Rick Wilson is the former president who’s currently C.E.O. And he joined me to discuss Miva, independent ecommerce, and the effects of Amazon. Our whole audio conversation, and a transcript of it, edited and condensed for clarity, is under.
Practical Ecommerce: Please bring us up to date on Miva.
Rick Wilson: It’s been an exciting year, plenty of changes. I formally took over the business since C.E.O. back in April. I was running the business on a day-to-day foundation for several years.
The first ten years of the ownership structure we, for a lack of a better term, bootstrapped the company. We climbed significantly, from approximately 1 million dollars in yearly earnings back in 2007 to the mid-teens now. We are still privately held, but we increased an 18 million dollar round of expansion equity this year by a private equity company. The workers are still, collectively, the vast majority owner, which was really important to us at any offer.
Ten years ago people saw us as a small-to-midsize-business platform. We have really shifted to what I believe the mid-market for ecommerce. Businesses doing 1 million dollars in yearly earnings to 50 to 100 million online are excellent for us.
PEC: Do you still offer you a certified product or is it completely SaaS?
Wilson: We provide what we consider a hybrid SaaS. We’ve got a SaaS-hosting architecture. It is very similar to the majority of SaaS hosting architectures. It runs on all of the typical setup behind the scenes — VMware, EMC, Cisco Blade servers — the sort of things you would see in a typical cloud.
We have assembled a middleware layer internally, so if you host with us, that 99 percent of our clients do, then you get that SaaS middleware layer that manages all your provisioning along with your billing and comparable services. But in the end of the day, if your setup is here at Miva or onto your own servers, or else you opt to place it on a hosting company of your choice, basically, those installations are your single personal installation of Miva.
- cost of goods sold cogs
- what is inventory turnover-ratio
- pos receipt template ideas
- cost of goods sold cogs
PEC: What is the monthly fee on your platform?
Wilson: For our smaller clients, it is pretty static. If you are under 100,000 dollars in revenue annually, you are going pay $80 per month. If you are 100,000 to 500,000 dollars, you are likely pay roughly $250 per month. If you are between 1 million and 10 million dollars in yearly revenue, you are likely to cover from approximately $1,500 to $5,000 per month.
PEC: Who would be your personal equity investors?
Wilson: It is a business called Bison. It’s an interesting model in the realm of private equity. Private equity is usually known for coming in and purchasing majority or complete ownership of a company that has an interesting market presence
What made Bison unique is Bison invests in owner-operated businesses where the owners are still very bullish about the future. That was our scenario. This was what really drew us to them. I guess it was a bit over a year from our initial meeting to if we closed the deal. I probably delayed it over I needed to, but it was really important to me. Selecting an investment partner is like choosing a partner. And it was important to select a company that I felt we could work with for the future.
PEC: What will the proceeds be used for?
Wilson: It enabled us to sell some stock of current shareholders. No one sold all their stock, but it enabled them to market some of their inventory. And then, the rest of the money will be utilized for expansion.
While we have been well known and pioneering, particularly for men and women that have been in ecommerce for quite a long time, we have not traditionally employed paid marketing. We haven’t done plenty of pay-per-click advertisements, for example. We do not rank number one on search engines. We have often been called the best-kept key in ecommerce. And thus the money is going be used to alter that.
We are not after anyone else’s playbook. But we’re definitely taking a much more proactive stance on marketing and sales today.
PEC: With the development of Amazon, Miva being able to raise $18 million is apparently a vote of confidence for the future of independent ecommerce. Is that accurate?
Wilson: Yes, it is accurate. However, the danger of Amazon is actual. As a customer, I use Amazon routinely. Not for everything, and I try to know when am I defaulting to Amazon and I could be encouraging somebody else.
Amazon is now the best, most effective way online to obtain a commodity product. And it’s done a fantastic job of getting the search engine of choice for ecommerce.
There’s a good deal of nuance to this. Back in the day, there were lots of those who made their living with a fantastic distribution relationship with a producer or a supplier, and being fine at search engine optimisation. And then quite a few things have happened.
First of all, Google has changed. Search engine optimization is no longer what it was. From approximately 1997 through 2010, companies could rank highly in Google and leverage that position for a middleman. That leverage is gone.
Google has crushed it and Amazon has crushed it, also.
PEC: What will U.S. retailing look like in, say, five decades?
Wilson: You see hints of it . If you go to one of the Amazon stores, or when you’ve shopped in an Apple store, you can surely see hints. Consumers no longer observe a difference between ecommerce and trade.
Though Amazon is dominant in commodity products, now is the golden age for people to start new companies and build a brand from nothing. Think of all of these new upstarts in products such as mattresses their business models were not even conceivable five or 10 years back. I think you’ll find a good deal more unique applications of our technologies over the next five or 10 years, based on a few of the things you see now from the big players.
PEC: What is on the horizon for Miva? Acquisitions? An initial public offering?
Wilson: Things like acquisitions, we are always open to. We made a few previously — three in total. We are intrigued by the possibilities. Eighteen million dollars is not enough to go on a huge shopping spree, but it is enough to give you a bit of credence to check out a few things.
An IPO is comparable. We are not yet in a position where an IPO is in our short-range future. I don’t think an IPO in and of itself is a worthwhile aim. My aim is to build a excellent place to work my workers like, and make a product which helps my clients succeed and compete with the likes of Amazon.
We can take the most complicated of ecommerce sites that routinely require either open-source platforms which are essentially so customized they are nearly a fork, or quite high-end, quite expensive platforms, and we make them viable and affordable to midsize companies, which enables them to lean in their competitive sector.
That is the future of Miva, to keep growing. I expect us to move from 125 workers to 250 to 300 within the next three to five decades.