237 | Off-The-Shelf, Custom, or Composable? | with Andrei Rebrov

Andrei Rebrov  

In the beginning, the most important goal is to get feedback from your customers as fast as you can. And learn as much as you can in the shortest period of time.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. 

Today I welcome to the show, Andrei Rebrov, the CTO and co-founder at Scentbird. 

Welcome to the show, Andrei.

Andrei Rebrov  

Thank you, Chase and thanks for having me here today.

Chase Clymer  

I'm excited to chat. So for those that are unaware, can you quickly talk about the types of products that Scentbird is bringing to market?

Andrei Rebrov  

Sure. 

Scentbird is a subscription service for perfumes and colognes.

 And we're reaching this target with the more general idea like "How to make it easier to buy perfume online and make it less risky." 

Because if you don't like a purchase --for which you just spent $150-- it's not that easy to return it because you already opened it. So we tried it [in] a year for a different model. 

And then we found the subscription world and we found the repackaging world. 

So now instead of buying a 100 ml perfume bottle [and] spending $150 on it [and] not liking it, you can just go to Sendbird, spend $17 and try new perfume every month.

Chase Clymer  

Awesome. So where did this idea come from to have a subscription model for trying perfumes? And do you also offer colognes?

Andrei Rebrov  

Yes, we offer colognes. And actually men represent 1/3 of our audience. And the original implementation of solving this issue was "try before you buy" like Warby Parker. 

So we were spending up to 3 perfume bottles with samples. Had fraud-related issues and low conversion rate. 

And then we started to do things that we were supposed to do in the beginning: We started to talk to customers more and more. 

And we noticed a common topic, people were saying that "I have 5, 6, 7 perfume bottles on my desk. Half of them are still full. I want to buy more but I cannot justify another $100 purchase because I spent so much money and haven't used [my] perfume." 

So we thought "Okay, maybe if we ship perfume in a smaller volume and make it cheaper, people will be more open to try new stuff." And this is how the idea of subscription came to light.

Chase Clymer  

So you were speaking with your customers and learning from them. And so how did you guys do a trial run of the sample subscription thing to a subset of customers or how... 

I guess, how nimble was your first MVP of this product?

Andrei Rebrov  

It was pretty bold. So we spent about a week and a half changing the website from the "try before you buy" to subscription. 

We emailed all the previous contacts, we emailed all our friends, we emailed everyone in the startup accelerator we're participating in and said, "Hey, guys, we have this new cool idea. You can buy perfume for --at the time it was $15-- And we'll ship it straight to your door." 

We purchased samples from Alibaba, I believe. We then went to Sephora and bought a bunch of traditional retail bottles. 

And then when the shipment day came, we [sat] together in the kitchen of [the] startup accelerator and literally started to spray from the big bottle to a smaller one because we didn't have an opportunity to open the big bottle. Otherwise, the perfume will just evaporate. 

So this is how it all started.

Chase Clymer  

(laughs) That's amazing. That's amazing. Do you remember how many samples that you guys had to push out the door that one day?

Andrei Rebrov  

Yes. So that day, we shipped 140 shipments. We started at 6pm. I believe we ended up at 3am. So the whole world of fulfillment was pretty new for us. 

Now, we ship at around 100,000 shipments in under 5 days. So we learned quite a bit in this area. 

But the first round was quite memorable.

Chase Clymer  

Absolutely. So for the listeners, they probably have... 

Just in the way that you've spoken about technology, your background isn't in fragrance. Talk about your history before the startup accelerator and before Scentbird and what you were up to. 

And then how that led into founding Scentbird with your team.

Andrei Rebrov  

Sure. 

So I'm actually originally graduated from the Aerospace University back in Russia that explains certain rockets in the background and certain books on my shelf. And I have... 

I'm a big fan of outer space but I'm a software engineer. And I was doing engineering before. 

And as an engineer, I love to build things. And I love to build customer things. 

But at some point, I joined... After working for big outsourcing companies for bigger prize clients, I joined a smaller company. It was a job consulting. There were just seven of us. And it amazed me how fast a certain decision could be made and how much responsibility it can get. 

So I started to think maybe I should join this startup world as a technologist and see where it goes. And what, 10 years later here I am.

Chase Clymer  

Awesome. So you learned agile a little later on in your career? 

Andrei Rebrov  

Yes. So actually I started to learn about agile while I was still in university, because I was working already for the software company at the time. 

But I was learning more [about] the engineering aspect of it like how to write code faster, how to not overcreate shipping code, how to write tests smoothly, how to work with business stakeholders better from an engineering perspective... 

That definitely helped me a lot.

Chase Clymer  

So from this perspective, as a co-founder of a direct to consumer brand, what can any other founder out there? That's a few steps behind getting things started right now. 

Take away from an agile approach, what would you tell them to focus on? 

Andrei Rebrov  

I would say focus... When you start, focus on [agile] immediately. Because when we started our startup, obviously, as a technology co-founder, I had a tendency to over engineer things to create a scalable platform, to create the best code, to create all of that. 

That's not what is needed in the beginning. In the beginning, the most important goal is to get feedback from your customers as fast as you can and learn as much as you can in the shortest period of time. 

That means that you need to use the right technology that will allow you to do that. In some cases, it means that you just need to go and use some off-the-shelf platform. 

In some cases, it means that you need to do certain custom development. So for example, the first version of Scentbird was a PHP template. 

And I don't like PHP, but it was easy to run and it was easy to spin out. And that's what I had to do to run this business.

Chase Clymer  

Absolutely. Now, when... You guys, obviously, were in an accelerator and you started to see some traction. 

Do you remember what was going on with the business when you were like, "Well, this is actually working. We're onto something here."

Andrei Rebrov  

I think, once we pivoted into the subscription model, because we spent a year on the "try it before you buy it" [model]. 

The first 140 subscribers was already a decent amount. But then at some point in the beginning, we started to work with influencers and we did a lot of work with them. We still do. 

And at a certain point, we started to get like 10 - 20 - 50 - 100 subscribers a day. And that was already quite a different dynamic compared to what we had before. 

And once we hit our first 70,000, then we knew "Okay guys, this became something serious. We found our product-market fit. Let's push harder on this."

Chase Clymer  

Absolutely. During that rapid growth phase, I know things were probably breaking especially as you said within your tech stack. It doesn't have to be perfect. It just has to work. 

Do you remember anything that went awry during that growth phase?

Andrei Rebrov  

Yes, I still remember like it was [last week]. For listeners who watch us, I have a lot of grey hairs. 

And I think the first big bucket of them came when I accidentally mailed 3000 customers instead of 300 or something like that. 

So we had to email them back and say, "Hey guys, sorry. It wasn't an error. Nothing happened. Everything's fine still." 

Because we're still operating in a pretty direct manner, direct access to the database, just skilled export data from their sent email. So certain things like that happen. 

They have been less than less, obviously, over time. But then there are certain things when we started down migration from one cloud provider to another. 

And instead of accomplishing this in 15 minutes, it took me 6 hours. So whoops, it happens. No pressure from co-founders, no pressure from the marketing team. 

But yeah. 

Chase Clymer  

Absolutely. 

Andrei Rebrov  

It happens.

Sponsor: Electric Eye  

Hey there, merchant.

Are you tired of trying to navigate the wild world of ecommerce on your own? 

Are you looking for a partner to help you achieve your goals? 

Look no further than the Shopify Plus agency, Electric Eye. Our team has a proven track record of helping our clients make millions with strategic design and development.

Whether you're migrating from a legacy platform to Shopify, designing a new theme for your store, or just looking to optimize what you have, Electric Eye is the perfect partner for you. 

Electric Eye are true Shopify experts. 

Not only is our Shopify knowledge unparalleled, but we have partnerships with all the best tech in the Shopify ecosystem. 

And don't worry, we're easy to get a hold of. Our clients rave about our fast communication.

So here's the deal, if your ecommerce business is doing over $1 million dollars a year you can receive a complimentary Shopify Diagnostic from our team of experts. 

That's free, personalized, strategic recommendations to improve your store and grow your business.

To get started, head on over to electriceye.io/connect to schedule an intro call with one of our experts.

That’s electriceye.io/connect.

Sponsor: Sendlane  

Alright, I want you to picture this: You're an Ecommerce merchant juggling multiple platforms to manage your email marketing, SMS campaigns, AND product reviews. 

It's a time-consuming and costly ordeal. But with Sendlane, those days of chaos are long gone.

Sendlane brings together the power of email, SMS, and reviews all in one convenient place. So you can say goodbye to the hassle of separate tools and hello to simplified operations, increased efficiency, unified customer experience, and huge savings.

And I haven’t even gotten to the best part; with the all-new FREE Sendlane Reviews, you can leverage social proof to build trust and credibility with potential customers. 

Let me say that again: Free. Product. Reviews. 

With Sendlane, you pay for email and SMS and you get reviews for free! 

Sendlane understands that customer feedback is essential for the success of any Ecommerce business. That's why they've made it an integral part of their platform without any additional cost to you.

By unifying these key components of your tech stack, Sendlane helps you save time and money, all while generating more revenue.

Don't let your Ecommerce tech stack hold you back. Embrace the unifying force of Sendlane and take your business to new heights. 

Sign up today and experience the power of streamlined operations, increased efficiency, and revenue growth.

Visit sendlane.com/honest to learn more and schedule your free consultation with a Sendlane expert. 

Chase Clymer  

Within your show notes here, you have a big opinion about build versus buy. 

Andrei Rebrov  

Mm-hmm.

Chase Clymer  

Where would you draw the line? 

Or how would you like other listeners to think about the choices that they're making versus in custom development versus using something off-the-shelf like Shopify?

Andrei Rebrov  

Mm-hmm. I would say right now I [actually see] 3 different buckets. 

One is to go with something like Shopify, and there is absolutely nothing wrong with it because it allows you to spin out your business faster, especially if you have an idea of a great physical product. 

So Shopify is the easiest way to start. And [there are] a lot of merchants who still use it, even if they are huge. 

I believe there is a company called FIGS out of New York. They sell scrubs. I believe they do something around $500 million [and] they are still on Shopify, so it definitely works for them. 

[On the] other side of this, another bucket will be absolutely custom development. That makes sense when you offer some unique services on top of your physical product. And that made sense for us. 

Because when we started at first, there were not that many subscription-focused platforms. Second, they had very limited functionality. 

And we already knew that we want to have 100% personalization when it comes down to what people get every month. So we had to develop this. 

Now we're actually moving to a third bucket which is composable commerce, meaning in certain areas, we don't have that many specific functionalities. 

So for example, when it comes down to traditional Ecommerce, we need normal cards, regular cards, we need regular discount agents, and we need the regular product information model or PIM. 

So in this case, we actually go and integrate a vendor, but like not every vendor works here. So over time, we actually created our internal list [about] what we are looking [for from] potential vendors.

And finding now several years ago, there came a new alliance called MACH Alliance. And actually that's exactly what these people are proposing: Building composable commerce. So that was nice. 

The idea that we had internally actually got external validation.

Chase Clymer  

Absolutely. And then another term that listeners have probably heard around composable commerce is headless. 

Andrei Rebrov  

Yes.

Chase Clymer  

They are used [interchangeably]. So for a headless approach, I am of the opinion that it is definitely a direction to go only when your needs require it. Would you agree with that or not?

Andrei Rebrov  

Yes, that is true. In general, it's better not to over build things. And if people will access my website only from the web, then just use traditional platforms like Shopify or Bold Commerce for example. 

If you know that you might have to deliver your product over the web, mobile applications, kiosks, or something else, then you might say, "Okay, I need something headless, because heads might be different in different circumstances." 

So again, it comes first with understanding “Where is my customer and where will I showcase my product?”

Chase Clymer  

Absolutely. This is just very timely for me because a lot of companies... 

Headless was a big rage about a year ago in our industry and a lot of people went. And now I'm seeing a lot of those same companies go back to just using Shopify or Bigcommerce, or whatever front-end to run everything because they... 

While these platforms are fast and extremely custom, they're also very expensive to maintain and make sure they still work.

Andrei Rebrov  

Exactly. I would say one big problem here is... 

Unlike traditional big integrations, the goal here is not to do a big bang change, big bang implementation that will take one year or two years. 

Start small. That's the whole goal of composable commerce. If you need to replace one component, just go and replace one component. 

Don't replace your entire Ecommerce engine because that will be closer to suicide. 

Start small, see if it accomplishes your goal and then move on. 

And unfortunately, people are just "Hey, we're following the wave of headless. We're following the wave of AI." Or whatever. And they just rush in.

Chase Clymer  

I think some people just like to do things to have something to do and not necessarily the right business choice. 

Yep. I agree.

So Scentbird is an amazing subscription business. How is the subscription world different from your traditional Ecommerce business?

Andrei Rebrov  

There are a number of differences. But I will name just a few of the most critical ones. First, [is] the way you handle your payments. 

Because with traditional commerce, people will go to a website, go to the checkout page, and they can finish the transaction and either go through or not.

With subscriptions, you need to make sure that all the recurring transactions will flow, otherwise your business won't grow. 

So there is a lot of complexity around "Hey, how can I increase the number of transactions they go through? How do I recover failed transactions? How do I communicate to the customer?" 

And [in] tech, that is actually a big percentage of my work. I do compare various payment services all the time. We all constantly update our FinTech stack in general. 

So that's a big part. Second part is the fulfillment, because right now we have more than 500,000 subscribers. And it means that every month we ship 500,000 shipments. 

That's the size of a very decent Ecommerce company, even though the average order value is not that large. But that volume creates a lot of complexity, especially since all our shipments are personalized. 

So we have 600 products on the website. You can have up to 3 products in your subscription plus we have different Ecommerce promotions, so the complexity grows exponentially. 

But we still want to compete, probably with Amazon Prime SLAs. You want to fulfill faster, you want to ship fast. 

So that creates a lot of complexity around "How do you do fulfillment? How do you operate your warehouse? What kind of warehouse management system do you have? Does it allow you to ship fast?” 

And unfortunately, some 3PL providers cannot do this properly, cannot do this in time. So that's why we had to also take over this operation. 

And that's what we do right now. And I would say we are pretty successful in it. 

Chase Clymer  

That's amazing. Now, if I'm a listener, and I'm curious about giving Scentbird a try. Where should I go? What should I do?

Andrei Rebrov  

Just go to scentbird.com. S-C-E-N-T-B-I-R-D.com and subscribe. We have 50% of the first month and you can choose any perfume from 600 [scents].

Chase Clymer  

Awesome, Andrei. Now is there anything I didn't ask you about that you think would resonate with our audience today?

Andrei Rebrov  

Last year we acquired another subscription business called Drift. drift.co. And these are amazing car fresheners. 

And this is such a [good] example when we use Shopify with Recharge. And that works perfectly for us, because the whole premise is around the product. 

Yes, there are certain variations, but these guys came up with a great product. And this is where the traditional platforms work great. Now, we have two different tech [stacks]. 

We can actually compare them in terms of how easy it is to operate them, how easy it is to customize them. So we see pros and cons of both of the platforms. 

But it allows us to actually complement 2 subscriptions not only from the customer perspective --like we [also] do cross-selling-- but also from the operational perspective. 

Because now we can support each other, we can make another subscription business more efficient. 

And that's what some subscription business owners should think of: "Hey, what could be another subscription business that can complement mine, that I can either acquire them or partner with them, and it will make both of the businesses more successful?"

Chase Clymer  

Now, are you actively looking to acquire another business? Or is it just something came across your radar and you guys explored it?

Andrei Rebrov  

We did. Because all the time we were looking into expansion. You can either go internationally or you can go into different verticals. 

And over time, we learned that we should remain in the fragrance or scent-related category because it resonates with our core audience. So we decided... 

We started to think, "Hey, what are other products that we have in our life, in our house that people buy often?" 

And then we found this amazing company, we acquired them,and now we look forward to what other verticals we can penetrate.

Chase Clymer  

Absolutely. And just to tell any listeners out there that might... This might be a strategy for them to look at. 

What were some of the advantages of acquiring another company, having 2 different businesses to basically run under the same umbrella? 

Where were you finding efficiencies or extra profit by doing this?

Andrei Rebrov  

So a couple of things to mention. So first, as a bigger business, a standard now [is] we have more leverage when [we need to] do various negotiations for another subscription. 

When we talk to them and say, "Hey guys, that is the power of Scentbird. We're a big company now. How about we talk about longer partnerships and get a better discount?" 

Second: internal iterations. Since we have our own warehouse… Since we have everything already lined up: supply chain, operations, warehouse, supplier contracts... 

Now we can replace what any other subscription has with more efficient operations, both from SLA and pricing. So that allows us to improve the margin for the amount of subscription. 

And third is cross-promotion. Now, if you launch your product on one side, you can potentially launch to another side and increase the market for yourself. 

So I see these 3 things as the biggest [opportunities].

Chase Clymer  

Absolutely. I think that's wonderful. Andrei, thank you so much for coming on today and sharing your story with us.

Andrei Rebrov  

Thank you for having me, man. It was a great conversation. 

Chase Clymer  

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

You can subscribe to the newsletter at honestecommerce.co to get each episode delivered right to your inbox. 

If you're enjoying this content, consider leaving a review on iTunes, that really helps us out. 

Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.