In this interview series, we are talking to ecommerce managers, supply chain professionals, and logistics experts with direct experience in ecommerce logistics. As a part of this series, I had the pleasure of interviewing Matthew Debage.
Can you tell us about your backstory and how you grew up?
I grew up in Buckinghamshire, England, so I have the British accent and a love of tea that no amount of time living in the States could change. Growing up in the countryside, I played County Rugby and County Cricket—two sports that are quite popular on that side of the pond. I also have an unbridled passion for acting—I performed in a lot of plays during my school days.
There’s something about telling stories and getting the audience to follow along that I just loved. I think I always had a knack for sales because I used to sell coffee and tea at my school. It was my side hustle before the term “side hustle” even really existed.
What led you to this specific career path?
I studied Business Management at university and then joined the graduate trainee program at Thomson Directory, which is a telephone directory for the UK. It’s like the Yellow Pages in the United States. In that graduate trainee program, I was involved in sales, marketing, and even manufacturing of the directory products. I was able to get my hands and feet wet, so to speak.
Best of all, I got a first-hand look at the data used in the directories for navigation systems and directory inquiries. That was my first introduction to data in the business world, and it sparked something in me. One industry that Thomson Directory sold to was the credit information space. That’s where I really became intrigued by how data could be used to understand and mitigate business risks. That curiosity for strong data has stayed with me throughout my time at Creditsafe.
Can you share the most exciting story that has happened to you since you began at your company?
Setting up the Netherlands and Japan offices were two huge moments for me because they exposed me to all the different nuances of working in other countries—the cultural norms, business etiquette, building and growing local teams, navigating the legal and legislative landscape, and so much more.
What are some of the most interesting or exciting projects you are working on now? How do you think that might help people?
While a lot of our AI currently falls into machine learning, we’re looking to build out our predictive analytics capabilities so that we can predict when companies could fail. This is going to be extremely important as every business is worried about cash flow and business growth, especially with a looming recession. The more companies that succeed and grow, the more that money is reinvested into the economy.
We’ve also been working to look at how we can make the compliance search process better. Compliance is vital in every organization. But as our recent study found, nearly half (42%) of businesses would still work with a supplier who is on a sanctions list or involved in corruption, bribery, child labor, or forced labor.
What are three traits about yourself that you feel helped fuel your success?
Attention to detail: Most CEOs wouldn’t get their hands dirty with handling data the way I do. It’s something that’s extremely important to me, both personally and professionally. So, I stay heavily involved to make sure our data is as robust and reliable as possible.
Cultural adaptation: As someone who grew up in the UK, lived in India for a year (and even named my daughter India), and has been living in the US for 10 years, adapting to different cultures is something I feel I’ve done well. It’s about not trying to change the local culture and, instead, about adapting to it.
Not taking things too seriously: You see a lot of CEOs who are serious all the time or only speak/meet with senior-level people in the company. I’m not a fan of that. I am who I am, and I’m not afraid to show my light-hearted personality to anyone in the business. I don’t mind laughing at myself. Doing so is a great way to connect with people in the company—it shows them I’m approachable, and they don’t have to walk on eggshells around me.
What was the original vision for Creditsafe? What pain point(s) does the company solve for your customers?
The original vision for Creditsafe was to give businesses comprehensive and reliable credit risk data that would essentially:
- Help them understand the financial, legal, and compliance risks that pose a threat to their business.
- Give them the full data picture of their customers (existing and new) so they can make the right decisions for their business and safeguard their cash flow.
- Allow them to vet new customers more effectively to avoid working with businesses that won’t be able to pay their invoices on time (or at all).
- Automate certain processes like the credit decisioning process so their finance teams can be more productive and effective in their roles while also accelerating and improving the customer onboarding process.
- Empower them to run due diligence and compliance checks to avoid working with unethical, corrupt suppliers who may be on a sanctions list or involved in bribery, fraud, or child/forced labor.
When we speak to our customers, there are a variety of pain points that come up. It depends on the job function.
For example, finance and credit managers often struggle with cash flow and don’t typically understand that their customers often pose the greatest risk to their business. That’s where we work with them to provide unlimited access to credit reports so they can vet both new and existing customers regularly to understand how their customers’ financial management practices can affect their own cash flow and business growth.
We also work with them to help them overcome their fears and hesitation with automating certain financial processes like the credit decisioning process. It can save them a lot of time and money (especially when you consider larger businesses process thousands of credit applications in a single day).
On the other hand, supply chain/procurement managers have a different set of pain points. They’re worried about political unrest and worker protests causing supply chain disruptions that could lead to production stoppages and product shortages.
At the same time, they’re also increasingly focused and worried about compliance. So, we help them do the necessary due diligence to avoid working with suppliers that are on sanctions lists or are involved in child/forced labor, bribery, fraud, and other unethical practices.
This is not only going to be a lifesaver in protecting them against compliance violations and government fines, but it will also help protect their reputation. We’ve seen so many brands, especially in the manufacturing industry, come under fire for working with suppliers that use forced/child labor. And we know consumers consider CSR/ethical sourcing to be a highly influential factor in whether they buy from brands.
What are some of the biggest challenges companies face regarding ecommerce logistics costs?
There are several challenges companies face regarding ecommerce logistics costs.
To start, controlling shipping costs can prove difficult. On the one hand, companies want to keep their customers happy. So then the question arises: Do we ship orders faster, or do we ship them at a lower cost? One thing companies can do is offer standard shipping as a free option and then charge an extra fee for faster shipping. That way, the added shipping costs are paid for by the customer.
Another problem could be that companies are relying on too few suppliers, meaning they’ve allocated a large portion of their production orders to a few suppliers located in the same region. This can lead to increased costs if the goods aren’t produced up to the quality standards a company expects or they’re damaged. That means the company would have to spend more money to have the goods re-produced again to fulfill customer orders.
Warehousing and inventory management can also drive costs up for a company. For example, a company could overestimate the amount of warehousing space needed to store inventory. Another scenario is that a company orders too much inventory of stock that isn’t selling.
What role do technology and automation play in reducing ecommerce logistics costs, and what specific tools or solutions are the most effective in achieving this?
Technology alleviates the fears and risks of doing business with international suppliers. Most importantly, it exposes a variety of legal, financial, and compliance risks that could slow down production, reduce customer loyalty, lower sales, and cause irreparable damage to their reputation.
Without credit risk intelligence platforms, brands wouldn’t be able to run credit checks on international suppliers to make sure they have enough income and cash flow to pay their employees, pay for materials, and complete production orders on time.
Think about it this way: If one or more of a supplier’s factories shut down for any reason (i.e., financial trouble, political unrest, worker disputes, pandemics), then brands will have to figure out how they’ll get those orders completed from other suppliers in time.
Technology isn’t just useful for understanding the financial stability of international suppliers. It’s also a critical tool for screening international suppliers, including directors in the company, against real-time sanctions databases, global enforcement lists, adverse media, state-owned companies, and Politically Exposed Persons profiles. Can you imagine how long this would take and how hard it would be to spot red flags if this was done manually? It would be a nightmare, to say the least.
The implications of working with a sanctioned company are far-reaching. Just look at what happened to British American Tobacco. The company has been ordered to pay $635 million plus interest to U.S. authorities after a subsidiary admitted selling cigarettes to North Korea in violation of sanctions.
What advice would you give people to secure the highest quality of service at the lowest possible cost with logistics providers, and what metrics would you use to measure performance?
One of the most important things companies should do to make sure they get the best quality of service from third-party logistics providers is to find out if the provider can satisfy both their short-term and future needs.
Look into their customer testimonials and reviews to see what their customer service is like and how satisfied their existing customer base is. Ask for references if need be. Another thing I’d say is extremely important is to run a credit check on potential logistics providers to ensure they have enough income, revenue, and cash flow to sustain operations.
Some of the metrics I’d use to measure their performance would include:
- Credit check results: High credit score and high credit limit, low Days Beyond Terms score (under 5 days), low percentage of past due payments.
- Efficiency and cost improvements: How their services/solutions have improved productivity for your teams and resulted in cost savings.
- Customer satisfaction and retention: How their services/solutions have led to higher customer satisfaction and retention rates.
What are some of the key factors that influence decisions when selecting logistics providers, and what advice would you give to other ecommerce professionals looking to make similar choices?
There are several factors that come into play when selecting logistics providers. Obviously, the cost will factor into the decision. But I don’t think it’s the most important factor. I’d say factors like scalability, operations capabilities, and efficiencies driven by tech/automation will be more important to companies.
With rising inflation and a looming recession, I’d advise companies not to rush into making any decisions. Do your due diligence and vet everyone you work with. Make sure their cash flow is strong enough, and their finances are in good order before you sign any contracts.
Also, make sure they have a good track record of paying their invoices on time. That could directly impact your own costs and financial stability.
Can you please share five innovative or unconventional strategies to reduce ecommerce logistics costs?
- Run international credit checks on your suppliers: Make sure your suppliers have sufficient cash flow and income to complete your production orders. You don’t want to hand over a large percentage of your orders only to find out a supplier falls short of cash and will shut down.
- Create a code of conduct for your suppliers: Make sure this code of conduct clearly outlines what your expectations are and what the consequences are for violating the code of conduct. It’s important that you don’t just post the code of conduct on your office walls. And just sending a digital copy of it or mailing posters to your suppliers isn’t going to cut it either. You need to make sure all your suppliers fully understand the code of conduct, and you need to carry out regular audits of your suppliers’ factories to make sure they’re adhering to it.
- Screen your international suppliers (and the directors in the company) against real-time sanctions databases, global enforcement lists, adverse media, state-owned enterprises, and Politically Exposed Persons profiles: Don’t assume all suppliers have the same mindset and approach to corporate social responsibility (CSR) as you do. And don’t just take their word for it. Do your research and let the data tell you for certain. Remember, it’s not just about how responsible and ethical you are. What your suppliers do, how they treat their workers, and what activities they engage in all have repercussions for your own business—from damaging your reputation to reducing customer trust and loyalty to negatively impacting sales and revenue growth.
- Build compliance workflows into your decision process with suppliers: If you work with multiple international suppliers, you’ll want to automate the decision process. Vetting every single supplier will take a lot of time and could lead to things falling through the cracks. For example, you might miss that an international supplier has engaged in bribery or slave labor. Both are inexcusable practices. And even though your business isn’t the one engaged in those activities, your business can still suffer as a result. That’s why it’s important to build compliance rules and decision models to make the right decision quickly. Plus, you can standardize the criteria you use for every supplier. By using the same rules and criteria for every supplier, you’ll make your business more transparent and less likely to be accused of playing favorites with certain suppliers over others.
- Make sure you have a digital audit trail to prove compliance with federal and state laws: There are several federal and state laws that outline the requirements for supplier due diligence. For example, the United States-Mexico-Canada Agreement (USMCA) has provisions that require companies to take measures to prohibit the importation of goods produced by forced labor, including forced child labor, to address violence, sex-based discrimination, and immigration protections in the workplace.
If you could start a movement that would bring the most to the most people, what would that be?
I’d happily start a movement to make sure teachers (across every subject and every country in the world) are paid what they actually deserve. These are the people that shape our children’s understanding of the world and nurture their ideas. The thought that they are paid so little and struggle to make ends meet just irks me. It’s not right.
What "next big thing" tactic or strategy should leaders in ecommerce be digging into?
Supplier due diligence and digitally transforming financial processes are the two next big things.
What is everyone wrong about in ecommerce?
Brick-and-mortar still matters. It’s about understanding the relationship between the two.
What are you reading right now?
I’m reading The Accident by Daniel Hurst.
What product, tool, or service do you wish existed?
Flying cars—then we wouldn’t need airplanes anymore.
What product are you obsessively using right now?
I have to admit, I’ve been sucked into the ChatGPT vortex.
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