Sophic Capital client Jasper Commerce (TSXV:JPIM) is a product information management (“PIM”) leader empowering eCommerce merchants to manage and merchandise their products from a single dashboard. With several familiar global brands as customers, including Skullcandy, Samsonite, and Jamieson Vitamins as well as partnerships with leading eCommerce providers like Shopify, Square, and BigCommerce, Jasper PIM allows merchants to sell more, sell faster and work smarter, across various eCommerce channels. We recently sat down with Jasper Commerce CEO Jon Marsella to learn more about the Company, the industry, and Jasper’s opportunities.
Q: As a merchant why use a PIM at all? Doesn’t it complicate the technology stack needlessly and why can’t I just use Shopify or another eCommerce platform to do the same thing?
A: PIM has only been around for a few years, so broadly speaking, it’s still under-the radar for some businesses. But the reason to use Jasper’s PIM is to help businesses reach new selling opportunities – quickly, easily, and across multiple eCommerce marketplaces and channels. We do this by allowing businesses, whether they are large enterprises or sole proprietors, to manage all of their product information from a single dashboard, or what we like to say – “a single source of truth”. Contrast this with merchants manually managing product information via spread sheets and numerous other systems, leading to errors and lost productivity due to the increased time needed to manage these solutions.
Q: Beyond this core use-case, what are some other benefits of using Jasper’s PIM that enhance merchants’ productivity?
A: Our PIM allows businesses to establish rules that enrich product data, make it customizable across multiple marketplaces. So, our solution actually simplifies the tech stack and streamlines our customers’ operations – we provide a single location to manage digital assets and content for products as opposed to a merchant having to go to each Shopify store or each eCommerce website to manage multiple times, increasing the merchant’s costs, time consumption, and likelihood of mistakes.
Q: What would be an interesting use case for Jasper’s PIM that merchants may not know about or have been struggling with?
A: One common use case is cross border regulations. For example, when it comes to health ingredients, a merchant may have to deal with the FDA in the U.S. and Health Canada in Canada. Some eCommerce sites and payment systems may not allow these types of transactions due to potential liabilities. With Jasper’s PIM, merchants can create rules that would ensure only Canadian-approved products are sold on Canadian eCommerce stores and not in the U.S. As the merchant adds similar products, they enrich each product’s marketing, merchandise them, set the rules, and then let Jasper’s PIM handle the syndication.
Q: What happens if one of the rules changes?
A: It gets applied to all of the products that are associated with that rule. So going back to the health ingredients example, if the FDA approves a Canadian-based supplement for U.S. consumers, the merchant would change the rules and each product with that supplement could be syndicated to the PIM’s American eCommerce sites. Stay tuned for our next report, where we discuss Jasper’s target markets, market position and competitive differentiators. We recently had a discussion with Sophic Capital client Jasper Commerce (TSXV:JPIM), a product information management (“PIM”) leader empowering eCommerce merchants to manage and merchandise their products from a single dashboard. We continue our conversation, where we discuss Jasper’s target markets, market position and competitive differentiators.
Q: How does Jasper Commerce see itself as uniquely positioned in this growing PIM industry for explosive growth?
A: It’s generally known that small-to-medium businesses (“SMBs“) constitute the largest number of businesses in the economy. When it comes to eCommerce, the largest segment of online sellers fall into what we call “micro-merchants” – those businesses that do under $250,000 in annual gross sales receipts. In the United States, although micro-merchants don’t cumulatively generate the most ecommerce revenue, there are over 17 million of them – the largest segment, according to Square. In addition, SMB merchants with under $1 million in annual receipts, and the mid-market with $1 to $20 million in annual gross receipts, total another 3 million and 1 million merchants respectively. At Jasper Commerce, we focus on this core group of merchants, and provide them the tools to scale their eCommerce business to the next level.
Q: What types of investment should an Enterprise expect to make in a PIM (average costs, sales cycle timing, implementation and integration) and what types of typical ROIs can customers realize over what time frame?
A: For an average Jasper PIM Enterprise Merchant (those doing more than US$50 million in annual revenues) they will typically invest $50K-75K for their first year (upfront) and $3,750 USD / month in ongoing license costs. A typical sales cycle is four to eight weeks from contact to contract. Onboarding can occur as quickly as two weeks and take as long as six to nine months depending on the size of Enterprise and complexity of their eCommerce technology stack. Many of our Enterprise customers engage in a V2 or V3 phase whereby they integrate Jasper PIM with other business systems such as Oracle, MS Dynamics, JD Edwards and others.
Many of our Enterprise customers (typically within six to twelve months of operating) cite impressive KPIs such as: 18-20% reduction in operating costs, 10-15% increase in online sales conversion, a 3x improvement in speed to market, and 5-8% reduction in order fulfillment modifications or returns.
Q: How does Jasper expect its SMB eCommerce solution in a box will revolutionize the PIM space?
A: We do serve many small merchants and micro-merchants. There’s a large group of businesses that even do under $100,000 of annual revenue. So, what we did was, take our software-as-a-service enterprise solution and stripped out a lot of the more complex features not needed by small businesses and micro-merchants. This is our Ultra-lite product, which costs only $99 per month – an attractive price point for extremely small merchants who otherwise likely would get neither access to nor enjoy the benefits of a product information management solution.
Q: And how have these small merchants reacted to Jasper’s Ultra-lite PIM solution?
A: Small merchant feedback has been overwhelmingly positive. They love the scheduling features, batch management for their products, the simplification of their product workflows, and the ability to get away from what we call “spreadsheet-Hell”. Our Ultra-lite customers often say they especially like Jasper’s ease of use and simplicity and its ability to provide enterprise-like capabilities when ready.
Q: How is Jasper Commerce differentiating itself against other PIM solutions or competing technologies?
A: Where we’ve been intentional is to focus on PIM and nothing else. PIM competitors seem to have much broader solutions targeting other operations in the enterprise that aren’t PIM related. Giving micro-merchants the ability to turn on enterprise-like features is also something that we don’t see a lot of competitors doing. We make our solution friendly to merchants, and what they want is fast, easy, cost effective product information management that minimizes time and cost consumption. Data enrichment and having the most publication channels for syndication reach are also strong differentiators. Regarding “PIM-look-alikes”, we offer end-to-end, information rich, product information management whereas competing solutions often supply parts of what we do.
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