Managing the Complexities of B2B Deals | Andrew Butt from Enable

Andrew Butt 0:00
What we kind of realized is, if we can take the friction out of the relationship between those distributors and their manufacturers, and almost make them work as one entity, so that they can work together to better serve the customer, the customer does get better service.

Alexander Ferguson 0:19
Welcome to UpTech Report. This is our applied tech series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at Teraleap.io. Today, I am joined by my guest, Andrew Butt, who’s based in San Francisco, California, co founder and CEO of Enable. Good to have you on Andrew. Great to be here, Alexander. So now Enable, if I understand correctly, is your focus on helping supply in supply chain digitization. So a platform to bring together the distributors, retailers to the suppliers and manufacturers, particularly in the rebates environment? Or as on your site, you say so much more than rebate management software? Help me understand Andrew, where did you guys begin with the problem? Like what problem do you see? And you say, Hey, we can solve this?

Andrew Butt 1:07
Sure, sure. Yeah. So the idea started, when my co founder and I met back in the UK, were actually both learning to fly at the time of learning fly helicopters. So we got chatting. And he was running what was already a very successful distribution business in the UK, that has now actually gone on to be the largest, most successful distributor of health and household products in the UK. And we were chatting about how a lot of the success and importance of in that business was having great trading programs and joint business plans with the brands, you know, with the manufacturers. So he had companies like Procter and Gamble, Unilever, Gillette, all these sorts of people who want to get their product to market and he was their distributor. So having those having those joint business plans in place was very, very important. And the currency of all of those plans was rebates. So really incentives that like sales commission to a sales team, but this is between the manufacturer and a distributor. So to answer your question, managing all of that was important, but difficult and messy and was being done on Excel spreadsheets, there was a lack of software on the market. So that is where the idea came from.

Alexander Ferguson 2:17
So you saw the problem with your friend that, okay, he had a great opportunity he was he was building a beautiful business, but the relationship between the manufacturer and to the end distributor and supplier that needed help in providing a software so that don’t have to waste so much time in Excel spreadsheets.

Andrew Butt 2:35
Exactly. And I think that there’s so much kind of focus on on the relationship between kind of companies and their customers and lots of innovation with e commerce and collaboration tools in that direction. But kind of going backwards, if he like into the supply chain was was kind of almost completely void. There was just nothing there. So huge opportunity.

Alexander Ferguson 2:55
Now, we talked about this a little bit ago about just laying the the scope of this, how much value and transaction is happening here. You mentioned, third of the GDP goes through distributors to retailers. So $30 trillion, but there’s very poor tech layer in that environment. We also talked about how like, okay, there’s companies, tech companies like Amazon, that are dominating the space, and so other retailers and providers, suppliers, distributors, how do they win? They win against Amazon’s

Andrew Butt 3:29
Sure, no, great, great question. And, you know, what we found across so many sectors, and whether it was you know, health and beauty and household like TCS, or whether it’s construction or electrical or automotive components, but about 50 different verticals where there’s physical goods, what we found is, distributors have an amazing relationship with customers, you know, they know customers, personally, they understand the particular geographic area. And they understand the products that they sell, and can help their customers to implement those and install those products. Okay. And also distributors tend to be independently owned and very entrepreneurial. So that’s all the value a distributor brings. And, and then, of course, the products that the distributors taken to market are all the same leading products from all the brands that we’ve we’ve heard of. So what we kind of realized is, if we can take the friction out of the relationship between those distributors and their manufacturers, and almost make them work as one entity, so that they can work together to better serve the customer, the customer does get better service, okay, rather than dealing with some massive kind of national entity, which is anonymous and doesn’t understand the market doesn’t understand the geography doesn’t understand the customer. This is the opportunity

Alexander Ferguson 4:42
is that win win win. So yes. It’s interesting when you describe how distributors are have that relationship and understand their market, would you? It’s kind of interesting because they’re going into a tech enabled world where you can buy anything online anywhere. So do you think the role of it is perimeter is still relevant.

Andrew Butt 5:02
Absolutely, I mean, I think it depends on product category. So where there are products that you can just very easily, you know, put in the mail and lightweight and, you know, end user facing and easy to use, then then the distributor is often not required. But with so many types of products, you know, they are complex, they are heavy, they are bulky, customers need extra help in installing them. They want some consolidation, so they don’t just want individual deliveries turning up, they they want to be able to go to one place and have the complete solution. And as I say, we can count around 50 verticals where this is the case, it’s it’s, you know, it’s more b2b than b2c, by the way. So this is more kind of business customers. But yeah, the role of distribution is, is vitally important and will continue, you know, forever.

Alexander Ferguson 5:50
Now, for you for you guys, how have you, how is your product evolved? Now, over time since you started there with your friend, he saw that that challenge? And where do you see it headed in the future?

Andrew Butt 6:00
Sure, yeah. So where we started was very much as a financial tool. So it was recognizing that these rebates coming in, typically from suppliers, into the distributors, as I mentioned earlier, it’s like sales commission. And, you know, the, the manufacturers are incentivizing the distributor to sell certain products and certain volumes and hit certain targets and get them into particular customers. And, and so it started out almost being a tracker for all of that that condition, you know, and calculating it correctly, making sure it was being claimed in full. So it’s a financial tool. But then where it’s evolved is into much more of a commercial platform to help to actually negotiate and set up these these deals in the first place and come up with you set a win win deal, which is good for all parties, and, and then make sure that deal is being being executed well. And it’s become a lot more collaborative, where, rather than just being an internal tool that finance department use, now we’ve actually got suppliers and distributors all logging on together, and you know, exchanging information and collaborating with sales online. So that probably is the evolution. And we’re continuing to build on that. And it’s becoming more like a marketplace, where you’ve now got these two sides, you know, these distributors and these manufacturers coming together, online. And and it’s a much more interactive environment than just being an internal finance tool.

Alexander Ferguson 7:22
What can you share as far as stats around the evolution and the engagement right now on it? Sure. So

Andrew Butt 7:28
yeah, we’ve now got the last count, I think 40,000 trading partners that our customers have set up and represented within the product. And of those, we have many, many 1000s of them with approaching I think, around 10,000, who are actively using and actually logging into the products, you know, the others have been kind of set up, but they’re not yet actively using it. So and that give you some perspective, that was kind of probably 2000, only two years ago. So we probably gone from 2000 organizations to 40,000 in about two years.

Alexander Ferguson 8:02
That’s that is impressive growth right there. Now, what would you say? is some of the challenges that come along with it? Is it the distributor that saying, Hey, I really see the value because I want to be able to track my commission and be able to get that? And then is it difficult to get the suppliers on? Or is it vice versa? And how are we working on solving that?

Andrew Butt 8:20
Yeah, yeah. So it just depends. It depends on each company and on the trading relationships they have, in terms of where that power sets. But I think the important thing is, this is about driving mutually profitable growth. And it’s back to that win win again, which is that the manufacturer wants to sell more products, and they want to hit their goals, they want to launch new products into the market, and they want to try and drive behavior really in the in the supply chain. So they want those goals to be met. And then the distributor wants to do a great job for the customer. And, and make a good margin, you know, and be rewarded for doing that. Good job. So this this really is creating a win win for everyone.

Alexander Ferguson 8:57
Andrew, I like how clearly you make it, it’s like yet, manufacturers want to sell more and want to sell more. So let’s all help each other sell more make everyone happy?

Andrew Butt 9:06
Yeah, absolutely. Another thing again, it is about serving the customer better. So back to your kind of mentioned of how does this help customers and why? Why are distributors relevant these days? You know, at the end of the day, this is about providing a great service to the customer that is provided by the manufacturer or the distributor coming together. Okay. And the distributor is adding a lot of value beyond what the manufacturer can do to serve the customer. So both of those entities, yes, they want to drive profitable growth. And they also both want to serve their customers better as well.

Alexander Ferguson 9:38
Now, something we had talked about before was about what happens when you put distributors with the manufacturers and being able to innovate and innovators in the manufacturing space. How can you dive into a little bit more?

Andrew Butt 9:51
Well, I see that manufacturers are innovators and then they’re not close to customer. You know, there’s a few exceptions isn’t there so Tesla and Apple for example, they They have their very own the whole kind of supply chain. But that’s unusual. You know, most companies are very good at innovating. And then they’re running very efficient factories. And, you know, it’s all about quality and efficiency, for example, whereas distributed distributors are much more about customer relationships and being, you know, in the field and understanding, again, the local market and what projects going on. So it’s a very different DNA, really a manufacturer and a distributor. And yet this, again, is about bringing that together into a much more seamless supply chain.

Alexander Ferguson 10:31
What can you speak of as far as on your roadmap of what’s coming up next, that you can share?

Andrew Butt 10:37
Sure, well, I mean, we are making our product more and more flexible for different types of deals. So you mentioned rebates, and that’s really a type of a type of deal. But there are many other types of deals as well, which go on between these trading partners, you know, between manufacturers and distributors, and go back a few years, most of them were quite dynamic, because again, people didn’t have tools to track them properly. So you just had annual deals, where you hit some targets, and then at the end of the year, get some money, it’s really simple. But now, it’s much more dynamic. These deals are customer specific product specific, they might be running for just a month, rather than a year. And it helps to drive behavior in a much more kind of in a much more specific way. So we’re making our software more and more and more flexible, easier and easier to use. And we’re also making it much more accessible and affordable. Because we want to democratize all of this deal management and rebate management and anyone that any business I should say that has these deals, we want to talk to you I’ll just log on to enable.com. And do this easily, quickly. And cost effectively.

Alexander Ferguson 11:40
is speaking of just the logistics of your platform itself, monthly annual SAS model subscription and who’s paying How does that work?

Andrew Butt 11:49
Yeah, sure. So so it’s the SAS model, for sure. Typically, annual subscription is way way our customers work. And, you know, we started out where distributors were our customer. And so they were paying to use our software. Because this rebate income is often all of their margin is all of their profit, and they want to manage it. Well. They’re leaking, they’re leaking this this essential income, so distributors pay and then they can invite their suppliers to collaborate with them free of charge. Okay. But what then happened was, a lot of those suppliers said, Well, actually, we want to use this with our other customers, we want to be a full user, not just a kind of collaborator. So they then started paying as well. And and it’s kind of normal balance of in terms of suppliers and distributors.

Alexander Ferguson 12:34
Very cool. Very cool. And if you were to share a word of advice, or just a tip to either distributor or supplier in today’s environment, with your knowledge, what would you share?

Andrew Butt 12:46
Well, I think I think there is real value in in, and it is a cliche, isn’t it, but in having a strategic relationship and having transparency in so if you and I let’s say you are the distributor and I’m manufacturer, I’m saying to you look, let’s work together, let’s create a joint I know genuine joint business plan of what I’m trying to achieve, how I think you can help what you’re trying to achieve. Let’s capture all of that into a plan. And let’s track it online together, and make sure happens, and let’s be committed to making making it happen. I think some sometimes it’s much more, that there’s a mistrust between manufacturers and distributors, and that there isn’t that genuine collaborative relationship. It’s almost How can I get more money out of you? or How can you get more money out of me, but I think my advice is use technology, be transparent, and you literally will drive mutually profitable growth. By doing that,

Alexander Ferguson 13:38
I love that you paint technology as as a helpful tool and bringing transparency and trust in today’s environment, which is crucial.

Andrew Butt 13:47
Absolutely.

Alexander Ferguson 13:49
Well, thank you so much for sharing your insights on Enable. For those that want to learn more, you can go to enable.com. And then you can look like and try it for free and take it for a spin. And if you’d like to hear more about Andrew story, stick around for part two of our discussion, we’ll be able to hear more about his founding journey to get to where he is today. So thanks again everyone, and we’ll see you on the next episode. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you subscribe to this series on Apple podcasts, Spotify or your favorite podcasting app.