How Outdoor Gear Retailer Cotopaxi Digitized its Back-End Payments to Keep Up With Growing List of Vendors
Like most retailers, the 2020 pandemic nudged us at Cotopaxi to reassess every system and process we had in place. Our business has been growing steadily, and with the downturn of the economy looming, we wanted to take control of the areas we could streamline and improve.
Payments were at the top of our list of processes we sought to revamp. We know we had inefficiencies in the way we were handling our payments, and set out to find a way to digitize more deeply. We also knew there had to be a way to save money on the costly transaction fees we had at the time.
Credit card payments have always been a large percentage of our business, as they allow for nearly instant transactions, which enables us to move inventory at the speed that’s necessary for the nature of our retail business. However, with fees mounting as our business grows, we needed to find a more expansive solution to offer our vendors that gave them a diverse array of payment options. This would help in two ways: first, it would help to minimize our overall costs by blending more expensive payments methods with less expensive or zero-fee options; and second, it would improve the payment experience.
We were also in need of more sophisticated accounting processes, and searched for ways to avoid keeping our accounting team bogged down with trivial tasks like processing paper checks, manually reconciling payments and invoices, and following up on collections.
After evaluating several solutions, we decided on Paystand, a B-to-B payments platform with modern infrastructure built on blockchain to enable faster, cheaper and more secure business transactions.
The two key components that attracted us to this service were the automation of repetitive tasks and real-time data and flexibility. To put it simply, we were spending far too much time manually running various aspects of our payments processing. With Paystand, we were able to get rid of mundane, time-consuming tasks, like reconciling all of the payments we received and deposits made to the bank account. Paystand was able to automate this for us. In addition, our team at Cotopaxi was able to gather real-time business data that would inform critical decisions made on a daily basis.
The automation component enabled our payments to show up in real time. Prior to partnering with Paystand, there would be a time gap between when a payment was made and when we were able to confirm it as successful.
Cotopaxi uses NetSuite as its ERP, and having an automated payment solution that works well with that system was critical. Paystand allowed for specific customization to help meet our business needs. Integrating these two platforms created a very powerful and valuable tool for us so we could realize the promises of automation. Now, we're able to see data around each individual payment down to the very second that it was made, which removed various delays and roadblocks we ran into prior to this digitization.
The Paystand platform also allows for customers to see their remaining open balance in real time. Now, when a customer receives our email invoices with embedded payment links, with just one click they can see their open balance in the digital payment portal. Paystand communicates seamlessly with NetSuite to display their open balance.
As a result of moving to Paystand, we were able to improve both our margins and our efficiency. Prior to Paystand, we were transacting about 20 percent to 25 percent of our digital payments via noncard methods. Now, that number has jumped to 38 percent, and it continues to grow, which cuts down on the transaction fees we pay. We also spent significantly less time on manual tasks like payment processing, reconciliation, and collections. The service helped us automate a handful of processes and our team is now able to focus on more important tasks. We’re pleased to be able to offer this alternative solution to our vendors, while still reaping the benefits of automation and real-time data reporting.
Gary Bowen is the chief financial officer at Cotopaxi, a company that creates innovative outdoor products and experiences that fund sustainable poverty relief, move people to do good, and inspire adventure.
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