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STEP BY STEP Season 10 Episode 3
November 23, 2022

[STEP BY STEP] Make B2B Sexy Again

Balance strives to make online B2B payments something that doesn’t suck. Why is it important to take action and learn as much as you can about digitizing your business? How do you move from a “keep our business alive” mentality to “grow our business in 2023” strategy? Why is B2B such a vital part of the new world of eCommerce? Listen Now!

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this episode sponsored by

Old World/New World

  • “Because there are more opportunities, more relationships that can be formed, and because discovery is so much higher due to digitization of B2B, we're actually moving into an unknown area in B2B, which is you don't know or have a relationship with the other person on the other side of the transaction.” - Phillip
  • “B2B is the economy. It's not a nuance. It's not a segment of something. It’s really the future of the economy.” - Bar
  • “If you have a relationship with trust, you better be ready to also digitize or you're going to have the Chem Directs and the Steel Directs and the Lumber Directs of the world coming for you.” - Brian
  • “If you're not digitizing at some level, you will get hurt. You will have to choose digitizing your business or working with platforms that are digitizing your sales channel. You have to do something.” - Bar
  • After such a huge wave of brand building of business tools in DTC, B2B is a natural evolution to get the products that were built into other channels
  • Continuing to build digital disruption is actually a moat that you can build around owning your corner of distribution
  • Leveraging your brand to create your own niche marketplace and leveraging your brand to increase supply are trends with enormous potential
  • Business teams need to adapt as technology continues to advance and AR will be something Balance will enable, not erase

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Brian: [00:00:46] Hello and welcome to Step by Step, a podcast by Future Commerce, presented by Balance. I'm Brian.

Phillip: [00:00:51] I'm Phillip, and this is Episode 3 of our 10th season of Step by Step. I think that these episodes build on each other. So if you're just tuning in here at the end of our 10th season for Step by Step, go back, go back and listen to Episodes 1 and 2. You will not regret it, and it will set... They'll be the amuse bouche. They're going to set the tone for this giant meal we're about to eat because we are going to actually get into the nitty-gritty of the market opportunity and the sort of how, not just the why, but the how a business and certain industries are going to change the game with B2B payments. And no better person to talk about that with than Bar Geron, who is the CEO of Balance, who helped to support this season of Step by Step. If we were to look back, Brian, over the last few seasons of Step by Step, we've come a very long way.

Brian: [00:01:46] We have. We learned everything about investments and how venture capital and PE work, to how to compete with Amazon, to how to turn your customer service channel into a revenue-driving channel, and so much more. I mean, I can't believe all the topics we covered over the course of this.

Phillip: [00:02:10] It's wild actually. I was thinking too six seasons ago we were talking about DTC sort of at the early stage competing with more incumbent generational brands. We covered ground in Season 6, and we talked about how you make shipping transform from a cost center into a growth center. We've talked about cross-border and landed cost calculation. In fact, our seventh season of Step by Step. We produced a 60-page guide that was accompanied...

Brian: [00:02:51] So it's actually really impressive. I mean, it was a good guide, man.

Phillip: [00:02:56] Yeah, it was a great guide. And I'll tell you, Step by Step hasn't just changed how people are approaching learning about certain facets of eCommerce or what makes up eCommerce. Step by Step is actually changed Future Commerce as a company, and as a media business, in that it has helped us not just to understand first principles in certain areas and challenges that merchants deal with, but we've used Step by Step to educate ourselves on how to build better media and how to do it better. And we would love for you to talk back to us. Before we get into this last episode of this 10th season, I'd love for you to drop me a line and tell me what you've learned along this journey of the last few years. You can send us an email at, and we'd love to hear from you. All right, Brian, this is it. We're going to jump. We're going to jump into it. Bar Geron is on a mission to change the way that business is done, and he's doing that with Balance by revolutionizing payments for modern businesses and operators. He is going to tell us about how you can do that. And so let's go, without any further ado, to our discussion about the future of B2B payments, and maybe how to make B2B sexy again. It's Bar Geron, the CEO of Balance.

Brian: [00:04:22] Today on this season of Step by Step, we have another exciting guest for you. Bar Geron, Co-Founder and CEO of Balance. Welcome, Bar.

Bar: [00:04:31] Thank you so much. Happy to be here.

Phillip: [00:04:34] Yeah. Glad to have you.

Brian: [00:04:34] We are happy to have you. Yeah.

Bar: [00:04:37] Thank you. 

Brian: [00:04:37] We're excited about B2B. Let's go.

Bar: [00:04:40] Let's go.

Phillip: [00:04:44] We're bringing sexy back. 

Brian: [00:04:46] {laughter} We're bringing B2B back.

Phillip: [00:04:46] Yeah.

Brian: [00:04:48] Well, Bar, I mean, you have obviously built an incredible company. Why don't you tell everyone a little bit about Balance and your fascination with B2B, why it gets you so excited, and why you decided to go ahead and build this business right now? I'd love to hear your story.

Bar: [00:05:07] Yeah, so really Balance, just to give the context and starting with the bottom line, Balance is just trying to make B2B payments online something that doesn't suck. That's the goal. This is what we did from the early days, me and my co-founder, Yoni. It's our second company just for the context about ourselves. We grew up at PayPal together, had been there a few years, and did some Fintech companies. So Balance is really just an aggregation of insights from a long time in Fintech and eCommerce. We saw the digitization of B2B as it happens over the last ten years. It was slow, but then it became really fast. So for us, just seeing the lack of innovation and the adaptation for those types of buyers, there are all those statistics. One of them that I really like is that there's more than 70% of business buyers between the age of 25 and 35. They can't have this old way of doing things. It's so trivial. Every one of us consumers knows it really well. In consumers, the payments ends before it began. We don't even think about it. Credit card and done. Everything is reconciled fast. And in B2B, it's the worst thing in the world. It's awful. There's no payment. There's like an invoice. You're getting a piece of paper or an email. And then you need to circulate internally, you need to get approvals, then you're paying with checks so wires, and then the seller needs to wait. But wait, you need terms because you're paying on the 16th of each month because this is where you pay all your vendors. So the finance person is asking you to get terms, but you don't know what to do. You just want to pay for something because I don't know, you wanted all new chairs for the office. And it's a shit show. The interesting thing happening in the world is that B2B eCommerce started with the attempt to make things just more efficient on the merchant side. Let's create a front end to the ERP. ERP, the system of record for orders. This is where you create and make sure everything is aligned logistically as a seller, let's say, of steel. And now instead of buyers calling you and asking if there are items X, Y, and Z available, now they have a website to see it. Amazing, amazing. A big step forward. But now you did that. It's really nice. But then they still need to call you to manage this invoice thing. I'm talking like a 25 year old because this is the experience today in this world. So this is where Balance comes in and really to make it at a high level, Balance is a B2B payment platform for eCommerce. Essentially the high level of it is that we want to give buyers all the flexibility they need to support their business flow so they can get that invoice and they can pay with checks or wires or ACH debit or credit and they can get terms because this is what the finance person needs. We're not looking to disrupt how businesses want to do it. But on the receiving side, the merchant side is getting paid easily and instantly, reconciled like it was a credit card all the time. And this is important more than anything else because now there's opportunity to grow. All those buyers...

Phillip: [00:09:02] Let me jump in because this is like I think the biggest thing that maybe our audience understands. Some of the smartest people in retail and eCommerce listen to Future Commerce, so I definitely want to act as a surrogate for them. Technology is closing the gap here, but is it fixing the sort of systemic issues in the business that creates this friction around payment? And I guess my question to you would be, is there something that you've sensed in the world as an opportunity right now for the technology that Balance provides, that sort of frictionless and seamless and closing the gap and reducing all that friction that people have introduced in the old way of doing things. Do we now see the opportunity that adoption of technology says what doesn't have to be this way? Maybe we should rethink, rather than just try to put a new veneer of technology over top of our old processes, maybe we should be rethinking how we do business altogether. Or are we not there yet?

Bar: [00:10:07] I think it depends on where you are in the early adopter curve. Are you before the chasm or after? And I think at the end, going practical for a second, if you're a finance manager and you're looking to bar your supply of steel and there is someone in the organization, now there's a problem. I'm talking very practically. Let's take a use case.

Phillip: [00:10:40] I love it.

Bar: [00:10:41] So what is the type of opportunity that exists in the world today? There are supply chain problems. You hear about it all the time. You're calling your supplier that you worked with for years and years, and he doesn't get the supply he used to get because there are challenges in logistics in Asia or there's a war in Europe now. If there are no bottlenecks and there's no problem, you can continue working with suppliers for years. But if there are problems, the inefficiency of the market, the fact that you're working with one, two or five suppliers, taking prices up or closing down your business, if you're in the middle of a supply chain, if you're not the manufacturer and you're not the end user. So that type of situation created an acceleration. We're talking about COVID. We're talking about these years right now. It's been years of challenges. So there was an acceleration by sellers and platforms, innovators creating the ability online to search for metal or chemicals or textiles or things that are super untrivial for us as consumers. Like, "Really? You can buy chemicals online?" Yes. Go to And if you're a hospital and you're getting stuck and you can't buy the items, the things you need to save lives on a day to day basis, now you have an alternative. And not only do you have an alternative, but this alternative also creates the opportunity to get the best value and the best costs, which is something that you don't know. Discovery experience doesn't really happen when you have your existing suppliers that you're working with for years and years. Now you want to buy on that website, you're trying to check out, the old world, and those companies will have what? They will have credit cards because this is how the world works. You can only process credit cards online. This is what exists. So you're trying to do a credit card, You're calling your finance manager and he's saying, "Great that you found this alternative. You're amazing, but I'm not paying with a credit card. It doesn't work in my internal way of doing things with my accounting system. Give me an invoice. I will pay them on the 16 of each month." So the person just found the procurement guy, found this Chem Direct website, and is looking to purchase the things he couldn't find with his own existing suppliers. But now the supplier on the other side, it's a marketplace, so the supplier on the other side doesn't know this buyer. They don't have the trust. So how can this supplier give him the terms he needs in order to pay on the 18th of each month while he needs the chemicals today?

Phillip: [00:13:48] Hmm.

Bar: [00:13:49] Not only that, he wants to do it in a push payment. He wants to do a wire on the 18 of each month. So the likelihood of getting paid is going down. If it was checks, it gets down even lower and checks are still very common. So the finance guy will do his thing because this is how the business works. And there is a general trend of innovation in that space. But at the end, the essence in his day to day, he needs that invoice. This is how accounting works. But the problem is that the supplier and the buyer in this new world that is not based on relationships don't know each other and the supplier can't give the buyer what he needs to make a payment, so it gets stuck. Discovery works well, Payments get stuck.

Phillip: [00:14:44] This is huge. This is an important part to distinguish that there is a complete flip of the psychology, right, Brian, where you have on the consumer side, there's very little trust between the consumer and the brand typically. And that's because we do business with n+1 brands. There's always a new one out there for us to have to worry about. You typically have a fixed number and network of known entities that you're working with in a business fashion, or that's what typically has happened. I think we're going to get there. It's talking about what the world might look like here coming up pretty soon. But you tend to have relationships with each of these. And so the trust is higher. The trust factor is higher. And when the trust factor is higher, you don't have to pull resources and finances from somebody, like as a token of trust I've given you my credit card. I'm going to debit. I'm going to pull the funds out of your account. You're telling me, Bar, that it's actually the other way around and that in this trust-based world of B2B, its push and what we're trying to do is understand that the business buyer is becoming a lot more like a consumer in that regard today.  [00:15:58]Because there are more opportunities, because there are more relationships that can be formed, because discovery is so much higher due to digitization of B2B, we're actually moving into an unknown area in B2B, which is you don't know or have a relationship with the other person on the other side of the transaction. [00:16:17]

Bar: [00:16:17] This is so big. Remember, and this is doing a zoom-out for a second, if I may, B2B is the economy. It's not a nuance. It's not a segment of something. B2C, it's the end of a supply chain. This is why B2C, sits in a good place. B2C reflects this level of thing. It's the end. It's clear. It's a consumer and a business. B2B, it's everything that we... It's our economy. [00:16:50] The inefficiency that we just talked about is at the heart of the inefficiency of the economy. This is why B2B eCommerce is not a nice to have. It's really the future of the economy. [00:17:02] And if you can solve those bottlenecks, you can make that progress. So when you think about B2B commerce, you can divide it into two. You have the discovery. That was the trend for the last five years. That's great B2B eCommerce experiences. Shopify with like Shopify for B2B and Big Commerce and Magento and Salesforce moving to B2B as well. And all of them are doing those big efforts in making B2B something that is working, creating those front ends for the ERP. But there is still this gap because at the end all of this is based on trust. And if you don't have trust, you need a technology that will be able to facilitate that trust for you in scale. Because the biggest opportunity in online commerce is the ability to reach a much wider audience. So every merchant that is selling steel all of a sudden can sell to you. With the logistics technology that exists today, the potential is like nothing else. And it's happening right now. I talked about steel. There are three B2B marketplaces of steel on the Balance platform already working in scale. And this is just one example out of like, I don't know, 30-something industries we're working in. And it's crazy. There are all those very traditional industries you will never imagine doing eCommerce. Again, talking about chemicals. Lumber...

Brian: [00:18:43] Yeah, I think it's super interesting. There is sort of two sides to this right now, even. I think because we're seeing this move from industries like lumber and steel, as you just mentioned, and they're going through this digital transformation so that they can grow. What happens to the people or to the businesses that don't invest in this? I feel like there's a flip side here where it's like, well, if you just continue to do things the way you did them like the world is going to leave you behind. There's a defensive play here as well. If you're not out in front of this, you're behind it. You're the one that's getting gobbled up. What happens when someone does what those companies that are the steel companies that are on your platform when they go do this, who are they eating into?

Bar: [00:19:36] Oh. Wow.

Brian: [00:19:37] Yeah. That chemical company, that Chem Direct company, who are they taking business away from? So [00:19:45] if you have a relationship with trust you better be ready to also digitize or you're going to have the Chem Directs and the Steel Directs and the Lumber Directs of the world coming for you. {laughter} [00:20:00]

Phillip: [00:20:01] Let me ask a rhetorical question and, Bar, maybe you can give us some perspective because you're in this world more than we are. Is this really share of wallet in that they were going to buy this anyway from somewhere, so digital becomes this arbitrage opportunity or is there potentially unmet demand that's always sitting in the system that sits unfulfilled?

Bar: [00:20:29] Oh completely. 

Phillip: [00:20:29] And so the expectation is that we can grow purely by having more choice available in the system that never existed before.

Bar: [00:20:39] The answer is it already exists. In B2C the same happened. It just became bigger and bigger. And I think in B2B it's just B2C enhanced because the alternatives are so low. When I think about, first of all, thinking about the first question of what is happening right now when some of them are digitizing and others are just stuck behind. I'm going to say something very, a strong statement. I think that [00:21:17] in the next five years if you don't offer or first of all if you're not digitizing at some level, you will get hurt. But on the other side of it, you're not only competing with other sellers that are digitizing their business, but there's also this B2B marketplace wave, and they're taking this entire journey of digitization of B2B and putting it on steroids because all they do is focus in on experience, focusing on optimizations of cost. So in the end, you will have to choose digitizing your business or working with platforms that are digitizing your sales channel. But you have to do something, otherwise, it will happen faster than you would ever imagine. [00:22:06] We see it. We are in the first row right now of this show and this is so extreme. I'm telling you every day, this is the thing I love about my job the most. I'm a huge fan of this innovation, and I'm learning so much every day about the things you can digitize. When I started Balance, I didn't imagine you can do that. Everything is almost a commodity. When you're thinking about B2B, you're saying, "Oh, everything is so specific. You have measurements, you have very specific needs." But in reality, most of it can be, you know what it reminds me? Think about Tesla. When you are purchasing a Tesla online. Before it happened, everyone thought like "Cars? You have to buy cars in like the local shops of cars because this is how you buy cars. It's so specific. You need to see it. You need to feel it." But no, you don't. And it's amazing. And it's happening in B2B. You don't need to know your supplier of steel. You just need to know the number of types of steel and the amount you need. And there are hundreds of merchants that will be able to sell it to you.

Phillip: [00:23:37] The old world relied on leverage that came through relationship and the new world provides leverage opportunity for an open marketplace that can compete at a global scale for business. And that's huge.

Brian: [00:24:53] So we've been talking about this this old world and how it's going through digital transformation. And yes, it needs it. It's clear. You talked about how the average B2B purchaser was between 25 and 35 years old. I can only imagine as a 25 to 35 year old coming into B2B and being like, "What are these circly paper things that I have to tear off the sides of my invoice?" {laughter} What a crazy world to step out of the modern, consumer era and step into a job where you're like, "What in the world?" So, yes, it's clear this has to change. But also, I think there might be a flip side here. So [00:25:38] we've seen in the past five years, and I made a joke on the pre-show that both of you took seriously, so I'm going to explain it ahead of time, which is like, is anyone old enough to remember when like B2C wasn't sexy like B2C eCom was something that no one would ever think that you could ever market at the scale that Shopify and Wix and so on have? It's the consumerization of B2B tools which eCom platforms, they're business tools. That became a consumer product. We've talked about this a ton at Future Commerce. So now looking ahead and we've talked about where DTC is at: Is it dead? Is it not? Whatever. It's changing. It's changing. It's changing in that a lot of DTC companies, we've had this huge wave of brand building, and the tools for growing your direct business have become saturated. So a lot of these businesses are now looking to other channels to take the products they've created and get them to customers. [00:26:49]

Bar: [00:26:49]  [00:26:49]True. 

Brian: [00:26:50]  [00:26:49]And so B2B is a natural evolution. Let's sell to long-tail retailers, let's sell to distributors, and let's sell in different interesting ways that are pretty much exclusively B2B. [00:27:01]

Bar: [00:27:02] Yeah.

Brian: [00:27:02] So the opportunity right now to go sell into this market is sort of the flip side almost of what you've created. Those businesses are used to these incredible simple business, user-friendly modern design tools and they're stepping into this world of B2B and they're like, "What is this?"

Phillip: [00:27:30] You say business as if it's like an organism. It's actually people in the roles who are looking to take the ideals that they have from there.

Brian: [00:27:39] Exactly. 

Phillip: [00:27:39] They're much younger these days. They're much more digitally savvy and they want to reduce friction in their own lives. I assume that that's actually how it's happening.

Bar: [00:27:52] Completely. I think it's just a different generation that is used to something that is so different from the old world. And this is where innovation is in the most beautiful manifestation of it. Because it's so natural. It's just you don't disrupt anything. It's just happening from within. What you talked about, which is like seeing B2B as a new way to monetize your business is something that we see quite often in a lot of Shopify stores that are just saying, "Can I become a wholesale? Can I sell it in bulk to retailers, to other retailers?" And the answer is yes, and it's working. So it becomes bigger and bigger as a trend. And obviously, Shopify noticed it with a lot of B2B innovation that is happening in other platforms as well. So I think, when you think about the supply chain, we're seeing it first in the wholesale side, which is the of the world selling candles in bulk, clothing, and basic things. And other retailers are taking advantage of it. And yeah, it's just really a new way to compete. It's just a new innovation of how you monetize. And yeah, it's amazing.

Phillip: [00:29:28] It used to be that you'd have to go to a distributor who had these retail relationships. So the distributor was a marketplace. We often think of the point of retail as the marketplace where consumers meet brands, and really it's the distributor that's the marketplace that connects brands to retailers. And that marketplace has tremendous real-world logistical problems to solve. They have to do things at a scale that's kind of unfathomable. Today, I think that that's being broken up. And so the new world is that every brand is its own distributor to some degree in a small way. At most, they need the ability to fulfill 1-to-1 for consumers. And they also need the ability to fulfill many-to-1 with their retail partners. And so you see this direct relationship. So it's almost direct to consumer, but for businesses where they have a direct relationship with retailers that didn't ever really exist before because retailers didn't have the technology to allow that at scale. Just from a pure network effect perspective, they had to reduce their friction. They didn't want to talk to 100,000 suppliers. They wanted to talk to a handful of distributors. So [00:30:42] in reality, technology is the thing that's enabling this new world. It's the only way the new world could exist. And so payment has to come along with it. It's not just the relationship of how do we get products on the shelves, it's also how do we financialize that. And that's I think where Balance comes in is to actually make that work for businesses who don't want to have to grow up to be distributors in their own right. [00:31:06]

Brian: [00:31:06] You talked about distributors. There's also a lot of distribution that happens where you have rights to distribute, and you own a specific market. And it's interesting, trying to go acquire the rights to those markets is really hard. You either have to like acquire a business that already has rights or you have to really swing hard and go wait out those rights. And so as a business that already owns rights, you need to always have an edge as to why you should own that market. [00:31:37] Continuing to do digital disruption is actually a moat that you can build around owning that distribution. [00:31:44] And if you're a challenger and you're trying to go acquire that market, providing new technologies and more efficient ways to pay is a clear differentiator as you go up and try to take those spots. So yeah, just to add on, distribution is a market, it's often a controlled market and there's a lot of competition to own that market. And sorry, I did totally just blow up your question.

Bar: [00:32:10] No, no, I think it was a beautiful answer, and I think you said it right and I will even put some more emphasis on it. When you think about B2C, we're talking about 5% optimizations today. We look at it as obvious. It wasn't obvious 15 years ago and today it's so obvious that you get the best value and best price. Always as a consumer, it's this. And how much optimization can you create in the experience of a consumer when you have the Amazons of the world? Even if you're creating something amazing, it's marginal. Let's be honest for a second. In B2B you can transfer the way it's happening completely. It's step functions. We're there. We are in that stage of innovation. So just talking about it, gives me goosebumps, but I think one of the other things that's worth mentioning here, we didn't talk about it, but I think it's super interesting is the concept of marketplaces and leveraging your brand to create your own niche marketplace. So with this new wave of technology, the Miracles of the world is a very dear partner of ours. I guess, you know, Miracle. But in one sentence, for the ones that don't, when you go and buy an Office Depot, I mean you go in discovery and go and find products in the catalog, what you don't know is that, and Office Depot, I'm sorry if it's not correct. It's just an example. Half of the products you're seeing are a third party being connected to Office Depot, Office Depot, leveraging their brand to increase supply. The supplier's third party is looking to leverage the Office Depot brand to get more distribution. And buyers are happy because they're getting more supply. So this thing is happening in B2B at a huge scale right now. It's happening more and more and more and more. Miracle is such a dear and close partner of ours. We learn every day from them how successful they are in B2B and scaling that side. And agencies like Fadi and also very close partners of ours. Every mediocre brand and above that knows that his name says something in their industry is leveraging marketplace technology to increase supply. And that's amazing. It's just happening right now and it's a great way to just go do eCommerce, not just selling your products, but leveraging your brand to increase the supply. It's amazing.

Phillip: [00:35:09] So let's talk a little bit about the maybe inherent challenges or maybe some of the conversations that would prevent digitizing this part of the business. One thing that I think we talked about in the pre-show is we've seen the opportunity in the past, Brian and I both, over ten years in the consulting world of helping businesses digitize their B2B. And usually, it's a sales channel that's incredibly expensive to operate because it's typically full of a bunch of salespeople. They move a tremendous amount of business, but they all have relationships and they're really reluctant to change and really reluctant to change in a way that would reduce the amount of effort and their reliance on them as part of the sales channel in the business. So there's always been sort of a catch 22 of self-service could be the future, our customers want self-service to handle the bulk of what they want to get from us as a business. They don't want to have to talk to somebody. So making that move seems to be one that's a point of friction. The other one is when you put a bunch of software in between the company and the customer, at least in today's SaaS cloud-driven eCommerce world, that can be very margin erosive. And so it seems like a really expensive way to displace a handful of sellers who at the end of the day, service what, 25-50 accounts total? What's your perspective on that challenge that your potential buyer might throw out to you?

Bar: [00:36:52] Yeah, you just mentioned the right things. I think the first one talking about the friction point with sales, that's a big one in eCommerce. We can stop with just the bottom line of saying at the end, if you don't do what customers want, someone will do it and they will leave. That's the bottom line. Now, it's not easy to make a change, but who cares about what's easy? In the end, it's hard. Okay. It's hard. You need to modify your business. But it's not an optimization effort. It's the only way to save your business in the next wave of eCommerce. So this is how I'm starting with the bottom line first. I'm a business owner. I feel those things all the time. The need for a pivot. That they need to create innovation in the company. And the way companies are dealing with it, so this is the hardcore bottom line, the way companies are dealing with it is that if we're talking very tactical for a second, the thing is, when you have salespeople, the commission is based on every order they fulfill. If you're going self-serve, it doesn't go through their name, or their efforts, and as a result, they are getting less pay. So I think it's just a matter of building the right incentive plan on one side, but on the other, making it more efficient, minimizing the teams. It's part of moving online and it's part of technology as a whole. It has nothing to do with eCommerce. When technology comes into play in different areas of our lives, the workforce is getting... There are some adaptations to it. So create your commando teams, understand what is the right efficiency metrics that you need to look at, and think differently. And it's true, by the way, when you think about eCommerce, step one is salespeople. Step two is AR.

Brian: [00:39:01] Right.

Bar: [00:39:02] You can't continue to want to grow from one side but continue hiring AR people on the other side. It's hard. AR needs to change. We need to change the fundamentals of how we process payments in B2B. This is part of the mission of Balance, and this is something that every business owner needs to think about. Things will need to change. This is a fact. It's happening with you or without you. And it's quite exciting when you get used to it.

Brian: [00:39:34] Thinking back to what you just said about salespeople, something interesting, I think we talked about the sort of disassociation between relationship and B2B selling and how doing things at scale gives you the opportunity to cut out that level of trust. And you need to sort of farm that out, if you will, to technology in order to be able to go to scale. But for your largest customers, you're still going to want to have a relationship.

Bar: [00:40:07] Exactly.

Brian: [00:40:08] And I think for salespeople.

Phillip: [00:40:11] Did you just describe this as a growth channel then? Is that how you're...

Brian: [00:40:16] Potentially. That's exactly what I just did.

Bar: [00:40:17] Wow, look at us. Look at us learning as we go here.

Brian: [00:40:21] And so I think one of the things that salespeople don't necessarily like is actually having to deal with a lot of long-tail customers because oftentimes it takes up a lot of their time and maybe a small deal takes as much time as a large deal, but they're assigned to that account. So they have to service that account. And so actually this could be looked at as an enabler for sales teams. If, again, if you structure your sales incentives properly.

Bar: [00:40:52] Exactly.

Brian: [00:40:53] And so I actually think that a salesperson applied to a relationship that's larger could result in more sales for that salesperson as opposed to having to deal with long-tail. And yeah, maybe you do have SMB teams or things like that that you're trying...

Bar: [00:41:10] Exactly.

Brian: [00:41:11] Again, there's going to be a certain level of restructuring that's necessary. But I think if you said it's hard, it might be easier than you think it is if you just go talk to your people.

Bar: [00:41:23] You couldn't be more right. Salespeople will need, and again, when I hear you talk about it, I'm just thinking about every area of technology. salespeople will need to go upmarket and be more with the big customers for the long-tail. We need to automate it. This is what technology does for the world. Automating the long-tail of tasks. This is what is happening, and it's true for AR teams as well. AR will not go away, but it will become smarter. AR will also be in something that Balance will enable, not erase. That's one side. The second side that we talked about is technology taking bites of margins. This is a very interesting point and it's something that we hear a lot. This is why at Balance, for example, we created calculators to show that technology like Balance, for example, the margins on using that technology are higher than the alternative, which is manual work. And it's not that trivial at the beginning because when you think about your manual work, SMB teams, big AR teams, or just operational things, you take it as something that is something you need to do. It's part of your cost structure. And when new technology is being introduced, it's like a new cost. It wasn't in your budget before. So in order to gap that type of perception, we're showing that really to process a long-tail SMB transaction it's not only more expensive than using Balance, for example, it's margin negative.

Phillip: [00:43:29] {laughter} Explain that.

Bar: [00:43:30] It's literally the cost, the revenue you're getting from transactions of long-tail. And by the way, big, big brands know it already. This is why they don't serve SMBs. This is part of why Balance is going to market. But the revenue you're getting from a transaction minus the cost of collection defaults for the ones that don't pay at the end because everything is on terms. Remember, everything is with that. Managing payment ops, with checks, wires, and so on and so forth. With the AR liability, it's just higher than the revenue on the other side of the equation. So if you don't automate it, you just can't do that type of business. Some of our customers are the biggest brands in the world. The reason why they're using Balance is to serve this long-tail they just can't reach right now. And when you're a brand and you want to go direct to retailers, you don't have any other choice. You just don't. It's just not scalable. It's like, think that in B2C, you will need to have a team to process every credit card transaction.

Phillip: [00:44:45] Yeah, that's a scale that's unfathomable.

Brian: [00:44:48] Every single time someone swipes a credit card, you have to go reenter it. {laughter}

Bar: [00:44:53] Yeah.

Phillip: [00:44:54] As we sort of wrap up this mini-season of Step by Step and understanding that people will listen to this long into the future, that's always how this goes. People will hear this a year or two years from the time of recording, but we're about to go into a holiday season, so we're sort of straddling the holiday season. A lot of folks who are working on budgets and priorities for next year... What is the opportunity that you see going into the next fiscal for a lot of companies who are making these plans that allow them to build for the future? What are the things you're seeing right now, Bar?

Bar: [00:45:33] So I would divide it into two. One, if you're scared about eCommerce projects as a whole, start by learning. Do yourself a favor. Call to the best agency on the platforms you're working in. Even if you're not working on a platform, talk to an agency you heard good things about. Start learning about the value of digitizing your business. You have to. If you're scared about digitizing your business, at least go to the nearest B2B marketplace in your field. Start working with marketplaces. Learn the efficiency and the value that they bring and start thinking in growth mode. Move away from "keep your business alive" to growing because in 2023, if you are not growing, you're not staying alive. You're going under.

Brian: [00:46:25] Hmm.

Phillip: [00:46:28] All right. That's a great way to end this mini-season here of Step by Step. This is probably been one of the hardest-hitting, most impactful series of conversations that we've had.

Brian: [00:46:41] I agree. 

Phillip: [00:46:42] And I think that especially as the tide has turned and people have shifted their thinking of what it even means to be an online brand and what distribution means, this year has changed the way that we think about eCommerce fundamentally. And I can't think of a better way to wrap up our Step by Steps for 2022 than to have had you on. Thank you so much, Bar, for coming and joining us. 

Brian: [00:47:06] Thank you, Bar.

Bar: [00:47:07] It was so much fun. Hope to see you again.

Brian: [00:47:09] Oh, yeah.

Phillip: [00:47:10] We'll see you very soon, hopefully in New York, somewhere nearby.

Bar: [00:47:15] Oh yes. Sounds good.

Phillip: [00:47:16] And thank you all for listening to this season of Step by Step. Thank you for listening to Future Commerce. You can find more episodes of this podcast and all of Future Commerce properties, including Insiders and The Senses, which are our newsletters. And this right here, Step by Step, which takes you from zero to hero. You can get all of that and more at, and subscribe so you never miss another episode of Future Commerce or Step by Step. Thank you for listening. Thank you so much for listening to this season of Step by Step. You can find more episodes of this podcast and all Future Commerce properties at You can sign up too to get invited to any of our events that we have coming up. We have so many amazing events, everything from happy hours and get-togethers around conferences, to our salons. You can get on the list and you'll get our newsletter that comes out twice a week. The Senses. That's everything that you need to know about how brands and people intersect and how commerce happens. That's called The Senses, and it comes out twice a week. You can get that and more, including your invitation to all of our events at FutureCommerce.m/Subscribe. Thank you so much for listening. Remember, the future of commerce is what you make of it. Commerce will shape the future and we can shape commerce.

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