Q1 Luminous Product Update

Transcript

Jared Ward: 0:00

What's going on, guys? Q1 is coming to a close and I'm here with our head of product, Billy, and we're going to discuss all the cool updates that came out in Q1 this year. So, first off, we had a massive sprint, Like we basically created like a short list of users that we really focused on their experience. What are some of the biggest updates that came from that this quarter?

Billy Bush: 0:18

Some of the biggest ones I mean just even given the quick bullet list here is overhaul on cost layers and how you can view and manage a cost layer, and we can even talk about what a cost layer is for those who aren't aware. Another big one was being able to reconcile inbound shipments, and inbound shipments particularly are relevant for anyone dealing with Amazon, and so there's a lot of things happening there. And then another one here is dealing with the fulfillment orders being able to split an order into multiple fulfillments and have multiple shipments on those, and really being able to break down an order and your ability to fulfill on it in many ways. So those are kind of the big ones I'd say that we've got.

Jared Ward: 0:59

So the first off, cost layer. Cost layers, just to explain that real fast. Cost layers comes from this concept from an operative perspective of landed cost, and it's like baking variable costs like shipping or duties or random stuff into the cost of goods. Luminous just calls it cost layers, where each time you have like a shipment or a PO or basically anytime something's received and you add something to it, it splits off like a layer.

Billy Bush: 1:29

Yeah, each bundle is going to get you know, adding those costs right into the cost of goods. So when it sells it actually takes on that. You know that freight that may have been required to get it to the particular warehouse that fulfills or what have you Some systems and people call them like cogs, layers as well, because it's your, it's really the, the foundation for your cost of goods that's going to come out of it.

Jared Ward: 1:51

um, and it's like that's some of the e-commerce operators you'll purchase, you have the unit cost of a moment. So that's just the cost. That's on the po, but oftentimes sometimes again double or triple depending on the type of product that you're buying, once you add in duties and freight and other things.

Billy Bush: 2:06

Especially in this climate where you're talking about a 25 plus percent duty in a lot of cases, right Tariffs and things like that. I mean the cost is significant and instead of eating that on your profit and loss as some one time cost, you know you want to spread it across the goods that you're actually getting and being able to see a better, a clearer picture of of what your profitability is on those goods, as opposed to keeping them separated right, like those tariffs and costs. Being separated are going to mess up, you know, your profitability numbers.

Jared Ward: 2:34

So how easy is it in Luminous to number one, view your cost layers and then also even like, edit your cost layers.

Billy Bush: 2:41

Yeah, so yeah, a cost layer is created every time, as we mentioned, every time goods are received at a warehouse, and so you can get a lot of them, because you might be transferring and it's per, you know, per SKU, but you might be doing a bunch of transfers, a bunch of purchases. Things like this are always happening. So you can end up with a lot of these layers and, as you sell, those layers are essentially depleted, you know, to your cost of goods. And now, because of all this, since there are so many layers, it can be a bit confusing to understand well, how did I arrive at this cost? And so we have added a couple of key features to give some transparency to that.

Billy Bush: 3:18

So now you can actually click on a cost layer and see all the transactions, both that created the layer as well as that kind of depleted the layer, both that created the layer as well as that kind of depleted the layer, so all of the adjustments and, of course, the sales.

Billy Bush: 3:27

You know every time a sale occurs, it's going to register there. So you can actually click and see every sale that was impacted by that cost layer and then dive into the sale and dig in more and so really trying to open up the transparency of what these layers are so that you know how they got there, you can trust you know the information that you're dealing with, the numbers that are there. And then if something is off because obviously no one's perfect, there's a lot of you know things happen and mistakes are made and someone types a number wrong. You know. Now we're trying to also make it a little easier to fix those things. So if you know that the cost is a little off, being able to edit that cost, you know at the right permission level and make an adjustment so that it feeds into your cost of goods correctly, right? So that's a big part of it as well.

Jared Ward: 4:11

Now, something that I would add, because there's a whole lot of technical jargon in there. Practically speaking, who are these new cost layers for? Well, I would say, luminous Service is a very special or a very specific type of brand that is multi-warehouse and they want to keep track of accurate landed costs at different warehouses. So, like, practically speaking, most of our customers, they will purchase raw materials, they'll send them to like a co-manufacturer or really in a warehouse in Luminous, they'll assemble them, they'll bake in some costs there, then they'll maybe transfer it to Amazon or transfer it to the 3PL. Luminous can keep track of all those cost layers, and all the stuff that you're mentioning and the stuff that's still on the roadmap is making that experience even better, even easier to upkeep, I would say. But that's sort of like just think about that. I have FBA, I have a co-manufacturer, I have a warehouse, and how do I keep track of my landed cost across all of those little, all of those warehouses? It's challenging.

Billy Bush: 5:11

Yep, and when you do have those multiple warehouses, it's going to be often slightly different at each one. I mean that's the thing. And so and if you, if you ignore that in some cases I mean you might be you might have products that you're completely like unprofitable on. You know they're just straight up losses that are hiding in a warehouse that happens to be a little more expensive than the others, and that's where it becomes a really big deal. I mean, if you're a really simple operation it's got my one warehouse, it's in house and I sell out of it and everything else I mean it can be relatively simple to kind of track of what those landed costs are. But the instant you start moving things around and you know coming in with multiple shipments across different things and yeah, it gets complicated real quick. So that's definitely the intention. It makes that a lot easier.

Jared Ward: 5:51

That's the difference between, like I've seen Settles IMS, for example, like if it's just a basic Shopify brand that buys finished goods and you want to bake in, you know you want to bake in, you know you want to bake in shipping costs and it's just going to one warehouse like yeah, usually like settles ims or use a really basic one, or really building towards that more complicated, like baking up landed costs into multiple warehouses, and like you actually want to do that, yep absolutely.

Billy Bush: 6:19

Yeah, it goes a big deal and it's I mean, this is just the foundation of it in a lot of ways, right like now, we have the transparency, the ability to edit. It's. I mean, this is just the foundation of it in a lot of ways, right Like now, we have the transparency, the ability to edit. It's going to get smarter, it's going to get easier, you know, more automatic, but a big piece is being able to reveal what's behind it. So when that automatic thing happens, you're not just like can I trust this or not? That's obviously a big challenge with all the really smart stuff that occurs. It's like okay, do I really believe that this is what actually happened here? Yeah, exactly, that's how I'm giving that insight in advance.

Billy Bush: 6:47

So next I'm talking about inbound shipments and transfers and how inbound shipments work.

Billy Bush: 6:54

This really applies most heavily probably to any Amazon sellers, companies that are selling on Amazon, because you generally create an inbound shipment on Amazon and then you need to actually ship it to them. So you end up doing this advanced shipping notice. Some other warehouses will do it as well through that advanced shipping notice concept, but an inbound is really on the receiving end, like they are saying this is what we were expecting, and so that's something that we've had in the system to be able to show any warehouses that have an inbound shipment that they're anticipating or expecting and now you need to go and ship that product to them, and so you can reconcile these inbound shipping notices to transfers or POs or inbound shipments or shipments that you already have on their way, whether it be from a vendor or from a transfer. Be able to reconcile that so that when it does show up and the warehouse is saying yes, we did receive the goods, it automatically generates that cross layer again getting back to that and automatically does that.

Jared Ward: 7:57

And this also goes back to that same point about who's Luminous for Well, a lot of this update was around I have multiple warehouses, there's multiple paths of replenishment, so I can purchase some goods from my Chinese manufacturer and send them direct, create an inbound shipment that's going straight to Amazon. Or I can purchase some goods from my Taiwan manufacturer and send them straight to my 3PL. Before we didn't really have a concept, we didn't break down incoming by like, by warehouse, yep, like in. We would just have this general incoming number. Like you have a thousand incoming and it's like well, I have FBA, I have my 3PL and I have my East Coast 3PL. That's like, well, where is it actually going in? Incoming to?

Jared Ward: 8:40

So that was another piece. Practically it was like okay, now you have the ability to create all those different. I could purchase a bunch of finished goods split off. Half of them go to FBA, split off, half of them go into my 3KL and we can correctly show you that, like, you have half incoming here, half incoming here, and we can reconcile the inbound shipment in the external system, fba, with the one in your internal system. I don't know if that made sense. It makes sense to me at least.

Billy Bush: 9:10

We just get so deep into Chark. Yeah, that is the challenge for sure. I mean, that's what's interesting. Even when we first introduced incoming to a location, it was just whatever location was on the PO. So you have put a location on the PO, I'm going to ship it as warehouse. But frequently, especially if you do larger POs, you might be splitting that five ways. It's going to go to multiple warehouses, inbound, and that's the big thing here is that we want to show that accurately and then make it easy so when it does show up it's like kind of automatically reconciled If that's being shown or tracked through this inbound shipment. You know, like through Amazon or through your 3PL. If they're marking things as received now, you don't have to in Luminous, go mark it as received. If they're marking things as received now, you don't have to. In Luminisco, market as received, it's going to automatically market as such, as they do in the warehouse.

Jared Ward: 10:00

And that's you know. That shrinks the steps there, simplifies that whole process. The last thing I would say is it's rare to have a system out of the box where you can have the concept of a shipment from the brand's perspective and then from the 3PL or Amazon's perspective and then reconcile those together Absolutely. We're actually one of the only systems out of the box that is built to do that, which is like such a common thing for modern brands. They buy stuff, they send it to either a 3PL or FBA and a lot of times it never gets reconciled. The reconciliation happens on a Google Sheet. Yep, yep.

Billy Bush: 10:30

Now it's a huge deal. I mean, that's something I haven't seen, yeah, without some sort of major customization or you know some sort of app built in or whatever it is that they're doing being able to see those advanced shipping notices, those, and you know, yeah, make that happen. So that's a big deal, and that'll continue, as everything else will continue to get even better as as we start to automate some of those steps as well.

Jared Ward: 10:51

Last question so if I create an inbound shipment in Amazon, it will auto-draft a Actually explain to me, say I'm a brand, I create an inbound shipment in Amazon and let's say, my 3PL is the one who picks, packs, zoops it and sends it to FBA. What happens in Luminous?

Billy Bush: 11:11

Yeah, that's a great question, and this is anybody that deals with Amazon is familiar with that process of creating an inbound in order to get their goods to Amazon, and then Amazon has a bunch of labels and other stuff. They've created these shipments. So now, in Luminous, when you can, when you match that inbound so it'll come in. We're going to see that in Luminous and you can now match that or create a transfer for it from your, from your 3PL, and that will actually create a transfer sales order. Essentially, it's a transfer that will be pushed to your 3PL so that they can actually fulfill on it without you having to go redo all the work you did in Amazon. What?

Jared Ward: 11:49

normally happens for brands who have a 3PL that sends their stuff to Amazon. What normally happens? Is it just all manual, normally, yeah?

Billy Bush: 11:57

yeah, you basically have to go recreate the inbound shipment you just did in Amazon.

Billy Bush: 12:01

You got to go recreate it in your 3PL. You know you have to do all the same work to create this order with all the items, because now you actually have to ship it out of there to match what they're expecting the inbound to be. There are still steps that you know you still have to create an Amazon, but now we're going to push all those details as much as we can less at the moment some of the labeling cause just due to how communication with Amazon works. So there is still a step of just needing to forward the labels and stuff over to your 3PL, but otherwise creating a, you know, a shipment or a sales order, essentially for the 3PL, for the warehouse to fulfill on pick, and it'll have a name too that matches. I mean, that's the nice thing. It'll have a number that matches the, the inbound, you know. So you can actually uh reconcile those pieces. They can pick and pack it. You don't have to recreate it there, you just send them the labels to uh to make sure they get slapped on and shipped out.

Jared Ward: 12:48

Man the one of the themes that keeps popping up is luminous, like of our superpowers truly is. We're building towards multi-warehouse flows, and there's so many systems that work built with that in mind. As we move on to the next one, fulfillment orders, even more so like this concept of multi-warehouse. So explain why did we add the concept of a fulfillment order? Didn't it used to be called shipment in Luminous?

Billy Bush: 13:12

Yeah, those yeah, we call them well and they kind of half existed behind the scenes.

Billy Bush: 13:18

Let's say that, that.

Billy Bush: 13:19

But every sales order, um, you know, typically and even in other systems we can start even there it's like you have a sales order that you then push to like your warehouse for them to fulfill on it, um, but there are a lot of scenarios I mean especially multi-warehouse scenarios, b2bb kind of like wholesale sales, things like this where maybe the order is really big and you're only, you know, partially able to fulfill on it, but they're big enough that you're not like in a cancel it because of that and they, you know there's communication there and stuff, so there's different needs to fulfill on these in a more call it a creative way.

Billy Bush: 13:49

I'm just on what, what is required. So now you know a sales order, I mean that is the, that is what comes from the sales channel. You know you have a sales order and, as opposed to like just passing that along, we create a fulfillment order to match. So in your simplest sense, it's going to reflect almost exactly what your sales order was. You know, if some customer buys one item, you're going to create a fulfillment order or the system will create a fulfillment order with one item and then push that along to the warehouse to actually be fulfilled.

Jared Ward: 14:17

And I feel like where this? Oh sorry, you finished, I'll get this under wrap, yeah.

Billy Bush: 14:21

I mean, that's the essence of it From there. The reason we did it, of course, was to then allow for to split those things up, instead of having to split up a sales order that now no longer matches the original sales order like the sales order actually stays the same and other systems. That's generally what they end up doing is they're taking a sales order, splitting into pieces, but now you don't have a complete record. It's like you just topped up the sale. Um, we're actually looking at that like no, that sale is still whole, it's still the same, it's the same thing, but we're going to add maybe it's five different fulfillment orders and then the invoicing against.

Jared Ward: 14:51

that should be Invoice against the different shipments or, excuse me, fulfillment orders or like the total Correct.

Billy Bush: 14:57

Yes, so that's the other piece is. Then we can invoice against the fulfillments. So if you're only able to ship out a third of the product and the other two thirds might take two months and you want to invoice them, yeah, that's very cool. We can actually invoice on the one third. Well, I know because we were doing that.

Jared Ward: 15:13

We were doing some weird, weird shit behind the scenes where, like that's how we would handle the drop ship EDI flows is like I can't remember how we had set it up, but we were essentially doing that, but there was no UI for it. Yeah, so like now you actually have an option to do that.

Billy Bush: 15:29

Yeah, it was, and we did have an option to be able to invoice on a shipment. Okay, but what's interesting with this is if it was a big order, you might ship it with 10 boxes, I mean like on the same day. So it's like, and so the challenge was, if we invoice per shipment, you would get 10 invoices. So I mean we ship them all the same day. There's 10 boxes. Yeah, it'd come back as 10 shipments and, uh, and we would, you'd get 10 invoices, one invoice per shipment. So obviously you don't need 10 invoices for the same day.

Billy Bush: 15:57

Yeah, so now we have a fulfillment order.

Billy Bush: 16:00

It still might take 10 boxes, but we can do one invoice on the entire fulfillment order as opposed to, which is still only part of the bigger sales order, right, as opposed to every individual shipment underneath, which is how it kind of had worked for a time there.

Billy Bush: 16:20

So now it allows you that flexibility of like, if I want to invoice in little chunks or bigger chunks or different ways, that you can. Actually, if you're going to do that invoicing and then also just pushing those updates, now we can push. It's going to say, like, when the fulfillment order actually goes and this is the other layer there's still shipments, so one fulfillment order might have 10 shipments on it. So it's still another layer of splitting, if you will, essentially, but it's being able to have all those individual shipments will show in that fulfillment order. But we can now more easily kind of push that fulfillment order around or break it down further. You know if it needs to go to a different warehouse, if it needs to be held, if it needs lots of different things that way, but still have that flexibility to ship it in multiple pieces and then it opens up the automation capabilities which are, practically speaking.

Jared Ward: 17:04

Here's how some of our customers are going to be using it. Let's say you have two separate warehouses for fulfillment for one of our customers. They ship bulbs and flowers out of two separate warehouses. Now those orders come in together, like you sell them on the same website so and a lot of times they push them to buy them together. But, practically speaking, fulfillment and this the main use case, if I could summarize it, it's like you can.

Jared Ward: 17:30

This concept even exists for, like let's say, you have like two separate picking lines or like you have a temperature control, temperature controlled part of the warehouse versus that it just it's like it's totally separate. Yeah, so we can do the conditional logic to auto split and order and push it to different systems. Yeah, like that could be, we could. So, for example, somebody could order this and this which are fulfilled out two separate warehouses. It could be two separate 3pls. It could be like one is a drop shipper and then one is your own warehouse. Either way, we can set in logic to split, send to we call it a destination OMS, but like we can send this to ship station and then we can send this to the WMS of your 3PL for them to fill it, so that automation is so key for these multi-warehouse fulfillment.

Billy Bush: 18:23

Yep. Well, you even hinted at the picklist side too. So it's like I mean, not only is it invoicing and things like that, but now, yes, let's create two split picklists, but I want all of the items for the second warehouse on the picklist, because obviously they're not even here. I want only this chunk of items so that fulfillment order. I can create a pick list off of that to be able to fulfill it and not just have this list for the entire order. So I mean, there's definitely some big capabilities in that.

Billy Bush: 18:55

That's the initial automated portion is let's automatically split according to where the goods actually are. Where is our product? You know these separate spots or warehouses or locations, and then they can look at it like a single order. They actually don't even need to worry about the other fulfillment order. They don't need to think like oh, I only need to do part of this, like no, they have an order in front of them. It's just their fulfillment order. It's not the other one, it's not the other half, it's not the whole sales order, and is it easy to check the status, as somebody who's going in say, they're just like.

Jared Ward: 19:20

I just want to see the sales order. What's the fulfillment status of this item on fulfillment orders?

Billy Bush: 19:24

And then here's the quantity that's been shipped and here's the quantity that's been paid, I mean. So essentially you have these multiple so you can always see this is what was ordered. But then I can actually very quickly tell, hey, these three haven't been sent on fulfillments yet, or, you know, maybe they all have and we've only shipped half of them. I can actually see that very quickly and so you end up getting all that information kind of summarized so you can look at any individual fulfillment and see its status, like what are the items on it? Have they been shipped yet? What's happening there? I can then look at the sales order and see overall you know it's going to have a general status of like partially fulfilled, partially shipped, that sort of thing, but the detail is all going to be there of what has been put on fulfillments, what has been shipped out already, everything else, and it's going to just roll up right there in your line items, your sales order.

Jared Ward: 20:19

The more we talk about this, the more jazzed I am, because at the beginning of this sprint, what we communicated was like okay, there's this segment that we're really focusing on, it's really these modern multi-warehouse operators and everything we've pushed is for that operator Like it's either shipments at the top of the supply chain or shipments or fulfillment orders at the bottom of the supply chain, and that's, I mean, that's the direction we're going, like we're making those things easier for a multi-warehouse operator to make those decisions and make the changes in the other systems when necessary. Yep, it's really cool to see, absolutely.

Billy Bush: 21:02

Yeah, it's exciting stuff. I mean it's a and this is just a. I feel like a lot of this work is that foundational work that's just going to get more and more interesting as we layer on the smart tech on top of it all, so it's gonna get more fun.

Jared Ward: 21:09

Okay, last part, q2.

Billy Bush: 21:12

Now we're transitioning to what's not done, so yeah, I mean, a big push is definitely going to be the starting to automate a lot of these steps and layers. And some of that, you know, in a basic sense and like the most typical sense, will exist, you know, right away, but there's definitely a lot of pieces there where we want to get a lot smarter about that, so that it's it kind of happens automatically. Then, you know, having a rule system, you know that we have a basic one now being able to expand on that's going to be a big piece of it. And, uh, I mean we've got several areas that are kind of like, uh, that we're going to start to pursue more heavily. And, uh, I mean some of it's going to be, you know, we're playing it. I mean, especially with our sprint, like our, our goal here is to really um, work with these key customers and and really start to fulfill that, and so some things are staying very nimble.

Billy Bush: 21:56

I'll say that even as well. So, meaning like it can change. You know, as we kind of like every step we take, we kind of reanalyze what's going to be the most value, but there are that's a big portion of it, I think is going to be automating some of those things getting smarter about it so that it just becomes that much easier for the operator to actually function in these areas. But we will have a big thing with even some of the purchasing, how that gets spread out, you know, across multiple shipments and multiple POs and I mean there's some really cool things that'll happen with your purchasing flows. That is right around the corner as well for Q2. And I mean there's just too much to really get crazy about but to talk about really specifically. But I'm excited to see where we go with it Cool.

Jared Ward: 22:42

Well, that's basically it. We'll see you guys next month for some of the newer updates. Peace.