the most market share for decades.
What I find to be very interesting is that these e-commerce companies are now investing heavily in physical retail stores. Digitally native e-commerce players are actually better at building, monetizing and creating an experience in physical stores than the traditional commerce giants adding an e-commerce element to their brands.