👋 Hello great people of the D2C Community! This is your host Berkay writing.
Today, we’re going to talk to Bahadir Efeoglu (BE) , co-founder of our beloved partner and sponsor Fabrikatör Inventory Management , about inventory management and how it could positively affect your growth strategy!
So without further ado, let’s get started with our interview!
And hey, if you're looking for ways to grow your DTC business, also check out our collab growth guideline here !
🧑💻 A quick intro to Fabrikatör Let’s start our interview with a quick introduction to Bahadir and his co-founder Demirhan !
DTC Background Bahadir, tell us more about yourself!
BE: Hi, so a quick intro… At the crossroads of DTC expertise and software development, my co-founder and I bring a unique blend of skills to the table.
Having served as a digital product manager at Marley Spoon , my focus was on crafting a digital customer experience seamlessly integrated with the supply chain and operations of an international public company.
On the other side, my co-founder made an early impact at Parachute , contributing to the creation of the Turkish market's equivalent of Quickbooks . His software building prowess, coupled with my insights from the dynamic world of DTC, forms the ideal combination.
Together, we are driven by the vision of developing an innovative solution to address the needs of an underserved market, paving the way for something truly groundbreaking.
VIDEO
Bahadir appears on many podcast episodes. I just watched his interview at Honest Ecommerce and really liked his insights! Check it out!
📦 Fabrikatör - Inventory Management Tool for Shopify Merchants Tell us more about Fabrikatör!
BE: We've transformed inventory planning for direct-to-consumer brands, making it growth-driven and streamlined. Our unique edge? Unlike most inventory software, Fabrikatör synergizes your CRM, storefront, and warehouse, offering an operational roadmap tailored to your growth goals.
So, Fabrikatör assists you in making better inventory decisions for your store by:
Streamlining operations Maximizing profits by forecasting demand Automating pre-orders Ensuring customer satisfaction by integrating your supply chain with your Shopify storefront and Klaviyo.
Fabrikatör's dashboard
🧐 Other inventory management tools vs. Fabrikatör How does Fabrikatör differentiate itself from competitors?
BE: Most ERP and inventory-related solutions are built for the businesses of the old world. Fabrikatör is built for modern DTC brands who needs to balance their capital between generating demand and supplying goods for meeting that demand.
Fabrikatör is designed with DTC founders in mind, who are spread thin across various tasks and don’t have time to earn a supply chain degree. That’s why we designed it in the easiest way possible.
As a result, it takes 30 minutes to onboard any brand to Fabrikatör!
Other solutions are usually working in the shadows as a back office tool. At Fabrikatör, we didn’t shy away from taking responsibility for improving conversion rate and revenue. That’s why we built features like backorder automation which modifies the storefront and integrates with Klaviyo to enhance the shopping experience which drives higher revenue.
You can manage your purchase orders on Fabrikatör! Details of a purchase order 💻 AI in Inventory Forecasting Do you use AI models in your forecasting?
BE: At Fabrikatör, we prioritize substance over buzzwords. The term 'AI' is often used to embellish the value of software products, but we believe in keeping technology straightforward and functional. Our focus is on delivering effective solutions, not on the labels of the technologies we use.
That said, to directly address your question, Fabrikatör employs a more statistical approach in our algorithms rather than what many would term 'AI'. We stand by the principle that the effectiveness of a solution shouldn't be clouded by the complexity of its technology. Whether through statistical models or AI, our goal remains the same: to efficiently solve the inventory planning challenges our users face.
👀 The Future of Ecommerce - Challenges Ahead With the ongoing challenge of rising costs, inventory optimization appears to be one of the most important tasks for any DTC business out there. So what problems does Bahadir expect DTC brands to face in the coming years and how does Fabrikatör offer a solution to those challenges?
Ecommerce Challenges What are the challenges ahead of DTCs in the next years?
BE: There are 3 main challenges I expect DTC brands to face.
Higher Costs-per-Click (CPCs): Higher costs-per-click refers to the amount of money advertisers pay for each click on their ads. This is happening for several reasons, including:Increased competition: When more advertisers are bidding for the same keywords, it drives up the cost-per-click.Ad placement: Ads placed in more prominent positions on search engine results pages (SERPs) tend to have higher CPCs.and more…
My advice: In my view, you can’t really lower CPCs but you can increase your ROI by increasing conversion rates.
Higher logistics costs → Higher logistics costs can negatively impact a company's profitability and competitiveness. My advice: Split your shipments between air and ocean freight to save costs.
3. Lower margins → Because of the increasing costs, companies have to work with lower margins now. And it might get worse given the current conditions.
My Advice: Identify products that may increase your AOV to improve your bottom line and also go back to the previous 2 points to improve margins.
How does Fabrikatör help? How could Fabrikatör help businesses deal with these challenges?
Higher CPCs → Fabrikatör improves your conversion rate by increasing your stock availability and offering pre-orders .
Higher logistics costs → Fabrikatör’s freight planning feature allows you to split your shipments between air and ocean freight to reduce unnecessary costs.
Lower margins → By calculating the margins, combined with sales performances, Fabrikatör allows you to focus on the highest return products first.
Peak times like Black Friday or Christmas In what ways can DTC brands use Fabrikatör before, during, and after peak seasons, like Black Friday or Christmas?
DTC brands can strategically leverage Fabrikatör in various stages surrounding peak seasons, such as Black Friday or Christmas.
Before the peak season hits, Fabrikatör becomes a powerful ally for forecasting and procurement. The platform's capabilities enable brands to analyze historical data, predict demand trends, and ensure optimal stock levels, setting the stage for a seamless and well-prepared inventory management approach.
During the peak season, Fabrikatör serves as a safety net with its backorders feature, allowing brands to efficiently recover potentially lost sales by managing orders beyond current stock availability.
After the peak season subsides, the platform continues to play a vital role by facilitating in-depth analysis and aiding in deadstock clearance. This post-season analysis helps DTC brands make informed decisions for future inventory management strategies, optimizing efficiency and maximizing returns on investment.
So, to summarize:
Before: Forecasting and procurement
During: Backorders as a safety net (recovering lost sales)
After: Analysis and deadstock clearance
Hey, check out our Peak Season Playbook and Black Friday Countdown Checklist for conquering the peak seasons!
💪 Ecommerce Inventory Management After talking to many DTC entrepreneurs and consulting them about their inventory management strategies, Bahadir accumulated a wealth of knowledge on how to optimize your company’s inventory management.
Tips for Successful Inventory Management What are some tips that you can give for successful inventory management?
BE: Inventory is not a problem of tomorrow. Don’t postpone building your inventory strategy, it is the fuel of your business. Invest in good supply chain practices that will take you to your next million in sales.
In the early days “Do things don’t scale” as Paul Graham said. But don’t be too late to automate as you are scaling up, otherwise, you would be running on a treadmill.
Look into the practices you have been doing for so long and try to refine them.
Use AI, use process automation but do something to buy more time!
As much as we do our best to bring more visibility to supply operations, we know that the supply chain can be unstable. That’s why I advise everyone to have a plan B, let it be a backorder strategy or working with backup suppliers and freight methods.
📈 DTC Trends What are some rising trends in the DTC world and how will Fabrikatör respond to those trends?
BE: As you know, Shopify announced Sidekick as their latest AI feature to support merchants with their daily tasks. This has been something that we wanted to offer for so long because our main motto is to become the “virtual head of operations” for eCommerce companies.
That’s why we are heavily investing in LLM solutions to position Fabrikatör as the virtual head of ops with whom you can talk, ask, and get answers just like you would do with your human colleagues.
Integration with Emerging Platforms: While Shopify remains a significant platform, there are emerging platforms and tools in the DTC space. Our goal is to place Fabrikatör at the center of operations and we will achieve this by integrating with platforms in finance and logistics.
Sustainability Initiatives: We recognize the growing importance of sustainable and ethical supply chain practices. Fabrikatör will soon introduce features that help brands minimize waste, optimize resources, and make more informed, eco-friendly decisions. Eg. choosing less CO2 freight methods.
Shipping: I've read this blog post on your website about Izzy's - Founder of Portless 3PL - views on the future of DTC shipping . I suggest it as a short reading to everyone!
If you want to try out Fabrikatör, you can do start your free-trial for 14-days today! Just sign up using this link !
If you're a Shopify app builder, we think you could also like these:
Shopify App Growth Strategies in 2023: Stephanie Menjivar from Showday
Everything you need to know about Shopify App Store Marketing in 2023: Krissie Claire from Kollectify
Future of Shopify app development: Dario Galbiati Alborghetti from Showday
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