The Next Generation Of Inventory Management: Our Seed Investment In Cogsy

Dawit Heck
Dec 22, 2021 · 4 min read
Image courtesy of Cogsy

by Scott Friend and Dawit Heck, Bain Capital Ventures

We’ve all had that terrible feeling of clicking on a product, hesitating to buy it, and then going back the next day (or even just a few hours later!) only to realize the color and size you wanted is out of stock. Every year, retailers and brands leave billions of dollars on the table due to inventory issues; either products are more popular than expected and quickly go out of stock, or the opposite is true, causing overstock.

As much as possible, brands want to avoid both scenarios, striking a delicate balance between demand forecasting and vendor lead time. The illusory goal is to get inventory “just right” — the right quantities shipped on time, and not one unit extra. This is true now more than ever, as more than 40% of retailers are looking to invest in real-time supply chain visibility solutions in 2021.

Optimization of inventory and merchandising decisions has always been important to retailers of all sizes but historically could only be accomplished with enterprise-scale solutions. Software platforms for managing pricing, allocation, assortment planning, markdowns, and promotions were costly and complex, limiting their use to larger retailers. Many retailers don’t use inventory software at all. The state of the art, as we saw in the enterprise twenty years ago, is currently manual aggregation of disparate data sources and spread-sheet level analysis.

If you talk to most merchandise and financial planners at retailers or direct-to-consumer brands, they’d likely say their primary tool for assortment and merchandise planning, as well as inventory forecasting, is good ‘ol reliable Microsoft Excel. However, manually aggregating data and churning through dozens, if not hundreds of spreadsheets, per month results in a slow and often inaccurate process of analysis and action around reorders or overstocks and clearance.

It is no secret that inventory planning and ongoing in-season management is a complex endeavor. Because of the complexity, small merchants have had few easy-to-use (and affordable) tools to help make more informed purchasing and merchandising decisions. A newer generation of solutions have emerged in the past few years that are “excel-lite” but are limited in true forecasting and optimization capabilities.

At BCV, we have been on the hunt for more SMB-focused, cloud-based, self-configurable inventory management solutions appropriate for the vast universe of small online sellers. These retailers and brands want to more effectively, and simply, make sense of inventory levels and how they impact marketing decisions to drive more sales and gross profit. For smaller sellers, fueling growth of the long tail starts by fueling their most prized asset, inventory.

That’s why we are so excited to have the opportunity to partner with Adii Pienaar, CEO and founder, and the rest of the team at Cogsy! BCV is a supporting investor in Cogsy’s $6 million seed round announced today.

Cogsy’s vision is to be a “small online seller’s intelligent co-pilot,” as Adii has reiterated, turning all facets of retail merchandising from purely retrospective reporting into a competitive advantage. Cogsy arms modern brands with greater agility, alignment, and control over their largest area of investment, inventory.

To enable this, Cogsy has started with a backorder solution that enables brands and retailers to give customers an accurate view of when items will next be available to ship, despite being out-of-stock. This simple tool is a bit of a Trojan horse for Cogsy to engage with the retailer, demonstrate quick-time-value, and, along the way, capture the data needed for more extensive inventory and price optimizations.

Image courtesy of Cogsy

More importantly, the person leading the charge to change the way inventory management operates has exemplified domain expertise on both product building and go-to-market. Adii previously co-founded WooCommerce, an open-source winner in the e-commerce platform category alongside Shopify and BigCommerce, and is keen on using his experience to build something that makes it easy for product, marketing, and finance teams to work together to drive business growth.

We are both thrilled and honored to partner with the Cogsy team along their journey to recreate the future of inventory management for brands and retailers. To learn more about Cogsy, check them out on:

P.S. The team is (always) hiring!

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