Amit Mathradas of Avalara: 5 Things You Need To Know To Create A Highly Successful E-Commerce Business

An Interview With Jerome Knyszewski

Remove risk — Online shopping prevents consumers from feeling or trying products as if they were in a store. Because of this, there is added risk associated with purchases, especially if a product doesn’t work out. Ecommerce retailers can remove risk for consumers by offering a clear returns policy or refund options if purchases do not work out. By making it easy for shoppers to change their minds, consumer confidence increases, and loyalty can be established.

As part of my series about the “5 Things You Need To Know To Create A Highly Successful E-Commerce Business”, I had the pleasure of interviewing Amit Mathradas, president and COO at Avalara where he manages global growth operations and oversees sales, marketing, business development, customer experience, and professional services. Throughout his career, Amit has focused on serving the small business category with tools and services to help that segment grow and thrive in the global economy. Prior to Avalara, Amit was the general manager and head of the small and medium business segment for North America at PayPal. He also served in senior leadership roles at Web.com and Dell, focusing on serving the needs of small businesses by developing partnerships and go-to-market strategies.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I got my professional start overseeing Dell’s sales of third-party monitors and displays as a product manager. In fact, in my early days at Dell, my brother also worked for the company. From there, I spent 14 years in various roles at Dell ranging from product management to serving as the general manager of Dell Small Business. It was after my role working with small businesses that I found my true passion for helping merchants grow their operations through the application of technology. After Dell, I spent a few years at Web.com before going to PayPal where I served as the general manager of the company’s North American small and medium business unit.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

While I wasn’t around for the early days of Avalara, our CEO Scott McFarlane regularly evangelizes the mission our founders set out on more than 15 years ago. We all know that taxes have been around since the dawn of humanity and that the United States was founded on the basis of a tax dispute. Nearly every person and business in the world is impacted by indirect taxes and is burdened with managing their obligations. For as long as we can tell people have been managing tax manually using spreadsheets and personnel to stay compliant. Our founders knew that there was a better way to manage compliance through the use of technology. They also knew that they couldn’t accomplish their mission alone and that they would need partners to bring our products to customers. As a result, Avalara has worked to create the industry’s leading partner ecosystem of more than 700 invoicing, billing, and technology partners that enables Avalara to automate tax compliance virtually anywhere an invoice is created.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

The early days of my career were relatively calm. I was able to work with interesting product sets and make my way up the ladder. It wasn’t until I made my way into the middle of my career right before I took my first executive role that I faced a challenging time.

Prior to becoming an executive, I had to do a rotation as a chief of staff to learn and hone in on several necessary skills to take on the next level. At that time, I was paired with a senior executive that would serve as my mentor. I quickly learned that our basic leadership styles were fundamentally different. The executive’s leadership style was one marked by instilling fear and using intimidation to get results — something I disagree with. The main challenge wasn’t that I didn’t agree with his leadership style, but that there was very little I could do about my situation. I could try to find another job but that would have put a stop to my growth, or I could quit for which I wasn’t in a financial position to take that risk.

Ultimately, I stuck it out and turned an otherwise negative experience into one that I could learn from. I made note of the worthwhile lessons I could apply throughout the experience, but I really prioritized learning what not to do as a leader. Those lessons have been invaluable throughout my career because I was able to learn firsthand just how detrimental poor leadership can be to teams, an organization, and the bottom line. I can say with confidence that I was miserable for most of that experience, but in hindsight, I am grateful for it because it helped me create a toolkit for the type of leader I wanted to be, as well as the kind I did not.

So, how are things going today? How did your grit and resilience lead to your eventual success?

Things are going extremely well in my career today. I’ve been able to enjoy more responsibility and make a larger impact on organizations throughout the roles I’ve had as an executive. I truly believe that none of the success I’ve had in my career would have been possible without the lessons I learned on poor leadership earlier in my career.

I think it’s important to note that we will all likely go through experiences in our careers that are less than desirable. While it may be difficult to see the light when you’re in the midst of those challenging times, I can assure you from my experience that they are often a gift. I was able to take a challenging time in my career and turn it into an educational foundation that has served as the basis for the rest of my career. I know that I wouldn’t be in the position I am today or have gotten here as fast as I did if I hadn’t weathered that negative season.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

When I started in my first role at Dell, I was still actively playing rugby in my free time. Every Tuesday, Thursday, and Saturday night I would be at rugby practice, which translated into cuts, scrapes, and bruises the following days while I was at the office. In all honesty, there were some days that I looked like I had been in a bar fight the night before.

For those in the company who didn’t know me, their perceptions of me were often, let’s say questionable. It took me a while to catch on and for the first six months of my time at Dell there was a running joke about me and my bruises. I ultimately began letting team members know about my love for rugby and how I was actively playing in my spare time, which helped correct perceptions and amend my reputation.

I think the biggest takeaway from that lesson is that when people say perceptions matter, they’re right. How you carry and present yourself in the workplace has a direct impact on your position within the organization and with others. However, we should all remember that we should read the full book instead of just looking at the cover. Assumptions about others can have a negative impact on their careers, so taking time to understand those you’re working with is important to their success and the success of your teams.

What do you think makes your company stand out? Can you share a story?

There are three key differentiators that allows Avalara to stand out — tax content, technology, and integrations.

In order to get tax compliance right, businesses need access to up-to-date and accurate tax rules and information. Avalara supports indirect tax content from more than 190 countries, and we are continuously expanding into new areas like beverage alcohol and lodging compliance to serve more customers. We also recently acquired Transaction Tax Resources (TTR), a leading tax content subscription provider, to expand our tax content database and enhance our solutions to serve the world’s largest companies.

Avalara is also a pioneer in applying advanced technology to solve tax compliance. We were among the leaders to take a cloud-first approach to develop our technology. We continue to leverage emerging technologies like artificial intelligence and machine learning to improve our tax content database and the operational efficiency of our solutions. In 2019, we acquired Indix AI technology to aggregate, maintain, and deliver global product and tax information.

Lastly, Avalara has the ability to handle tax compliance across virtually any software that generates an invoice. This means that if a retailer has an enterprise resource planning (ERP), point of sale, and customer relationship management (CRM) system, Avalara has the ability to integrate data across all of these and ensure automated tax compliance through our strong partner ecosystem of more than 700 cloud integrations.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

There are a number of tips out there that I wish I took to heart more closely. For me, I would tell others to make sure that they are taking a few days off every so often to get away if you’re fortunate enough to do so. The pandemic has made that more challenging but getting away to a remote cabin or going hiking is a great way to unplug and refresh.

I think it’s also important that we spend more time with those that we love. During the pandemic, I’ve been spending more time talking to my mom via video chat. I’ve been able to find what I’ve been missing by spending more quality time together, asking questions, and learning more about those I care for. Spending time with your loved ones should always be a priority and can help keep you centered amid stressful and busy seasons.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I’ve had a number of mentors throughout my career — all of which have taught me different lessons. Some mentors have been short-term and specific to certain points in my career, and others are still close friends to this day. Above all the great mentors I’ve had, my older brother has always been a constant in my life.

We both work in similar roles and industries, so having an older brother who can share his experiences and knowledge has always been important to me. Earlier in my career, he encouraged me to go back to business school, which has had a lasting impact on my career. He has also always encouraged me to look at roles through different lenses to take all factors into consideration. To this day, I will still give him a call when I’m stuck and need a new perspective or just want to talk through challenges.

Ok thank you for all that. Now let’s shift to the main focus of this interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that eCommerce businesses are implementing to adapt to the new realities created by the Pandemic?

The resiliency of businesses — small and large — has never been more evident than it is today. At the onset of the pandemic, many businesses were forced to change their entire business operation virtually overnight. At Avalara, we’ve seen many of our existing and new ecommerce customers embrace technology to adapt to their new realities created by COVID-19.

Many ecommerce businesses are leveraging tools like social media to bring the in-store shopping experience online. For example, some online make-up and clothing retailers allow customers to use their social media platforms and cameras to “try-on” products before buying.

Another example of how ecommerce businesses are adapting is through their investments to increase efficiency and save money. As online sales have expanded as more consumers shop online, many ecommerce merchants have offloaded backend processes to automated solutions. Everything from tax compliance to payment processing is being automated to reduce the burden on employees, focus more on serving customers, and cut costs.

Lastly, we’re seeing more ecommerce sellers utilize buy online, pick up in-store options for customers. The pandemic has wreaked havoc on supply chains, which has created disruptions to shipping and delivery. Customers have been able to do their shopping online and streamline the delivery process by opting for contact-free pickup at physical stores in their areas.

Amazon, and even Walmart are going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise retail companies and eCommerce companies, for them to be successful in the face of such strong competition?

We’ve all likely come across these direct-to-consumer companies recently. I find myself being drawn in by advertisements on my social media feeds from these very companies. While it’s true that they tend to offer cheaper prices than more established brands in the US and Europe, there are a number of factors that ecommerce retailers can focus on to stay competitive.

Aside from price, these direct-to-consumer sellers have a number of downsides. In most cases, the shipping times are lengthy, the quality of the products are hit or miss, and being able to return products that don’t work out is virtually impossible. These are the areas where ecommerce retailers can stand out.

Focus your business on providing value across the customer experience, including speed to market, the reliability of products, and easy returns. Invest in distribution and fulfillment channels to reduce shipping times. Ensure that you’re providing quality products and in the event a customer isn’t satisfied, enable them to easily return products or offer money-back guarantees. At the end of the day, price is only one variable consumers consider when shopping. More often than not, consumers will pay a slightly higher price for improved shipping, quality, and returns options.

What are the most common mistakes you have seen CEOs & founders make when they start an eCommerce business? What can be done to avoid those errors?

There are a number of pitfalls that are associated with starting any type of business. For newcomers to the ecommerce world, it can be easy to be overwhelmed by the amount of options that they encounter. Everything from ecommerce platforms to payment options has an impact on the customer experience and business operations, so it’s important that ecommerce leaders have a solid grasp of their business goals and audience.

For example, there are a number of ecommerce platforms available to support a range of businesses and budgets. If you’re a small clothing retailer, it’s critical that you can answer questions like, “How many products do I plan on selling?” and “What features will I need?” before selecting the ecommerce platform that’s right for your business. If you plan on selling outside of your country, paying close attention to payment options and shipping services is necessary to ensure you’re creating a platform that can support your potential customers and allow your business to scale over time.

In your experience, which aspect of running an eCommerce brand tends to be most underestimated? Can you explain or give an example?

I’ve found that sales support functions (tax compliance and logistics to name a few) are among the top business functions that ecommerce brands overlook or underestimate. It’s easy to see why something like tax compliance is often underestimated because it’s a function of business that provides no tangible benefit to the customer or bottom line. However, failure to get tax right has implications that span customer experience and finances. And unfortunately, many ecommerce merchants are still managing their tax compliance on their own as their business grows and tax obligations increase.

If you take the U.S. as an example, you’ll quickly see just how complicated tax can be. In 2018, the Supreme Court decision in South Dakota v. Wayfair Inc. made it possible for states to tax the sales by remote sellers regardless of a business’s physical presence in the state. So, if I own an ecommerce business based in North Carolina, but sell to customers in 12 other states, I could potentially owe sales tax in 13 states.

If my business doesn’t have the processes and technology in place to manage those tax obligations, I run the risk of facing an audit and significant fines. Not only does my business face regulatory risks, but if I’m calculating sales tax on my online sales incorrectly, I could potentially be overcharging customers and increase the chance of cart abandonment at the time of checkout.

The risks associated with getting tax wrong pose a significant threat to ecommerce businesses, which makes it clear just how underestimated the process of tax compliance is.

Can you share a few examples of tools or software that you think can dramatically empower emerging eCommerce brands to be more effective and more successful?

Ecommerce is heavily driven by convenience. As a result, tools and software that improve the customer experience through convenient, personalized shopping experiences are powerful for emerging ecommerce brands. One example of where software can make an impact on the customer experience is at checkout. Customers want to pay with whatever payment type they choose, so having flexible options to process payments is key. Incorporating alternative payment methods like PayPal or Apple Pay can help convert more customers by making the checkout process as seamless as possible.

Shipping tools and software are also game changers for ecommerce merchants. While most ecommerce platforms include a variety of shipping options like drop shipping, printable shipping labels, and pre-setup shipping providers, solutions exist to help ecommerce sellers fulfill orders on their own. Applications like ShipStation help automate shipping for merchants of all sizes, and offer small businesses discounted shipping rates with USPS, UPS, and FedEx.

It probably goes without saying that tax automation software can also empower ecommerce merchants in a number of ways. Automating all aspects of tax compliance from calculations to returns offloads a significant burden from sellers and allows them to focus on what matters most — serving customers.

As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies an eCommerce business should use to increase conversion rates?

The online customer journey has several different stages from customer acquisition to delivery and they each have an impact on conversion. While there are a number of strategies ecommerce sellers can employ to improve conversion rates, three examples come to mind:

1. Customer support — Consumers want to be able to ask questions and get answers while shopping online. Being able to support customers as they browse your online store will keep them on the site longer and increase the likelihood of a purchase. This can be done with videos and tutorials or even click to chat to make it more engaging.
2. Accurate costs — The average cart abandonment rate as of 2019 was 69.57%, with 53% of shoppers citing unexpected costs (shipping, tax, and fees) as the main cause. Merchants should ensure that all costs all calculated early in the checkout process to avoid surprises and cart abandonment.
3. Timely fulfillment — As consumers have gotten more accustomed to the realities of same-day shipping, their expectations of fulfillment have also changed. Merchants that offer quick and easy fulfillment services are more likely to increase customer loyalty and drive sales.

Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that an eCommerce business can earn a reputation as a trusted and beloved brand?

As more transactions and business take place online, there is an increasing focus on privacy and data security. Customers want to have personalized shopping experiences, but not at the expense of their personal privacy. One way that ecommerce businesses can earn a reputation as a trusted and beloved brand is by investing in technology that can learn about customers and provide tailored shopping experiences but have the security needed to protect their payment information and other personal details. This is a delicate balance for merchants to maintain, but if you’re able to tailor shopping experiences by using personal data consumers provide without compromising their privacy, brand loyalty and trust is destined to grow. Another way is to provide stellar experiences when things do go wrong. Provide easy refunds and returns and comp a few items from time to time. I would suggest merchants keep a budget on-hand to allow for this level of service.

One of the main benefits of shopping online is the ability to read reviews. Consumers love it! While good reviews are of course positive for a brand, poor reviews can be very damaging. In your experience what are a few things a brand should do to properly and effectively respond to poor reviews? How about other unfair things said online about a brand?

When working with consumers, a business will inevitably receive both positive and negative feedback. While there’s no one-size-fits-all to managing poor reviews, there are key components of brand management that every ecommerce business can leverage.

First, it’s important that businesses acknowledge an issue when it arises to show the customer that you’re aware of the concern and are actively working to address it. Likewise, when appropriate, it’s important to apologize or sympathize with the customer to further validate their concerns and reassure them that you’re working on a resolution.

Other tactics include providing detailed explanations in response to the negative experience to clear up any confusion. It’s important that any explanation does not come off as defensive or accusatory to avoid further escalation. In some cases, providing compensation or incentives to the reviewer may be necessary to resolve the issue.

There are also creative ways brands can address unfair things said about the business online. While getting into a Twitter feud is never advised, brands can combat unfair and untrue accusations made by promoting positive reviews and highlighting customer successes online. While the customer may not always be right, they influence others, so focusing on the positive can help maintain brand integrity and exhibit goodwill to other prospective customers.

Ok super. Here is the main question of our interview. Based on your experience and success, what are the five most important things one should know in order to create a very successful e-commerce business? Please share a story or an example for each.

There are many factors that go into running a successful ecommerce business, but some of the main things one should know include:

1. Provide value throughout the shopping journey — Consumers are not always looking for the cheapest price or best deal online. It’s important for ecommerce merchants to invest in touch points throughout the customer journey to create confidence and capture their attention. For example, using video customer testimonials to describe a product that consumers can’t see or feel can help them make buying decisions online. There are also many online retailers that are using popular channels, like social media, to aid in the shopping experience.
2. Optimize the checkout process — Online shoppers want to easily and securely make purchases. To avoid cart abandonment, offering flexible payment options like Apple Pay or PayPal allows consumers to make purchases using the payment method of their choice. It’s also important that all costs are readily apparent at checkout, which means getting the tax and shipping costs calculated accurately in-cart to avoid surprises at checkout.
3. BOPIS (Buy online, pick-up in store) — Providing flexibility should be exclusive to the browsing and checkout experience. Consumers enjoy options when it comes to receiving their online purchases, especially during the pandemic. Offering BOPIS to shoppers provides a cost-saving and flexible way for them to receive their purchases without having to stand in lines or even step into a store in some cases.
4. Remove risk — Online shopping prevents consumers from feeling or trying products as if they were in a store. Because of this, there is added risk associated with purchases, especially if a product doesn’t work out. Ecommerce retailers can remove risk for consumers by offering a clear returns policy or refund options if purchases do not work out. By making it easy for shoppers to change their minds, consumer confidence increases, and loyalty can be established.
5. Mitigate supply chain disruptions — The world of same day and two-day shipping has changed consumer behavior for good. Standard shipping times are now less than ideal, and consumers expect to have their products delivered in a timely manner. For ecommerce retailers, effectively managing inventory, understanding shipping options, and addressing compliance obligations all have a direct impact on delivery times. Technology is essential to help online retailers manage their supply chains to avoid shipping interruptions, which could send an overwhelming positive customer experience into turmoil.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

While this isn’t a new movement, it’s one that is close to me personally. I think the single most important thing we can do is equip others with education, specifically those in underprivileged countries or regions. I believe the age-old saying about teaching a man to fish and he’ll eat all of his days rings true. If we invest time, money, and resources into educating those less fortunate about the basics of healthcare, finances, and other daily activities, we can help more people than ever expected. Think about it: the impact of just one person investing in educating others can create a ripple effect that has an exponential amount of positive implications.

How can our readers further follow you online?

You can follow me on Linkedin at https://www.linkedin.com/in/amitmathradas.

This was very inspiring. Thank you so much for the time you spent with this!

About the interviewer: Jerome Knyszewski (Kenchefski) is the CEO of HeavyShift. Jerome serves as an advisor to CEOs of Fortune 500 companies as well as entrepreneurs who disrupt their industries and therefore tend to be targets of malicious online attacks. His company builds, protects, and repairs the online presence & reputation of many celebrities, products and beloved brands.