KARRICO

Working with Cin7 and SMB Consultants allowed KARRICO to successfully expand into new sales channels in the U.S. market while managing everything remotely from a different time zone in Australia.

Searching for the right technology

KARRICO’s existing business in Australia was heavily focused on product design and development. Julian Grant, GM of Commercial Operations for KARRICO Inc.’s parent company, Grant Studios, explains that prior to the expansion his team didn’t have to manage stock, handle logistics, or project sales demand.

That said, Julian knew expanding into the U.S. would involve increasing their capabilities to include inventory and logistics management.

However, he wanted to ensure that the company’s growth didn’t overburden his existing team, which was already inundated with work. As such, Julian knew being proactive about finding the right technology partners was crucial.

Without the right software and implementation, he explains, “You just end up creating more work manually…We needed to make sure we didn’t add too much stress to the business we have right now.”

Julian’s introduction to Jeff Atizado, the CEO of SMB Consultants, was facilitated by The Hope Factory, the agency responsible for designing and building KARRICO’s Shopify site. This meeting was pivotal for Julian, as it offered an opportunity to collaborate with Jeff in finding the ideal inventory solution for KARRICO, ensuring its effective implementation and optimization. KARRICO’s needs included:

  • An impressive 3PL system
  • Support for eCommerce platforms including Amazon and Shopify
  • Features that enable seamless automation

KARRICO also wanted software that could handle a diverse bill of materials and accurately calculate the cost of their products.

After meeting with Julian, Jeff recommended Cin7 Omni as the comprehensive inventory solution to empower KARRICO to grow without additional manual work.

Implementing a centralized business hub

Cin7 Omni proved to be a powerful solution that could handle KARRICO’s new 3PL integrations, easily calculate diverse costs, and generate precise figures for freight costs and volumes, enabling KARRICO to use accurate business data to inform their decisions.

During the implementation and execution process, Julian found that the key to success was the combination of Cin7 Omni’s well-integrated platform and the guidance he received from SMB Consultants.

Working with SMB Consultants allowed KARRICO to get their new inventory implementation right the first time and realize the value of Cin7 faster than they would have on their own.

“We didn’t know what we didn’t know,” says Julian. He goes on to explain that SMB Consultants “helped navigate us through the best way to achieve what we were trying to achieve through the software and help us configure those workflows. That was critical to us.”

With a custom Cin7 Omni integration enabled by SMB Consultants, KARRICO can operate with a centralized hub, transferring stock to different fulfillment centers and getting live inventory updates. That let them manage the new business remotely from Australia and sleep soundly, trusting Cin7 to keep inventory running smoothly at the U.S. warehouses.

“Having really sophisticated software and being able to basically key orders directly from Australia in our own time, and manage all branch transfers and workflows is absolutely critical since we don’t have a lot of crossover time with our fulfillment centers and with our warehouse,” says Julian.

Enjoying the benefits of a sophisticated solution

One of the main benefits of Cin7 Omni is the high level of customization it offers. With Cin7, KARRICO was able to tailor their tech stack to fit a sophisticated logistics model and enable smooth operations.

Julian cites SMB Consultants as critical for helping KARRICO understand the capabilities of software like Cin7 and tailor it to “optimize workflows…and optimize the goals and the value that you’re going to get out of that system.”

“Because the workflow had to deal with lots of different elements to that calculation like customs duties and tariffs, but also at the same time managing the volumetric size of the products that we were shipping and factoring that into the calculation, we were asking a lot. To have that expert knowledge from SMB Consultants to design that workflow has been incredible,” explains Julian.

When asked about Cin7 Omni, Julian noted, “It’s so feature-rich and has such brilliant architecture and integration capabilities that are open to do whatever it is that you want to achieve out of the system.”

Looking forward, Julian sees even more potential working with Cin7 and SMB Consultants, explaining that “As the business grows, we want to implement more and more features and solutions… We see it as a critical partnership that’s ongoing.”

Enabling growth now and into the future

Put simply, the Cin7 Omni solution and partnership with SMB Consultants is what enabled KARRICO to grow. “If we didn’t have this system, we wouldn’t be able to scale,” says Julian.

What’s amazing to Julian is how Cin7 Omni and SMB Consultants worked with him to achieve his goal of scaling the business without adding extra manual work. Julian says, “We haven’t added any staff at all to manage this new business…which is a completely new venture in a new country, a completely new business model that we’ve never done before.”

KARRICO can maximize its supply chain and margins and automate operations for less stress and better results. As Julian puts it, “This has given us the confidence to scale and not to worry about whether we’ll be able to handle the growth.”

If you’re ready to scale your business and enable seamless growth today, explore Cin7 Omni.

Royal Essence

Great tech and great advice are the reasons why most product sellers can’t hold a candle to Royal Essence

There’s not really any such thing as overnight success. Most of what people perceive as “overnight” achievement is actually a combination of hard work, learning, great advice, and good fortune, sustained over a long time.

But, with that said, when all the right ingredients come together, sometimes the speed of success can be truly staggering.

Paul and Hannah Chamberlain, founders of Royal Essence, know all about the dizzying acceleration that happens when everything lines up just right. Together, the husband-and-wife team have taken a brand that they jokingly call “Kinder Surprise for women” from their garage to a seven-figure international ecommerce business in just a few years.

But, unlike a lot of ecommerce sellers, things were pretty big for Royal Essence right from the start.

“We did a million in our first year, and we’ve averaged 150 percent growth year on year since then,” says Paul.

How did they manage what so many haven’t? For Royal Essence, it started with a great idea, but they’ve managed to sustain their success thanks to trustworthy partnerships, talented advisors – and great inventory management with Cin7 Core.

 

Lighting up social media leads to burning the candle at both ends

Royal Essence’s product is tailor-made for the age of memes, social media influencers, and the rise of Tik-Tok.

They sell mainly scented candles and bath bombs, with a unique twist: each comes with a very welcome jewellery surprise inside — which can be worth anything from $90 to $5000.

Paul and Hannah came up with the idea for Royal Essence when Paul was working as an ecommerce marketing director.

“I’m always trying little side hustles. I saw this one, and no-one was doing it well. I made a few candles in the garage while Hannah was away on holiday, and sent her a photo,” Paul says.

“She thought, ‘Okay, another crazy idea, here we go again.’ But then it took off, basically immediately.”

Hannah says that the results of the first ads they placed for their first tiny batch of candles were incredibly encouraging, but even better was the reaction on social media, where the product was an immediate viral hit.

“We had a pre-sale that ran for two weeks, and the number of orders was just ridiculous. And suddenly I had to make maybe thousands of candles, in that short amount of time.”

“The first six months, we were just trying to keep up. We’d be up at 2 AM pouring candles in the freezing winter,” Paul adds. But it was well worth it. In the first month, they made $10k. Month two was $19K. By the six-month mark, Paul and Hannah’s garage business was making an incredible $70,000 in monthly revenue.

@emmayeyah

these candles are so cool! #royalessence #royalessencecandle #foryou #21st #birthday #2021 #nz #foryoupage

♬ Sunny Day – Ted Fresco

“Paul had a full-time job, so it was basically all me!” Hannah says. “And I was working at a fish-and-chip shop at the same time, two days a week, and did wedding photography on the weekend, so it was pretty full on.”

Adding to the toll taken on their personal lives was the fact that their sheer sales volume meant they suddenly had an enormous inventory to manage — and no good way to do it.

“We had no idea. We were just starting the business. We were completely lost as to how inventory even works,” Paul says.

After a year of struggling with spreadsheets and guesstimates, things came to a head. For the business to keep growing, and for Paul and Hannah to spend less time in the daily grind, they needed an effective inventory management solution.

 

Instant wins from Cin7 Core

All the best success stories start on the shoulders of giants. For Paul, an important mentor was his former boss, who had encouraged him in his side-hustle and now helped as he transitioned to making Royal Essence his and Hannah’s full-time living.

“He’s a good guy. He loves anyone who gets into business,” Paul says of his mentor. “I stayed for a couple of months, while he figured out someone else for my position, and he helped me out. He recommended a Cin7 Core consultant in Adelaide to help us get set up.”

Paul and Hannah’s consultant helped them migrate their data from spreadsheets and made sure their starting inventory information was correct from the start. Right away, Royal Essence felt the impact of accurate inventory tracking. Things that had been excruciatingly difficult — like reordering in time for the next batch of production — were suddenly easy.

“Before Cin7 Core, I was always just guessing – the number of boxes in front of me, what’s going to be used for production that day,” Hannah says. “After Cin7 Core, the instant win for us was we were able to see the big picture. You can definitely see the movement of the raw materials, and I was able to do our reorders in time. That’s a really big thing for a small business, especially because during that time we were growing so fast.”

With Cin7 Core implemented and day-to-day inventory tracking enabled, things were already much better. But that’s only a fraction of Cin7 Core’s capability. For Hannah and Paul’s burgeoning ecommerce business, now selling all over the world, they needed to be able to track inventory on the financial side. For that, they needed a specialist ecommerce accounting partner, and that’s how they found Bean Ninjas.

 

Fast and agile ecommerce accounting

Bean Ninjas is an e-commerce specialty accounting firm, with a very clearly defined target market — seven-figure-plus ecommerce companies. “We consider ourselves tax agents and accountants, but there’s a big advisory piece as well,” director Tracey Newman says.

Ecommerce businesses that sell in multiple markets have a lot of considerations that other businesses don’t, Tracey explains. Merchants charge varying fees depending where the business is located, and the tax compliance requirements can be enormously complex. And when inventory isn’t being tracked accurately, the accounting falls apart. Sellers, already buried under enormous workloads, find themselves faced with compliance and logistics challenges that are impossible to work through themselves. Then, as they try to grow, they’ll often find that cashflow runs short, and banks won’t lend to them because the financial picture isn’t clear. That’s where Bean Ninjas come in.

“Very commonly, successful ecommerce sellers are husbands and wives, or friends, who work out of their own houses. They haven’t really had an opportunity to get data like benchmarking, or advisory services, and there seems to be a big uptake for that all-around advice,” Tracey says.

“One of the things I say to my clients when I’m recommending Cin7 Core is that I really like how Cin7 Core takes a focus on balance sheet, as well as on profit and loss,” Tracey says. “Very few other inventory solutions do that.”

For Royal Essence, Bean Ninjas were able to help on multiple fronts. Using Cin7 Core as the single source of truth for inventory meant that everything could be lined up correctly in Royal Essence’s accounting system of record, Xero.

With Bean Ninjas advising, Royal Essence moved their manufacturing operations overseas, which massively increased their gross margins. With banks now eager to lend, they had the operating capital to expand their ecommerce operations to the UK and Europe.

“Where Cin7 Core really helps these days is with multiple channels, and syncing locations, and ensuring that our accounting is nice and up to date,” Paul says. “We don’t have to stress at the end of the year because our books aren’t correct and we have to spend a month going through it all. Instead, it’s all up to the accountant.”

What’s more, Royal Essence could track their product through every stage of production and sales: from manufacturing, to freighting and landing, to selling and shipping. The increased transparency and reduced workload meant they could grow — and so they did.

 

End-to end transparency: Cin7 Core tracks inventory from production through to sales and shipping

Transparency is the key that unlocks growth for many product sellers. Being able to see what’s happening, and how much it all costs, during all stages of the product life cycle means sellers know exactly how to optimize their supply chain.

Royal Essence has a simple product, with a complex product journey. Materials are sourced from overseas suppliers, and then combined in a different manufacturing facility. From there, the goods are freighted to third-party logistics (3PL) warehouses around the world, where customer orders are processed and shipped.

“It starts from making a purchase order from our two suppliers — the supplier of the actual product, and the supplier of the jewelry,” Hannah says. “Then it goes to be manufactured, and Cin7 Core shows that picture for us. Then it’s assembled, and it even shows when they’re in the container, so we know there’s stock on the water, on the way.”

This entire process is in Cin7 Core, so inventory is always up-to-date. Whenever raw materials are purchased, this is noted in Cin7 Core. When these components go to manufacturing, they’re virtually assembled in Cin7 Core as well, becoming the finished product.

“That helps a lot,” Hannah says. “You can see how much the raw materials cost, and the cost per finished item.We get visibility on exchange rates, so when the product is cheaper to buy, and profit margins on raw materials. We can even see, across different locations in three continents, how much we have, or how much is arriving.”

This visibility means that, unlike many ecommerce companies without a good view of cashflow, the business knows exactly how much it can spend on getting new customers in the door with Paul’s specialty subject: marketing.

“It dictates how much I can spend on marketing, basically,” Paul says. “I need to know what our cost of goods is, what our gross margin is, in order to know how much I can spend. Having the data from Cin7 Core means I can focus on sales, and marketing, and getting more customers in the door.”

@megan00jay

£3000 ring reveal bath crumble!! #fyp #foryou #JDAirMaxYourWay #bathbomb #bathtok #viral #royalessence #imperialcandles #LiftYourDream #reveal #bath

♬ Lofi – Domknowz

 

Cin7 Core’s 3PL sync is the secret to rapid scale

Cin7 Core continues to offer full transparency and visibility even as goods are landed in their destination countries and taken to 3PL warehouses. They’ve got a 3PL in Sydney, which takes care of the Australian market (which still accounts for 70 percent of their business) another in Pennsylvania that serves the US and Canadian markets, and two in the UK.

“When it arrives in our 3PL, our 3PL receives it, and it syncs to Cin7 Core that they’ve received it,” Hannah says. “So we can see the inventory in all different places — some is being manufactured overseas, some is on the water, and some is ready to be sold to consumers.”

The whole system provides an incredible snapshot of a business in motion, Royal Essence says. “Being a numbers guy, I personally love seeing those landed costs, because it’s so hard to calculate without Cin7 Core,” Paul says. “It’s so good that you can just jump into Cin7 Core, search the SKU, and just see it there.”

The system also keeps pace with customer orders, enabling swift and hassle-free fulfilment. As stock is shipped to customers, the 3PLs sync their inventory with Cin7 Core, daily. They also manage stock adjustments when necessary, making time-consuming, laborious manual stock counts a thing of the past.

“I couldn’t stand doing stock-take,” Paul says. “It felt like a waste of time — often just to find out we’d miscounted! It’s so good having someone else do all that for us, and we just do an auto-sync through Cin7 Core.”

This is the secret to rapid scale, Paul and Hannah says. They have the marketing, personnel, and other systems set up, and entering a new market is almost as easy as CtrlC + CtrlV.

“It’s 100 percent repeatable,” Paul says. “We’ve already proven that a couple of times. And we’re about to do it again in the EU, so we’re looking at setting up another 3PL in the Netherlands. We’ve done it before, it’s the same process. We’ve got a team that knows how to use Cin7 Core, and it’s just a matter of copy and paste from here.”

@royalessenceco

What a perfect way to end your bath 🤩 @itskatematee #royalessence #bath #surprise #ringcandle #reveal

♬ Sunny Day – Ted Fresco

 

The transparency provided by Cin7 Core is the jewel in Royal Essence’s crown

With Cin7 Core powering their inventory and acting as the single source of truth for every business process from manufacturing to shipping, Royal Essence has been able to hit milestone after milestone. Even the Covid-19 pandemic, which spelled doom for many product sellers who weren’t ready to move online, didn’t disrupt their momentum. In fact, it boosted their sales by up to 40 percent.

“We feel very lucky. I know a lot of businesses struggled through COVID, but we just got an uplift in sales,” Paul says. “I think everyone was at home and didn’t know what to do with their time and money, so they decided to buy some candles with jewelry in them.”

Paul and Hannah have now set their sites on a number of new markets, aiming to repeat and refine their proven business process in each. Cin7 Core has even enabled them to automate some selling on Amazon, a notoriously tricky platform for ecommerce sellers, but one that offers enormous rewards to those that master it.

“The thing with having software like Cin7 Core — because the UI is so straightforward and simple, it lays it out in front of you as to how to go about things,” Paul says. “Just the accuracy, and detail, and feature set that the product has.”

On the accounting side of things, Bean Ninjas say that in their experience, accurate financial results are the most important thing to get right for businesses that want to grow and prosper.

“There’s an incredible correlation between accurate financial results and almost every other impact in your business,” Tracey says.  “By having knowledge and control from a system like Cin7 Core and making sure you understand all of the moving parts, it has an impact on your cash balance. I’m a little biased but I think it’s one of the most important pieces to get correct.”

Cin7 Core, Tracey says, comes as a huge relief to clients once it’s set up and running smoothly. Things that were tear-your-hair out headaches, time-consuming, or downright impossible become a breeze with the right inventory management system, especially when integrated with best-of-breed financial and sales software like Xero and Shopify.

“Cin7 Core means one less human making mistakes,” Tracey says. “It’s such a relief for clients to have a totally integrated system that produces reports at the end of the month, that integrates directly into Xero, and that gives you meaningful, accurate financial information. I see clients going from confusion and bewilderment before using a system like Cin7 Core, to a much better sense of financial control and process improvement after implementing.”

Royal Essence, with four years of running on Cin7 Core, are in full agreement. They’re thrilled with the visibility Cin7 Core gives them in the day-to-day running of the business, the increased efficiency of operation, and the ability to plan for even greater business growth — because they’re not done yet.

“It’s the transparency for the whole organization,” Paul says. “I’m not in the product side of things, but I can just jump in and see what I need to see. And then it organizes everything for the accountant, so we’re not spending hours and hours. It just saves us a lot of time.”

What Is Cost of Goods Sold (COGS) + How to Calculate It

If you’ve been hanging around the accounting department, chances are you’ve heard the term cost of goods sold (COGS) thrown around a few times. But while COGS is  important, it’s also a concept people tend to misunderstand.

Knowing what COGS is will help you better understand all of the costs associated with your product and your profit margins. In this article, we’ll go over this common accounting term, including what it is, and how to calculate yours.

What is the cost of goods sold?

Cost of Goods Sold (COGS) refers to the cost of producing the goods that have been sold by a business. COGS is classified as an expense account on your income statement, representing the amount you have to recover from each sale to break even before bringing in profits.

COGS is only recognized upon the sale of inventory and is reported in the financial period in which those sales occur. For example, let’s say you have a clothing business with $5,000 worth of inventory. If you sell $2,500 worth of that inventory in the second quarter, you would record $2,500 in COGS. The rest would continue to stay in your inventory account.

As you can see in the example, the cost of inventory sold and COGS match. That’s because the value of your inventory stems from the direct costs of the items that make up that inventory, whether you’ve bought the materials to manufacture the items or purchased them for resale.

It also includes additional charges directly related to preparing products ready for sale, like packaging and delivery charges.

So, if we go back to the clothing store example, the $5,000 inventory number doesn’t come from thin air — the total includes the cost of the fabric, labor, packaging materials used, and delivery fees.

However, note that COGS excludes indirect expenses such as sales and marketing, so the costs associated with trying to sell t-shirts or jeans wouldn’t factor into the overall calculation.

Put simply, COGS equals the direct cost related to producing or purchasing products sold. Beyond that, just remember that the value of your inventory on hand is considered an asset until the inventory is sold.

Why is it important to calculate the cost of COGS?

Most businesses are in it to be profitable, and calculating your COGS is an important step to getting in the black. When you know your COGS, you can work to reduce the costs associated with selling, including the cost of your inventory.

COGS informs a business about the direct expenditures incurred in getting products ready for sale. For instance, if you know t-shirt fabric costs $5/yard, the labor to sew the shirts is $15/hour, and an average of $1 is spent on packaging each item, you can accurately price your t-shirts at a point where you can profit off the sale.

In this case, setting the t-shirts at $15 wouldn’t make you any money. Assuming each t-shirt uses two yards of fabric and takes 30 minutes to make, you need to price the t-shirts at $30 or more before you can even see a small profit.

Seriously, calculating COGS can make or break your business. Here are some of the other benefits of calculating COGS:

1. Helps create a pricing strategy

As demonstrated above, you can determine your selling price by knowing the direct costs incurred in producing or procuring products. Once you know these costs, you can figure out how to price your products to also cover your indirect expenses and earn a profit from the sale. But if you don’t know your COGS, you are honestly just guessing.

Overall, knowing COGS helps you determine how much profit margin you can keep on the products you sell.

2. Helps determine the total expenses incurred in selling products

Your profit and loss statement needs to list all your income and expenditures. By calculating the direct costs you have spent acquiring your stock, you can arrive at the total expenses incurred by including indirect expenses like your overhead, sales, and marketing costs.

You also need to know COGS before calculating your Inventory Turnover Ratio, which can help you make more informed decisions regarding your inventory and cut expenses further.

For example, if you calculate your inventory turnover ratio and find it’s pretty low, you’ll know you don’t need to replenish your inventory as often. That, in turn, means you can negotiate better deals with suppliers to further reduce costs.

3. Compare the market value of your product with your competitors

Determining profit margin by only considering direct costs incurred is an incomplete picture. If your prices are higher than your competitors you may make fewer sales.

If your prices are lower than your competitors, you can still incur a loss since your low profit margin might not cover your indirect expenses. COGS helps you to sell your product at a competitive price, grow sales, and, by extension, earn profits.

Now that you know the importance of calculating COGS, let’s learn the formula to calculate COGS.

How to calculate COGS

Here’s the formula to derive COGS:

COGS = Beginning Inventory + Purchases made during the period – Ending Inventory

To calculate the COGS for a reporting period, start with the value of the beginning inventory. If additional inventory was added during the reporting period, be sure to add the value of any new inventory produced or purchased to the value of the existing stock. Now, subtract the value of ending inventory from COGS sold for that reporting period.

Note, that this is a basic  formula and does not take into account items like returns, discounts, obsolete stock, and the inventory valuation method used. It’s still really useful, however, as shown in our breakdown below.

Example of COGS

Let’s assume that company X uses the calendar year to record their inventory. The beginning inventory value was recorded on the 1st of January, and the ending inventory value was recorded on the 31st of December.

The beginning inventory value was $20,000. During the year, the retailer realized that the business would sell more than the inventory received earlier in the year, so additional inventory worth $7,000 was purchased. At the end of the calendar year, the ending inventory value was worth $4,000.

Now, let’s work out the COGS for the entire year by using the following formula:

COGS = Beginning Inventory + Purchases made during the period – Ending inventory

COGS = $20,000. + $7,000 – $4,000.

Therefore, COGS = $23,000.

The COGS equals $23,000, as calculated. Use this formula to help with production, purchasing, and pricing decisions.

Calculating COGS can also help you calculate your profit for a reporting period and help with decisions to ensure that indirect costs are covered.

Suppose your revenue is $75,000 in a reporting period. Knowing the COGS, you can determine your profit will be $75,000 – $23,000 = $52,000.

COGS – Key business takeaways

The COGS formula can be used at an individual product level to help with decision-making before producing, procuring, and selling that product. It can help you make decisions like how much inventory you need to purchase or whether you might need to focus on marketing a slow-selling product, and it’s useful when tax season rolls around, too.

The COGS for a reporting period is the total COGS for all product sales for that reporting period. It is a vital metric included in your financial statements and used to calculate your gross profit for that reporting period.

Gross profit is a profitability measure that shows how well a business can cover its indirect expenses and earn a profit. The value of COGS will always depend on the direct costs of the products sold and the inventory valuation method used by the business.

Frequently asked questions

What is the difference between COGS and expenses?

COGS is a measure of the expenses associated with selling your goods. In particular, the direct expenses like labor, manufacturing, and materials. It does not include indirect expenses like rent or general office materials.

Is the cost of goods sold the same as profit?

No. The name cost of goods sold gives you a hint that COGS covers some of your expenses. However, you can figure out your profit if you know your COGS. To do that, use the following formula:

Revenue – Cost of Goods Sold = Gross Profit.

Remember, COGS tells you how much your items cost to make and sell; profit is how much you keep after these expenses.

Is the cost of goods sold taxable income?

In general, the IRS allows businesses to deduct some COGS-related expenses. For example, the IRS states you can include some business expenses in your COGS, which you subtract from your revenue to arrive at your gross profit (your taxable income).

If you calculate this way, you are not allowed to deduct those expenses a second time as a business expense!

Closing remarks

COGS is a big part of running a profitable business, and your inventory is a big part of COGS. To keep track of it all, you should invest in a cloud-based inventory and order management system like Cin7.

When you add in an inventory management system, you have a much clearer view of how to address any slumps, slow-downs, or sales. Working with Cin7 can help your business hold onto less while making more. Request a demo today.

Zafino

Mindi Chisholm, CEO of jewelry brand Zafino, found herself facing that exact question in the middle of a global pandemic. Fortunately, with the help of Cin7 and SMB Consultants, Mindi seamlessly transitioned her technology stack in a way that allowed her business to continue to flourish.

After finding and implementing the right solution, Mindi could get out of the day-to-day minutiae of her business, hire new team members, and focus her time on planning the brand’s future growth.

Starting over again

Before Mindi added a dedicated inventory solution to her tech stack, she managed the business herself and used her accounting software, Xero, to handle inventory. As sales grew, she realized that she needed software that could scale, so she turned to TradeGecko and worked with SMB Consultants to help her implement the new software.

Mindi worked closely with Jeff Atizado, CEO and co-founder of SMB Consultants to  successfully implement TradeGecko and pivot from a wholesale business to a successful multichannel retailer.

Unfortunately, Mindi’s excitement about the newly configured inventory solution was cut short. In 2020, shortly after Mindi had set up TradeGecko (later QuickBooks Commerce) to run her inventory, she received the news that the software was going to be discontinued in 12 months.

“[It] was heartbreaking,” she says, “because I put a lot of time and money into that program and then [had to] start all over again.”

TradeGecko’s looming sunset date meant that Mindi now needed to figure out a way to keep her success going while replacing critical software. Still, she chose to look at the bright side: “In starting over again, I was in a better place of understanding what a business system was capable of.”

Given the success of their first implementation project together, Mindi turned to Jeff to help her figure out the best inventory solution for her growing business.

Making the switch to Cin7

SMB Consultants was familiar with Mindi’s business and knew she needed a reliable inventory solution that would enable her to maintain a multichannel business model, expand into new countries, and automate inventory so she could scale without adding excess manual work.

Given these requirements, Jeff recommended Cin7 to replace TradeGecko and began working with Mindi to get through the onboarding process.

Although switching to a new software provider can be daunting for any business owner — and a common excuse not to make desperately needed software changes — Mindi remembers it as a smooth ride:

“Because we’d done all the discovery, Jeff’s team knew all of the key things that I needed to tick off so that when we went and did the workshops, we had those lists all in place. It was very methodical, the way they approached the rollout and the education for me. I was grateful for that.”

Now, Mindi is grateful for something else: the fact that her business is in a position to grow, really grow, through a multichannel presence and that her five-year plan is in good hands.

Cin7 was an even better fit for Zafino, enabling her to reduce manual processes even more and use real-time data to better understand her business.

“[Cin7 has] taken a lot of workload off me because it’s now so systemized and running so beautifully.”

Since making the switch, Mindi’s been able to take on extra staff to manage the day-to-day, allowing her to focus on strategy and growth. With Cin7, Mindi gets real-time visibility into stock levels and sales trends across all her channels.

“I can now step away and go, let’s really climb into my stock, let’s really have a look at forecasting, let’s look at my obsolete stock that’s not moving.”

Instead of spending her time keeping orders flowing and managing the details of inventory work, Mindi says, “I’m working on my business now, not in it.”

Setting the stage for growth

For his part, Jeff considers Zafino a real success story:

“It’s like 10 years of innovation and disruption happened within a couple of years. Because Mindi was able to centralize her inventory, she’s retargeting to different markets and integrating into online marketplaces. Now she’s expanding and moving internationally.”

The guiding principle for SMB Consultants, he says, is to “make it easy for [business owners] to make sure the time they have is spent doing the right things.”

There were a lot of packages that had to work together. After switching from TradeGecko, Cin7 became the central platform keeping Zafino running, along with Pinch payments and Airwallex.

Xero handled the accounting, while Shopify and Starshipit did orders and shipping. With nine stores and an ambition to roll out in other marketplaces, Zafino is now on Shopify Plus.

“If you’ve got a really well-running machine, a well-running system, it just means that when growth comes, you can cope,” says Mindi.

For Zafino, Cin7 is more than just an inventory system. With the help of Cin7’s seamless integrations and Jeff’s implementation insights, Mindi now has a solution that serves as the nucleus of her business. “Literally, every part of my business plugs into Cin7. It’s the hub.”

Now that Mindi’s found an inventory solution that she can rely on, she’s free to look forward and work towards continuing the growth she started during the pandemic. She says, “I know that my five-year plan will be in good hands with the systems that we’ve got currently.”

Discover what connected inventory can do for your brand. Explore Cin7 today.

Application integration and the significance it has for inventory management software

In today’s automated world, retail and manufacturing companies control their business processes with several different software applications, each of which performs a specific function. For instance, there are applications for accounting, supply chain management (SCM), and inventory management (IMS). While they’re separate and perform their own clearly defined tasks, it’s vitally important for them to communicate with each other and for the data they use to be passed between them. Simply put: If your SCM can’t pass its data on to your IMS, information about your stock would have to be input manually.

When these different applications are able to communicate, you have application integration.

 

Different ways application integration can be performed

Application integration sounds simple enough, but there are four basic ways it can take place.

Data level integration

Called data level integration, this method puts the data stored in each application into a single, separate database. This separate database is called an enterprise database or an enterprise database repository. To create this centralized system, the data stored in each individual application are extracted, cleansed, and reformatted to be consistent with whatever standard the enterprise database uses. From that point, individual applications can tap into the central system to get the data it needs.

This method is the lowest-cost application integration due to the minimal amount of programming needed to set it up and the speed with which that can be done. Data level integration only takes the data an application stores, not the coding of the application itself.

Application interface level

Known as application interface level, this method doesn’t have a centralized database that stores everything. Instead, data extracted from one application are converted into a standardized format and then loaded directly onto the target application. Hence, application to application.

Application interface level is currently the most popular method for data sharing because most application codes now provide interfaces. Cin7’s IMS, for instance, offers over 700 integrations, and new integrations are being added regularly.

Method level

Here, it’s not data that are shared, but business functions. This may sound precarious, but the actual business functions are not included in the code that’s passed along. An evolving way of exchanging data, method level is promising because it’s compatible with technologies like Java RMI, DCOM, and Cobra. A big drawback, however, is that the application code has to be changed before it can be used.

User interface

User interface (UI) is about having the different applications designed in such a way that users (human) can log on to their company’s network and bring up the data they need from any computer in the network. Application codes don’t have to be changed for this method to work  – a factor that makes the cost minimal – but that also gives it less flexibility.

Benefits of application integration for inventory management software

When it comes to inventory management, application integration is essential. Having the ability to input data from other applications into IMS software or passing the data it stores into another system, and being able to do so accurately and quickly, is vital to business operations. The benefits are:

Inventory optimization

Inventory optimization, or having the right amount of inventory, means carrying enough to fill orders and prevent stockouts, while not having too much of it.

If your inventory management software is integrated with accounting and ecommerce applications, you’ll have a clear idea of the quantity of items you should be warehousing as well as information about which actual items you should stock. You’ll also be alerted when you need to reorder.  This means less worry about overstocking or understocking.

Making good financial decisions

Information about how well certain goods have sold in the past and predictions about how well they’re expected to do going forward informs decisions that are made in the present. In order to get this information, reports and forecasts have to be accessed from several applications in real time.

When this information is available to IMS systems, better decisions can be made about which stock to carry. Additionally, application integration with a variety of systems makes audits more accurate. You’ll be able to verify that the stock listed in your books is a real reflection of the goods you have in storage, and you’ll have complete information about items that are in transit.

 

Types of integrations available on Cin7

There are more than 700 integrations in Cin7’s software, but they can be categorized into the following business operations:

Accounting apps

Accounting software records and manages your financial transactions, everything from purchases and sales to operating costs and payroll. Cin7’s system can integrate popular accounting software like QuickBooks Online, Xero, and QuickBooks.

Ecommerce platforms

Cin7 can integrate with ecommerce platforms that include Magento, WooCommerce, Shopify, and others. If you’re selling through any one of them, IMS integration will give you oversight and let you know how your sales are going. If you’re selling items through more than one of these ecommerce platforms, Cin7 will allow you to integrate their data and accounts into a single platform on your system.

EDI retailers

Electronic data interchange (EDI) is the system through which documents like invoices and purchase orders are transferred electronically. There are several electronic standards to choose from for these exchanges, but whichever one is used, both sender and receiver have to be using the same one. Cin7 can facilitate most of them. Some larger retailers like Scheels, Sears, Sephora and Walmart have their own EDI systems, and Cin7 can be synced with them also.

EDI suppliers

EDI suppliers are organizations that provide EDI-compatible solutions and technologies to other companies. Two of the leading suppliers are Synnex and Tech Data, and Cin7 can integrate seamlessly with both.

Marketplaces

If the website you’re selling your goods through is charging you commission for each sale, you’re on a marketplace. Marketplaces are a good way to get your product out and make a name for yourself, especially if you have a new company or are small in size. To keep on top of your business in these marketplaces, you’re going to have to integrate them with your inventory management system. Cin7 can do this for all the major marketplaces, including Amazon, Etsy, Iconic, and eBay.

Payment gateways

When you sell online, you need a payment gateway to process payments. You also need to integrate this payment gateway with your IMS. More than just getting paid for your goods, integration with your IMS streamlines their flow and ensures you have enough in stock.  To make this easy, Cin7 can integrate with payment interfaces like PayPal, Dejavoo, EVO Payments, and others.

Sales and marketing

Sales and marketing software uses technology to get your advertising to the right audience. That means customizing and posting it on social media and other pertinent sites. To facilitate this, Cin7 inventory management software integrates with Customer Relations Systems (CRMs) such as Salesforce, Mailchimp, Senter, and HubSpot.

Shipping

The very nature of ecommerce involves shipping. Goods that are purchased online have to be physically transported to their buyers. If you hire a third-party to take care of this shipping, you still have to keep track of the items and maintain your records. Cin7’s software can integrate with shipping partners Shippit, GoSweetSpot, Shiptheory and many others, ensuring you’ll always have the information you need at your fingertips.

Supply chain planning

The supply chain covers every step in the fulfillment/manufacturing process from purchasing and inventory management to sales and deliveries. To organize all this in the best possible way, Cin7 integrates with supply chain planning apps like StockTrim, Streamline, and Easy Insight.

Third-party connectors

Sometimes a company uses another organization, a third party, to provide the application integration software (API) that allows different applications to speak to each other. To enable this, Cin7 can communicate with Syncware, Hyperspace HQ, and Pipe17.

Third-party logistics

Logistics is the physical act of moving items and people from one area of a business to another. If you’re parceling out your warehousing and transportation to another company, you’re using third-party, or 3PL logistics. Some of the companies that provide 3PL include JAS, JD Smith, Quiet Logistics, and Ship Depot. Cin7 lets you integrate your systems with any one of them.

 

Winding up

In summary, application integration refers to the process of connecting two or more applications so that the data each holds can be exchanged. When it comes to IMS systems, this ability to share data makes the entire inventory side of the business operate efficiently, and ensures that there’s enough of it all times in the right quantities.

Cin7’s inventory management software lets you integrate with all the relevant apps, making sure you have all the information you need to keep your inventory at optimum levels.

If you want to learn more about Cin7, book a demo by clicking here.

Lockabox®

Like a lot of the best product ideas, Lockabox® grew out of a simple day-to-day frustration.

When he was living with hungry roommates, founder Peter Morris found himself asking that question a lot more than he’d have liked. After a long night, Peter would wake up and shuffle to the refrigerator looking for a slice of last night’s pizza for breakfast — only to find that someone had gotten there before him.

“Who stole my lunch?”

The solution Peter came up with was simple: a combination of a simple three-digit combination lock with strong polycarbonate construction. In short, a lockable storage container. Manufactured in the UK, these portable, lightweight boxes are today used for much more than food storage. Their primary product, Lockabox One®, is used by elder care facilities to store patient medications, and office admins are putting desk sensors in Lockaboxes® to gauge office traffic and optimize floor plans.

With annual sales of £2M GBP, Lockabox® expects to grow from a small product seller into a major player by investing in R&D over the next 12 months and expanding the Lockabox® product range. They’re moving from success to success — all with the help of Cin7.

Cin7 and Xero provide a single source of truth

Lockabox® Operations Specialist Rory Fitz-Gerald says he’s “relieved” to have put Cin7 into action in early 2021, especially as the company creates new SKUs and sales increase. Their old system, Rory, says, simply wasn’t up to the task.

“Our previous system was very inaccurate. We could never really trust the information we were working with,” Rory says. “I feel like we can trust what Cin7 is telling us on stock. Which obviously, for a small business like ours, is quite a big advantage.”

Lockabox® relies on Cin7 to help them to reconcile their weekly inventory counts (stocktakes). Without Cin7, coordinating stock between 10 warehouses across the globe could be an incredibly complex task. Luckily, Cin7 makes everything much simpler. Rory easily runs weekly stock and sales reports from Cin7 to facilitate stock audits and reconcile any discrepancies. He says the software acts as the single source of truth against which he can compare manual counts, and that Cin7 on side, Lockabox® needs far fewer people than it would otherwise need to manage operations.

The efficiency boost from Cin7 is multiplied by its powerful integration with Xero accounting software, with invoicing and sales data shared between Xero and Cin7 in real-time.

“Cin7 gives us that extra accountability because all sales go through it,” Rory says. “With the reporting coming out of it too, we know where stock has gone, and we can better manage distribution.”

On the B2B side of the business, Rory credits Cin7 for expediting wholesale orders. Once a quote is generated, “having the ‘accept now’ button on the quote automatically flips the quote to a sales order, so our wholesale customer can make immediate payment.”

Cin7 helps avoid financial setbacks

Lockabox® leverages Cin7 to manage their multiple Amazon and WooCommerce sales channels, as well as third-party logistics (3PL) and fourth-party logistics (4PL) partners who are directly integrated with Cin7. The system proved its value when the operations team suffered a mishap that could easily have become a costly catastrophe.

One of Lockabox’s® 4PL partners failed to log a shipment of 700 units with a retail value of £30,000. Fortunately, Cin7 exposed the discrepancy during a weekly reconciliation, and Rory was able to investigate and determine what had happened.

Without Cin7, Rory explains, the operations team would have assumed that the warehouse had 700 more SKUs of one particular product than was actually being held. The warehouse would have run out of stock prematurely and Lockabox® would have suffered a temporary outage of product to sell.

“Cin7 is our failsafe system,” says Rory. “We were able to pin the 3PL to the wall and say ‘no, our stock numbers are correct – you have made the mistake.’ Having Cin7 alongside gives us the ability to keep accurate branch transfer data to catch human errors.”

Cin7 is the key to product business growth

Lockabox® says that Cin7’s flexibility is key to the future growth of the brand, and they’re already gearing up for expansion, with the introduction of a new and improved version of Lockabox One™ Shelf Packs which help to organize and partition contents. With their expansion into accessories, Rory says the team is looking forward to leveraging Cin7’s ability to support product bundles.

Here at Cin7, we’re excited to have Lockabox® join a family of over 8,000 businesses that rely on Cin7 to manage their inventory and online sales. Lockabox® is currently building a manufacturing facility in the US, and with Cin7 as their foundation, we’re going to enjoy watching them grow.

If your business could benefit from the extraordinary inventory visibility and increased efficiency that Cin7 brings, don’t miss out — book a demo with one of our brilliant sales staff today.