Thought Leaders in E-Commerce: Flow Commerce CEO Rob Keve (Part 2)

Sramana Mitra: How do you charge?

Rob Keve: We charge a subscription. We’re a software platform. We should not be a pure revenue share. You pay the subscription and can use it for one country or 200 countries. We have many different modules and you can access all of them as much as you like.

Sramana Mitra: The core business model is all subscription. There is no transaction fee model?

Rob Keve: On the payment side, we have a gateway that allows them to maximize international sales on the checkout. If they use that, there is a transaction cost.

Sramana Mitra: What percentage of your revenue is subscription fees versus transaction charges?

Rob Keve: The range of the relative revenue share on the subscription is single digits. It could be as low as one percent. On the payment side, it depends on the payment methods online brands are offering their customers. Payment methods typically charge between 1% and 4% to merchants to capture the payment. 

Sramana Mitra: Do you track the total billing going through your system?

Rob Keve: Do we track the gross sales by merchant per country? Yes. We’re very proactive about giving them advice on how to grow it further. 

Sramana Mitra: I would like to double-click on that. There’s a wealth of data and trend information in that. What countries do you impact the most?

Rob Keve: I’ll give you some broad brush strokes, but it’s very category-specific. Things like regulations impact your ability to sell some products to some countries. Makeup is a good example.

In addition, duties need to be paid on many items. There’s a very complicated model behind this. Depending on the category, they may be low and won’t impact sales, or they can be higher.

The main lanes that we think of are English-speaking countries like Canada, UK, Australia, South Africa, and New Zealand. The next main line is higher GDP countries outside of that. Then there is Southeast Asia like Korea, Taiwan, Hong Kong, and Singapore that show strong demand for luxury western brands.

The fourth category is surprise countries. They appear in the top 5 or 10 unexpectedly. Examples of that would be UAE, Brazil, Israel, and Holland. They could have two to four times the percentage of customers purchasing cross border.

Sramana Mitra: You indicated that there are similar variations in customer acquisitions and marketing. Could you elaborate?

Rob Keve: How consumers find brands and what channels the brand uses to attract customers varies a lot by country. In turn, SEO and SEM spend varies a lot by country and by category. Brands will get a sense for how acquiring customers in different geographies compares to their domestic market.

Naturally that distribution looks very much like you’d expect. There are countries where ad spend is significantly cheaper and can be more cost-effective than domestic to acquire customers through. The US tends to be at the more expensive end generally. There are plenty of pockets where it’s cheaper to acquire customers internationally. 

This segment is part 2 in the series : Thought Leaders in E-Commerce: Flow Commerce CEO Rob Keve
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