Podcast

Learn from Fast Growing 7-8 Figure Online Retailers and eCommerce Experts

EPISODE 06 59 min

Tips on How to Get B2B eCommerce and eProcurement Right by Ronald Duncan of CloudBuy



About the guests

Ronald Duncan

Kunle Campbell

Ronald Duncan, Chairman and CIO of Business to Business eCommerce and eProcurement specialist cloudBuy. Formerly a downhill ski racer who competed at two Winter Olympics, Ronald is a Chartered Physicist and spent ten years running his own software consultancy before launching cloudBuy. The company recently extended its partnership with VISA and has announced significant new projects in India and Australia.



Former Olympic downhill ski racer Ronald Duncan launched CloudBuy in 1999 when he realised that eCommerce was about to take off. CloudBuy is a Business to Business ecommerce and e-procurement platform that claims to be the largest of its kind.

After graduating from the University of Cambridge and running his own software consultancy business for ten years, Ronald used his software development experience to create an online platform that offers a simple B2B procurement solution connecting buyers and suppliers from all over the world.

Key Takeaways

  • 06.39 – B2B stuff is just a lot more complex than the straight forward B2C side
  • 08.55 – Ecommerce is critical for e-procurement
  • 11.03 – The work we’ve done in the B2B space is we’ve eliminated all that mess
  • 14.26 – We integrate with all ERP systems
  • 19.38 – B2B actually requires really good content management
  • 23.47 – There’s about 400 000 organisations that buy from us on an unofficial basis
  • 24.55 – We’ve got 80 year olds going up and buying their own care
  • 27.52 – There’s very little B2B ecommerce in Hong-Kong, Singapore, India and the Middle-Easts
  • 30.29 – Go global
  • 33.00 – We want more suppliers selling in South Asia markets
  • 36.15 – If you’re going to get it to scale up, you’ve got to have a simple pricing structure
  • 38.25 – Quality content and making sure it’s up to date
  • 40.30 – B2B can do really well on SEO because the competition is rubbish quite often
  • 45.45 – SEO and web marketing, that’s going to help you getting more deals
  • 51.40 – The science of the B2B market last time Visa surveyed it, was 109 trillion.
  • 57.28 – We’ve made a bunch of customers into millionaires and we’d like to make some more.

5 Tips for B2B eCommerce

  1. Going Global
  2. Structured Pricing
  3. Quality content – joined up system (integration) – providing rich content
  4. SEO – unstructured – optimised
  5. Winning Deals – bidding to RFQs

Main customer acquisition channels for B2B:

1. Content Marketing

Speak to clients through content on your website. Need of a good content management system.

2. SEO

The biggest challenge in SEO is making sure that you’ve got attractive content.

  • The B2C environment is ultra-competitive
  • In the B2B space, just making sure that your content is up to date, attractive etc. can bring you a lot of business.

How cloudBuy Works

Tweetables

What I’m usually doing is listening to our customers and finding out what’s working for them, what we need to do to change and support them

Transcript

Welcome to the 2x ecommerce podcast show where we interview founders of fast growing seven and eight figure ecommerce businesses and ecommerce experts. They’ll tell their stories, share how they 2x their businesses and inspire you to take action in your own online retail business today. And now here he is, the man in the mix, Kunle Campbell.

Kunle: Hello 2xers, welcome to the 2X ecommerce podcast show. It’s the very first show of 2015 and I’m your loyal host Kunle Campbell.
This is the podcast where I interview ecommerce entrepreneurs and online marketing experts who help uncover new ecommerce marketing tactics and strategies to help you, my fellow 2xers, double specific ecommerce metrics in your online stores. If you’re looking to double metrics such as conversions, average order value, repeat customers, traffic, and ultimately sales into your online stores, you are in the right place.
On today’s show I’m very excited to have my very first B2B ecommerce marketing expert on the show. His name is Ronald Duncan, he’s the founder of a Business to Business ecommerce and e-procurement platform called CloudBuy. He’ll be providing insight into how to grow your B2B ecommerce business as well as how CloudBuy, his platform, helps Business to Business profits rapidly grow and successfully sell online and in marketplaces. Also if you’re looking to get into B2B ecommerce, this show will be really insightful for you. Let’s go back to Ronald.
Ronald is a former downhill ski racer who’s competed in two winter Olympics. He’s also a charted physicist who’s graduated from the university of Cambridge, and after that, spent ten years running his own computer software consultancy before launching CloudBuy. CloudBuy claims to be the world’s largest Business to Business ecommerce marketplace solution bringing together other organisations and buyers. They work with universities and colleges here, in the UK. Councils, which are local authorities of the government on a local level and the National Health Service, the NHS.
CloudBuy provides technologies to manufacturers and suppliers to build ecommerce portals for selling their products to customers like these universities, colleges, National Health Service or even councils. It connects them, on the platform, to ten thousand suppliers in their database and it creates custom marketplaces.
Without further ado, I’d like to welcome Ronald to the show. Ronald, welcome.
Ronald: Hi there.
Kunle: Could you please take a minute to tell us about yourself?
Ronald: Ski racer, software designer, world cups and everything else. Back in the 80s I used to ski race, my best result was 13th in the world cup, I spent about 10 years competing in that and I went to Cambridge university where I studied physics. I was really unusual in that I retired when I was 19, I went through that, been in retirement, went to university, came back and, during the summers, I was at a software engineer defence contractor, so we did all sorts of things like spotting ships from the space, I wrote a Pay TV system that went into tells back then and although I has fourteen weeks a year to do that, I basically decided that I had to spend those fourteen weeks, so I went to do a year ski racing, got to best result and ended up 13th in the world cup. I had to retire a second time when I was 30, because by that time, the doctor told me that I’ve got the back of an 80 year old lady. We jump 60 metres, and if you land off a slightly flat landing, the skis fall to bits, never mind what it does to your body, it’s just crazy. It is just the most amazing feeling in the world to race in the world cup.
Kunle: Absolutely. I had a colleague who does ski racing and he has some experience as he’s 24, and he’s had to stop because of what it’s done to his back, but not to the Olympic level anyway.
Ronald: So I did that, retired from that, went back into software and started a bespoke software company back in, 93 when I retired, in 91. Then, by 99 we got a bunch of blue chip customers that went from people like Intercontinental Hotel Resorts, Accenture, a couple of weapon establishments to hundreds of suppliers to supermarkets because we built a trading system with them to trade with the supermarkets, people like PayPoint. Lots of major customers and I kicked off what was CloudBuy to try and solve the complexity of B2B ecommerce, because it’s an amazingly complex area.
Kunle: What year did you set up CloudBuy?
Ronald: 99. We were called at UK PLC which turned out into CloudBuy.
Kunle: Interesting. What problem did you see in the e-procurement as a whole in the 90s and late 90s leading you to want to develop a platform to solve the problem?
Ronald: What we saw with the supermarkets was that each supplier to the supermarket only sells a small number of things. Think of someone like the baked beans supplier, they supply baked beans, maybe like Heinz, they may have 20-30 products they’re selling, and it’s 10s or 20s products and there’s still quite a few orders going wrong there. We saw in 99 that ecommerce was going to take off and I actually did a walk round local businesses and I visited 300 businesses and what I found was that most businesses don’t sell to end customers. I brought the directory of all 2 million businesses in the UK, all their fax numbers, the few hundred email addresses and thought “I’m going to create an electronic Yellow Pages, let’s go for this” and they went “well, we actually sell different prices to different customers” “we sell different products to different customers” “we do this, we do that…”, the B2B stuff is just a lot more complex than the straight forward B2C side where you’ve got one product and you’ve just got to market It out to the customers.
Kunle: Pretty straight forward to do. So you drive the traffic, get them onto the site, hope they convert and you start to work on conversion and get them to buy a product.
Ronald: Yes, so we started doing all that stuff back in 99 and what we found when we went round everybody was that there was a lot more functionality that was required for B2B and so we started building that, but it’s been very much a bleeding edge thing because what they had was the buyers weren’t really on board and now we’re getting a lot more buyers on board and the whole thing’s moving forward and starting to take off, but it’s still moving downwards.
Kunle: Ok. How do we bridge the connection between e-procurement, which is departments buying for the organisation or for businesses and companies, and ecommerce, actually people selling, how does ecommerce fit into e-procurement?
Ronald: Ecommerce is critical for e-procurement and our biggest frustration has been that old other e-procurement players are basically legacy systems that have come from a procurement background rather than an ecommerce background. So the industry standard is that they’re quite happy to have 30% of invoices mismatch in private sector and 60% mismatch in government. 60% mismatching of invoices is just a disaster. Whereas we get 100% of invoices correct because we’ve come at it from an ecommerce perspective where we learnt that you’ve got to have the right price on the site, because if it’s under-priced a judge will say “you entered into a contract and you’re going to have to honour it”. “You put the TV on at £3, well it’s a £3 TV, they paid”.
Kunle: Did you hear what happened to Amazon just before Christmas? There was a glitch with a third party software and products on Amazon for a period of time were selling for £0.01. It almost bankrupt some of the sellers on Amazon off the back of that.
Ronald: That is very much the exception in the ecommerce world and you try and correct that sort of thing straight away, whereas in the B2B space, it’s actually pretty normal. We’ve been educating the B2B space as to actually that’s unacceptable. All your people go home and it’s easy for them to order online and they come into work and they have this shocking, ugly difficult to use system.
Kunle: So I reckon there’s a lot of human intervention in the B2B ecommerce or procurement setup where if something doesn’t look correct, a representative of the company would be in touch with the seller and try and work it out after a number of emails and phone calls to make it happen and to reconcile the invoices, but in ecommerce there’s hardly any of that. I guess CloudBuy aims to reduce that fiction.
Ronald: Yes. The work we’ve done in the B2B space is we’ve eliminated all that mess. That is one of the reasons that Visa have teamed up with us because they provide electronic payment methods and the problem of that mess in the B2B space was that they’ve got something like 80% of the traffic and expenses are now on card, but less than 1% of the actual buying for the actual organisation is going through Visa’s payment space. They realised that all these legacy systems were killing it because until you could get accurate invoices that could be automatically paid in there, you couldn’t get the full volume going through and that’s we’ve done with something like our UK university sector, we’ve put all the contracts online and now you can buy them with a purchasing card. Suddenly you’re bringing that ease of use B2C experience online but providing all the controls that go into procurement, because the difference between B2B and B2C is that you go to a large organisation, they will have a procurement department, the procurement department will negotiate a price with you, your sales guys would have gone off and haggled with them if it’s private sector. If it’s public sector they’ve got to put a bid in and they’ll have looked at it go on right now this is the basket of items, this is the volumes and this is the price and this is what I think is going to happen. All that pricing has been put in and you need a system that makes it easy for the buyer to go in, buy at the right price and do it. We also make all that.
Kunle: So I reckon the sales person negotiates the price, the tiered price and all the negotiation is sort of imputed into CloudBuy, your system, and that is a setting stone for further purchases by the customer going down the line.
Ronald: Yes, and the thing is because of the complexity we’ll quite often integrate with the supplier’s ERP system so we’re getting the current prices from there, we’ve then got the feeds off the buyers so they know when the prices are changing and they can approve it or sort things out. There’s a whole lot of things there where we automate and smooth that stuff out. The other thing is that you’ve got lots of different things. You’ve got stuff like stationary where it’s pretty straight forward, you know what the item is, you know your volumes, prices and we integrate with the stationary suppliers. We then move off into something like services where you want to get a room painted, well you don’t know what the cost of painting the room is going to be until someone gives you a quote. So we’ve got lots of stuff that automates that kind of service side of things, and then you go into, say the medical side of things, orthotics, which are casting foot beds for shoes and that sort of thing, and each one of those is different, so we’ve got form generators where people go in, fill out all the forms and the system will collect all the information required for the foot bed. Or temporary staff where, again, you need to know the skills and all that sort of stuff, so we’ve got something like over 15000 little apps that suppliers have built on our platform to build the correct information so they can provide the right product.
Kunle: You mentioned ERPs, what major ERP platforms do you integrate with?
Ronald: We integrate with all of them. The ones that everybody would have heard of are SAP, Oracle, Microsoft’s got three, Agresso, Cedar, and then we’ve integrated with things like Finest by Software AG where there’s only one instance of it in local government in the UK. We’ve integrated with a couple of government organisations that have built their own finance systems. We’ve got that skillset, so most ERPs, we’ve already integrated with and even ones that we’d never seen before, we can usually integrate in less than a month.
Kunle: Pretty heavy weight ERP systems there, so I guess the plethora of buyers will be there.
Ronald: It came from our background at software development. You look at something like PayPoint, PayPoint integrates with 40 utility billing systems. Those are an absolute nightmare. ERPs are really easy in comparison, so we also did all the till systems back then. We’ve been through lots of different integrations whether it’s the London theatre box office system or the airline passenger name recon system.
Kunle: Ok. A lot of the listeners will be wondering now, how does CloudBuy compare to Amazon Supply. Amazon just released a Business to Business procurement platform called Amazon Supply, I think it was about 2 years ago, and it caused a lot of stir in the industry. I’m not quite sure what progress they have made, but how does it differ to CloudBuy?
Ronald: Amazon Supply is, on one level, it would be one supplier on the cloud buyer marketplace, so we can connect into it for a buyer. The other way of looking at it is it’s a massive threat to anybody in the distribution business. It’s not got a lot of traction yet, because they actually bought the company about 5 years ago and rebranded it Amazon Supply and, as far as I’m aware, it’s just in the US at the moment. But it’s one single supplier, say RS Components, and what you usually find in that space, some of them like RS Components have got something like 600000 items they sell, and that’s focused on their electrical components base. Amazon Supplier trying to compete with that focus thing with a broad platform, so RS focus on electrical components, but [inaudible: 0.17.08] focus on tools, and so each one of those vertical sectors has at least 2 big distributors in it who are clearly worried by Amazon Supply. We’ve seen a market more in the middle ones because the big ones have already spent millions on their platform. Some of them are looking at changing, but we see Amazon Supply as an attraction to us because we’ve seen a number of them looking at creating their own marketplace, so we can provide those sort of companies with a marketplace in a box for them to go off and create their own version that’s got them and their competitors on.
Kunle: As an alternative to Amazon Supply, or complementary to Amazon Supply?
Ronald: The distributors will want to know if there’s an alternative to Amazon Supply.
Kunle: So you provide the structure for them to set up.
Ronald: We just did a deal with the confederation of Indian Industry to provide them with a marketplace for their members, they’ve got 7000. They’re the UK equivalent to CBI, so they’re all the big players in India and they’ve actually done two deals. One deal with us to try the marketplace for their members and to build ecommerce sites for their members who are building ecommerce sites for all these big Indian industries. They also have another deal with Alibaba, but that’s just to put the content in. So they put the content to us and then Alibaba’s one of their sale feeds. The other side is that Amazon Supply works off suppliers in the same way so we can put content onto Alibaba, we can put content onto Amazon and syndicate it out. In some ways we’re more like Magento Go + Amazon. We can put the stuff in and we can put it into Amazon or Alibaba or we can put it into the industry marketplace like CII’s marketplace.
Kunle: I guess when you refer as yourself being like Magento Go, you’re pretty much referring to the cloud based functionality.
Ronald: Yeah, it’s the cloud sale side of things.
Kunle: Because the next question is, how is Ebay to be compared to ecommerce management systems like Magento, Demandware and Hybris, to higher end platforms, Magento Enterprise obviously?
Ronald: We compare really well with them. The main difference between us and say Magento, I see Magento the man where Hybris is much more ecommerce/catalogue management system, managing the ecommerce catalogue and the sales side of it and then not so strong on the content management side of things. What we see in B2B actually requires really good content management because you’re trying to sell complex products is not as simple as “ok, I can see what an apple is, I know what an apple is, I’m going to buy an apple”, there’s a limited amount of marketing spiel you can give me about my apple because I know what I want to buy. Most B2C items, the mass market B2C know what they’re buying. In B2B, things are more complex. We’ve got a customer who sells antibodies, they’ve got 3 billion different antibodies and they have got thousands of pages of content that explains all the complexities, what they do and everything else, and then tens of thousands of pages of product stuff, so they need a good content management system. What we’ve got is a content management system that was benchmarked against Drupal a few years ago, we covered all the Drupal functionality and Drupal, at that time, had about 60% of the functionality that the customer wanted, they wanted another 40% on top of where Drupal is and we were able to give them that other 40%. We had developed a chunk of stuff for them because, out of the box we were at about 60% as well, but we’ve now got people like Invest Northern Ireland who gave us a 10 year content management sit, and that’s just to do website content management. What you’ve got in that content management is stuff like “this person’s come in, which ad we should show them?”, it’s all that stuff that you’ve got in a newspaper publishing system. “They’ve come in, I want to promote these articles, I want to promote this stuff to them, they clicked on that, I want to promote this, I want to do this, I’ve got to make it easy to navigate, I’ve got to do this, I’ve got my Twitter feed, I’ve got all these other witches”. That’s where what you find with something like Magento, is basically people use it a product thing and then they try and use other content management systems to do the content web management bit. I call that a Frankenstein monster because you can usually see the gaps between it. The worst cases are something like a local government site where you hit it and you see that half the departments have got a different content management systems, none of it is joined up and you see all the scars. You usually see in the commercial sites, like the one we took over from the antibodies supplier, they had a nice CMS, PHP, MySQL, CMS and they had a .NET ecommerce system and you could see the joints between the two and it made it very difficult when what you want is that seamless thing where you’ve updated the product and that product information needs to flow into some of the content stuff and vice versa, so it’s all seamless. You can do all that classic upselling stuff of “You looked at that, you’re probably interested in this. You went off and saw one of those, what about this? Do you want a guide on how to use this product?”. To do B2B well, requires that extra bit of work.
Kunle: To integrate content with it and widgets and user behaviour to generate relevant content.
Ronald: Exactly, you’ve got all that stuff. The other bit is a form generation capability of how you can collect extra bits of information because we usually find in the B2B space that there’s more information that needs to be collected in order to make a sale.
Kunle: Ok. Could you give us an idea of how many organisations have signed up on the procurement part of the business on CloudBuy, how many have signed up to date now?
Ronald: We’ve got two bits on the buyer side. One’s that buy off us unofficially, there’s about 400 000 organisations that buy from us on an unofficial basis. And with official buyers, we’re around about 1000. The thing with that is that they range from size to spending billions to spending tens of billions.
Kunle: So they sign a contract with yourselves, they have some integration with the ERP systems…
Ronald: Yes. To give you an idea of how much we’ve analysed on the buyer side, we’ve now analysed 750 billion dollars worth of spend, and last year we analysed 250 billion.
Kunle: 250 billion dollars came through your system last year?
Ronald: That’s what we analysed for our buyers. In that process of taking the buyer of, this is their current spend, and mobbing it onto CloudBuy. So there’s quite a big ramp up going on as we analyse everything they buy, sort out, prioritise them into bringing them onto the system. The most complex bit we’re doing at the moment is social care. If you think about social care, that’s a big area. We spend a lot of money on social care in this country and in the developed world. It’s also the most challenging bit because you’ve basically got vulnerable people who require care and they may be mentally, physically handicapped, or frail and elderly, and you have to make buying something complex, such as a home care service where somebody gets you up in the morning, easy enough for them to do. We’ve been successful doing that, got a deal to do that for the NHS where they’re looking to have 5 million people buying care.
Kunle: Internally, so the staff actually use this system?
Ronald: No, their staff negotiate the contracts and the individual person buys it. So we’ve got 80 year olds going up and buying their own care.
Kunle: How do they do it? Do they use debit or credit cards?
Ronald: Yes. There’s a mix of self-funders who come on and choose their own care package and pay for it themselves and then you’ve got council funded people who basically come on and get shown, “this is how much money the council is going to be contributing to you and you’ve got the option of topping it up or not”, then it does a budget management, so “you’ve got £150 a week to buy your care with, this is how much it’s going to be to do the order, yes that’s in your budget“ and automates all that. So if you’re a self-funder, by debit or credit card and if you’re council funded then the council picks up the bill.
Kunle: So the council prefunded and then they use it to actually buy on their portals. Interesting. Like an e-government portal, so to speak?
Ronald: It’s more like a buying club where the council has gone off and negotiated the prices for you and then you come off and buy. One of the challengers is the council quite often buys at less than half the price of a private individual. It’s understandable, a typical council spends 200 million on care. So as a supplier you’re “ok, they’ll pay me 200 million, you pay me 10k, I’m going to give a better price to them”.
Kunle: Definitely. So you’ve managed to onboard 1000 buyer so far. What about suppliers, how many suppliers are on the CloudBuy system as we speak?
Ronald: At the moment, in the UK there’s about 10 000. The big challenge we’ve got at the moment is we’re going through a bit of massive growth because we’ve extended out from the UK into the rest of the world, so we’ve got 55 000 suppliers to sign up next year.
Kunle: From what countries? You did mention India.
Ronald: We’ve got Hong-Kong, Singapore, India, Middle-Easts and Australian suppliers, but the big volume is actually Hong-Kong, Singapore, India and the Middle-Easts because what we found in those economies is that there’s very little B2B ecommerce, so pretty much all the suppliers are [inaudible: 0.28.17]. So there’s a big chance of signing them all up, so we’re actually doing a program working with local web designers. We basically do a partnership with a web designer, we refer the customer to the web designer, they do the design part. We’ve got two things that we can do for a web designer. One is they just need to agree on what the site’s going to look like with the customer, and then we can build it, it takes about two days to build the site if the designers’ gone off and create the design. Then you’ve got the chance of adding all the content to it, that depends of course, on what the format is, if it’s 200 000 items in a horrible catalogue format that’s held with the printer, it’s going to take a little bit longer. If it’s “we’ve already got it all in an electronic catalogue”, great. Usually, well-structured content, we can do a migration in a couple of weeks. We took every item the NHS brought on contract and that took us three weeks to bring in. That was initially half a million items across 700 suppliers. So if the data’s structured, we can do it very quickly, if it’s a manual mess, then obviously it takes longer.
Kunle: It will take longer for sure. I’m going to move onto the core of what all the listeners have been waiting for, which is what the title actually alludes to. If a B2B ecommerce e-tailer or a B2B business in procurement was listed and they’re a six or seven figure business looking to double in the coming year, in 2015, what tips would you give them to actually grow their business from now in January with a view for it to grow and double the business over the rest of the year?
Ronald: We’ve got quite a few examples where we’ve managed to get them ten times in Christmas sales, so I’ll give you 5 key tips. One, Go global. UK is a very small island and whilst it might be a reasonable sized economy, it’s Go global. We have people selling into every country in the world and there’s a lot of other places, if you take you dropdown list for countries, it doesn’t include places like South Ossetia, Crimea, and all these other places, there’s about 50 of those and they buy stuff as well, so Go global.
Kunle: When you say Go global , to me, just hop over the channel and go to France or the EU or would you suggest we go further afield like yourselves? You guys have been to Australia, South East Asia for typical B2B. Where is there growing opportunity? Where are the growing economies?
Ronald: The first bit is just put on your content onto the system. Someone can come on and build an ecommerce site using our CloudSell side of things and we find that those people usually sell ten times more than the ones that have got…
Kunle: Let’s talk about CloudSell. This is the first time you’re mentioning CloudSell. Could you shed more light on CloudSell?
Ronald: CloudSell is the sales side of the CloudBuy business. You’ve got CloudBuy where we try and represent the buyers and connect them up with the sellers, then CloudSell, we try to help our customers sell stuff.
Kunle: Through one marketplace or through numerous marketplaces?
Ronald: It’s a mixture of, we try and support them through every way they want to sell. If they’ve got a mixture of B2B, B2C, we’ll cover both, so we’ll provide them with a B2C site, we’ll provide them with a B2B site, we’ll integrate that site with all the different buyer ERP systems that the customers trade with, any marketplaces that are appropriate for them if they want to put stuff into Amazon, if they want to put stuff into Ebay, if they want to put stuff into Alibaba, if they want to put stuff into Mercado Libre.
Kunle: So you have ready made feeds for shops to help them pipe through their data and products on these marketplaces. Do you have any standalone marketplaces that compares to say Alibaba?
Ronald: Yes, we’ve got a mixture of things like we’re building the marketplace for the Federation of Indian Industry, we’ve got a major financial institution that’s going to be launching a marketplace in Hong-Kong, we’ve got similar things happening in Singapore and the Middle East.
Kunle: Ok, so listeners if you’re looking to go into India or Hong-Kong or Singapore, watch this space from CloudBuy because they are currently building platforms for you to sell onto these South Asian markets.
Ronald: My appeal is that we want more suppliers selling in these areas. Even if you don’t want to sell into those areas just now, we’re very happy to syndicate you into those areas to see if there’s any business for you. The other thing I’d say about going global is that one is the structure bit where we’ve said “right, we’re going to go into Singapore, we’re going to go here, we’re going to go there, we’re going to pick bits and places and support that”. The other thing is attracting people so that people from all over the world can come to you. We’ve had people from the US, Canada, Africa coming onto our website, liking what they see and signing up. Going global is making yourself available to the world.
Kunle: Ok. Not just on CloudBuy but looking at portals like Alibaba and Ratuken the Japanese one, you guys provide integration to these feeds if you’re on CloudBuy or CloudSell.
Ronald: Yes, that’s an option that’s been part of being on BuyCloud so that we’ll then push you out into these different places.
Kunle: What’s the typical cost of setting your catalogue up on CloudBuy?
Ronald: It’s really variable and depends on the size of the company. Our pricing is for a Professional site, which is the entry level $5000 a year, that’s roughly equivalent in functionality to Magneto Enterprise. Ten our Enterprise site is $20 000 a year, it’s got a chunk more functionality in there. Then we’ve got a Global 1000 which is aimed at the fortune 1000 of this world and that’s very much price on application. It competes more with something like IBM WebSphere, that allows you to have however many Enterprise sites you like. So if you’ve got 20 divisions and they’ve got tens of companies in each, they all have their own Enterprise site.
Kunle: This is all cloud based?
Ronald: Yes, all cloud based, and then goes to our organisation, so usually have a dozen ERPs at the backend. I was talking to one of the guys at GE Scot, I stand up both SAP and Oracle so if you’ve got either of those as the ERP, your business carries on with that because they’re buying and selling divisions all the time, and companies. Then if you’ve got another ERP system, you wither migrate to Oracle or SAP because they’re buying and selling companies at such a rate they’ve always got a transition of people that are migrating one way or the other way. Those huge conglomerates are empires in their own right.
Kunle: Thanks for that. So what’s number two tip for growing or doubling or tripling your B2B ecommerce business?
Ronald: Structured pricing. If you’re going to get it to scale up, you’ve got to have a simple pricing structure that people can sign up to and trade with you because we’ve been doing it for 15 years, we’ve seen every form of pricing possible. The typical thing we see is an organisation comes up at some point with “these are our 5 prices: mega customer, big customer, medium customer etc.” They may also have “this is our price list for this, our price list for this…”, then they go off and go “against the price list, we also have a discount list” and then they’ll have the sales guide gurus in and provide the special of this week, this month, whatever it takes to close the deal. There’s two sides to it, one is helping customers get profitable growth, if they want to, they can put in their Buy price and we can tell them all the items that they’re selling at a loss, which is an important thing. If you’re selling at a loss, you want to know why, “the customer said this, this is the leader that we’re doing…”
Kunle: Does that come in real time when they’re setting their price?
Ronald: Yes. We can provide them with a rule that doesn’t allow them to sell at a loss, or that gets somebody to approve them selling at a loss. It doesn’t just happen where somebody just goes “I’m going to give them the best price list and I’m going to give them the best discount list”.
Kunle: Are you claiming that it’s profitable or not?
Ronald: That structure pricing, you need to have your pricing right and it needs to change by market because there’s different markets in the world and you need to be aware of how you’re selling the different bits and all the rest of it, so get your pricing right.
Kunle: What about number three?
Ronald: It’s quality content and making sure it’s up to date. We’ve seen people that have pushed stuff straight out of SAP with 40 character uppercase descriptions and wondered why it didn’t sell. The other bit is making sure that the systems are joined up. The classic thing we see is the website not joined to the ERP. So you’ve got a website, you’ve got an SAP system, you order off the website and the invoice comes in at a different price. It’s got to be integrated. We make sure that the content’s right and up to date, the pricing’s right and up to date and it’s providing rich content, that’s where people underinvest, they don’t understand that rather than be worse than a B2C site, a B2B site needs to be better. If you’re buying something like an apple, we know what an apple is, it’s a Royal Gala apple, you know what it is, you don’t need to give them a 50 page description on it. Do you know what a printer blanket is?
Kunle: No I don’t.
Ronald: If I told you that they’re somewhere in the thousands of pounds and you buy them every few days. It’s basically the thing that a newspaper print run goes on. The thing about it is you might think that a printer blanket is something that you put over your desktop printer when it’s not being used. But it’s actually an industrial consumable and it has a whole load of specs and complexity that goes around it. In that B2B space, there’s lots of stuff where you actually need to get across the points as to why your printer blankets will last 5 times longer than the other guys and why it’s better value although it’s a higher price and all that stuff is important to sell. That leads me on to the next point which is SEO and web marketing.
Kunle: So why would B2B businesses want to do SEO?
Ronald: They can do really well on SEO because the competition is rubbish quite often. If somebody’s gone off and loaded 40 character uppercase to it, it’s pretty easy to beat that in terms of SEO. The content and the SEO are quite liked together. We do things like content syndication where we’ll put on all your suppliers, get hem building ecommerce sites, get them managing the content, you then do the editorial control of them so that you can control something like 100 000 or 600 000 items and get that flowing up into your site and having high quality content and then you focus on the top selling items. The thing with SEO is that in a B2C environment, most common commodity items, like a monitor, there’s hundreds of people competing in your area selling monitors and so it’s very difficult to distinguish yourselves on the SEO point of view. If you’re going off and selling a billion different antibodies, frankly the others have got a range of 20 000 antibodies, you’ve got 2 billion things that you can talk about an be unique
Kunle: Exactly. There aren’t that many people selling antibodies in a first facing.
Ronald: Yeah. Having decent content for the bits where you’re not competing with everybody, suddenly, that’s why I come back to go global is we see people because they’ve put the content online and nobody else is competing with it, suddenly people come straight to them because they go “I didn’t know I could buy that”.
Kunle: Connecting this point with the going global, do you not add another layer of complexity when it comes to multilingual or going to new regions, having to retranslate your entire catalogue.
Ronald: Yes, we’re just going through the hell of making sure that everybody’s content works fine in traditional and simplified Chinese, but we are very lucky in the UK, English is a common business language. If you put the stuff up in English, most people will look for it in English even if they happen to be in Hong-Kong or India. There’s 9 major languages spoken by hundreds of people in India, but the common business language in India is English. As a first point, you don’t need to translate all your stuff into all those different languages. The other thing we can do to support you in going global is you can put it all up in English and for those other countries, you’re going to need resellers and they can do the translation and we can provide the platform for them to resell and put the translations in and it automatically connects into them. So there’s a lot of things we can do to help that global process, but content up to date, attractive, accurate content will drive your SEO and your web marketing. We doubled the straight forward bits of how to make SEO work. The biggest challenge in SEO is making sure that you’ve got attractive content. That’s where you get into all that web marketing, social media, in band feeds and all the rest of it that you’re doing in a B2C environment because it’s ultra-competitive. You end up in trying to get lots more regularly refreshed content which, if you’re selling a printer cartridge, is challenging because all the other guys are selling the exact same printer cartridge. It’s very easy in that B2C environment to go over the edge and break the enriched rules of SEO and get blacklisted because everyone’s pushing the margins. Whereas in the B2B space, it’s just making sure that your content is up to date, attractive etc. can bring you a lot of business.
Kunle: Absolutely. I agree with you. I’ve worked with B2B ecommerce clients and just unique content give them the competitive edge, they cleaned up the legacy and product descriptions off the suppliers and manufacturers who supplied them the product description and they put really catchy useful content and they made strides getting a lot of the products to rank highly.
Ronald: It’s a simple thing such as having a multi tab layout for the products you got. From a consumer point of view, you whack your keyboards into Google, you come up with a site, you hit the first site, you understand it, hit the next site, there’s an expectation that sites load quickly and they’re easy to understand. In the B2B space, you’ve just got to do exactly the same thing, get the key points across in an easy to view way and provide the extra value so that you can say that this product is 5 times better, but then you’ve got to have the technical details that explain why it’s 5 times better and what it does different, what the difference between USB 2.0 and USB 3.0 is. All that stuff helps your keywords.
Kunle: Ok. So what’s your fifth and final tip for growing B2B ecommerce?
Ronald: It’s winning deals. If you’ve managed to do the going global, getting your content up to date, your SEO and web marketing, that’s going to help you getting more deals because the larger organisations are going to want to basically bid for business, because if they’re going to spend a lot of money with you, they’re going to put out a tender to say “buying 5 million pounds worth of X”. If you’ve got all your content right etc., you will get that tender because they will send it to you and they may well contact you before they write the tender so you can write the tender. The most important thing in B2B tender is getting in early and having a good website helps get you in early. Then you go off into what can your system do? We then support all the things that ensure you win the deal which is “they’re on SAP, this system’s already pre-integrated to SAP, has been doing this for 10 years”, that’s a nice safe tick box because they’ll be very worried because SAP can be difficult to integrate, that you won’t be able to integrate with their own system. Can you send electronic invoices in their format? Yes, good. It’s ticking all those boxes and then there’s the actual business of supplying your product and we’ve got a lot of people who we’ve worked with over the years who can help you with writing tenders and all that side of things.
Kunle: People like who?
Ronald: All the suppliers since the UK government. There’s thousands of them. The 10 000 businesses we’ve already worked with, they know what works for them and it’s how you package that up.
Kunle: You said that organisations help you write the tenders?
Ronald: One of the marketplaces we run is a system for small businesses, so the UK Plc helped this one. That’s a collaboration between ourselves and Apsiz, run by someone called David Shields who is chief executive of Government Procurement Service. He ran the organisation that did all the buying for the UK government and his team know what a winning bid looks like because they’ve evaluated lots of them.
Kunle: Interesting. Thank you so much for the B2B tips. I’ll go to the final round of questions to round this interview up which has been fantastic by the way. How does CloudBuy actually generate revenue?
Ronald: I’m very pleased with some changes we made. We started off with selling ecommerce sites to suppliers, then we went into selling buying systems to buyers and now we do a bit of both. We provide buying systems for buyers, connect them through and then either provide connectivity toolkits so if you’ve got Magento, we’ve got a toolkit to connect you in, or ecommerce sites to the suppliers. We’re taking a bit of all of that and then the bit that’s changing is that we’re starting to build more marketplaces of our own. You talked about Amazon Supply, if you’re selling on Amazon and you’re a direct supplier to Amazon we provide systems for some of those guys and I just talked to one who pays 25%, which sounds ok, then he pays another 10% on top of that, plus another 5%, so it actually ends up as 40%.
Kunle: Per transaction?
Ronald: Yes, per transaction. That’s a direct supplier to Amazon so we don’t know who they are because as far as we’re concerned, we just buy it from Amazon. That’s one level, then you’ve got the Amazon marketplace which goes from 7-25% you pay as a supplier on there. On that side of things, we’re looking at charging 2-5%. Something like ukplc.biz site, we charge suppliers 2-5% to be on that. When you go off into B2B procurement, you’re looking at sub 1%, something around 0.2%-0.5%.
Kunle: The average basket size I assume would be quite high.
Ronald: If you’ve gone off and let a contract 20 million pass over the supplier, you’re not going to pay an intermediate 10% or something. There’s not room for massive savings there. What we usually find is that when we take a world class organisation, like say UK NHS, we identify 2 billion of savings for them, that’s 2% off saving, that’s in our organisation, if we can find a 2% saving, we’d actually charge the buyer something like 0.2%, so 1/10 of the saving to run that through. So they’re getting a good thing and the buyer’s actually paying the fees so there’s no fees to suppliers. For large volume stuff, it’s the buyer who pays the fees.
Kunle: Which is a good thing to support and nurture your supplier base.
Ronald: From our point of view, we’re there to act as a neutral intermediary and support both sides. If we bring a supplier a new business, we’ll charge them 2-5% for business they wouldn’t have got otherwise. If it’s an existing customer and, it’s basically the buyer that’s engaging with us to do it, we normally wouldn’t charge the supplier. It’s quite flexible that way.
Kunle: Could you give us an idea of the figures, in terms of the amount of transactions that passed through your system in 2014?
Ronald: I told you this, we analysed a total figure of 250 billion dollars. I think we’re somewhere around 20 million page views. We don’t go into the actual volume of stuff going through the system normally.
Kunle: Is it in the billions?
Ronald: Yes.
Kunle: Two figure billions or single figure billions?
Ronald: Multiple. The science of the B2B market is last time Visa surveyed it, it was 109 trillion.
Kunle: Enormous.
Ronald: Whatever we’ve got is very small compared with where it’s going to end up because B2B total volume globally is around about 1-2 trillion going through electronically, so about 1-2% going through electronically. 98-99% is still not electronic.
Kunle: Ok, and you’re looking to disrupt that and get more electronic transactions with your platform.
Ronald: Our partnership with Visa is trying to get a good chunk of that 100 trillion and it’s all there to be played for us. The UK is probably the most developed economy in the world in terms of ecommerce. We found something like one of the biggest industries in the UK is social care and what we found in there was 100% of suppliers did not have ecommerce. None of the providers had ecommerce. If you think about it, a care provider, you’re going off and bringing someone in to provide home care. I’ve not found any of them so far that have an ecommerce site where you could buy your home care online and pay for it, until we started building. We build over 1000 sites like that last year.
Kunle: Ok. What’s turnover and gross profit like in 2014 for CloudBuy?
Ronald: We’ve not yet published our results for 2014, but I can tell you what it was for 2013 and it was 3 million from 2.3 million. The challenge we had was that we changed our name from UK Plc to CloudBuy for a reason, because we were going out of the UK. Our UK business model was something where we had no transaction charges whatsoever, so we had a flat fee where we charged, say the UK government £30 000 a year to run the system, we then provided free ecommerce sites to all the suppliers and so we didn’t make a lot of revenue. This summer we signed our first marketplace customer in Australia and that’s worth roughly £4500 a year to us because there’s a small transaction fee being paid by the buyer and so that changes everything, that customer would’ve been charged 30k on the old model.
Kunle: Interesting how small changes actually yield big results. You could essentially more than double your business or your business could grow by 5-10x in 2015.
Ronald: That’s why I came back to go global.
Kunle: Absolutely.
Ronald: Our experience is that we’ve got something like 150 million dollars a year in the pipeline of stuff we signed up last year.
Kunle: You’re waiting to reap the benefits of that in 2015, and perhaps 2014. Interesting stuff. I’m just going to round up with a final set of questions. You’ve mentioned what your next fees are going to be. What is one marketing channel you advise would be ecommerce entrepreneurs should take seriously? If it was just one marketing channel you could choose, what should they really focus on?
Ronald: Get your content right.
Kunle: Content. Product content. Content on your website. Speak to clients through content on your website. Fantastic. What about tools and books and resources you’d suggest, particularly B2B ecommerce and businesses to reach, are there any resources or books? Let’s start with resources. Are there any resources that you check on a regular basis like websites or even podcasts for them to consume on a regular basis, as you do?
Ronald: We work pretty closely with our set of partners, Visa, the banks. I have to admit, personally I’m not very good on resources, books and tools. What I’m usually doing is listening to our customers and finding out what’s working for them, what we need to do to change and support them. I’d say listen to your customers and follow them.
Kunle: Listen to your customers and follow them. That’s brilliant advice. My last question is if our listeners wanted to get in touch with you, what would be the best way to get in touch with you? Are you on social media or are you an email person?
Ronald: You can reach me through LinkedIn. I have to admit I don’t go onto it very often. The best way is coming through the cloud sales site if you’re inspired by the CloudBuy site, if you’re a buyer. I give my phone number and get lots of emails from customers. I like talking to customers, it’s what helps our business do stuff. The result of this is that I get absolutely snowed down with emails. My advice is very simple in terms of emailing me, if you CC me, it goes off into a separate bin, if you email me directly I do get it, but you’ll go into a big collection. If it’s urgent, people text or phone me or get somebody to walk round and tell me about it. It’s one of those classic challenges of easy communication sometimes makes it harder because you end up with so much stuff coming through. The key thing is understanding what we need to make our customers more profitable. We’ve made a bunch of customers into millionaires and we’d like to make some more.
Kunle: Good stuff. Thank you so much for making it onto the show Ronald. I’m quite sure a lot of our listeners would have found a lot of what you said very useful and wish you the best with CloudBuy in 2015 and thanks again.
Ronald: It’s been a pleasure. There’s a huge amount of stuff you can do to optimise both B2C and B2B and we just like helping customers to be successful.
Kunle: Thanks, bye.
Ronald: Bye.

About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

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