The Cactus Water Co., which does much of its sales of the desert plant-inspired ¡CACTUS! beverage brand via Amazon.com, is turning to a cloud-based EDI and QuickBooks connection to build retail chain sales.
Launched in 2017, Cactus received an invitation last year to sell its beverages to the retail chain H-E-B Grocery Co., LP, a San Antonio, Texas-based chain with more than 400 stores in the United States and Mexico and more than $30 billion in sales.
But it faced a major challenge: H-E-B wanted Cactus to sell its beverages to it via electronic data interchange—a process for which it was far from being prepared. “H-E-B was my first chain customer, and I had no idea what EDI was,” Cactus Water founder and CEO Sarita Lopez says. “I just knew I needed to get the technology installed.”
Electronic data interchange still plays a sizeable role when it comes digital B2B sales because it is a proven technology for suppliers and buyers to transact. Indeed, in 2019, EDI accounted for $7 trillion or 78%, of all electronic B2B purchases, according to Digital Commerce 360 B2B.
An entry into big retailers
Nevertheless, many start-up suppliers lack EDI connections, instead preferring to do business digitally through an ecommerce platform. That can create problems when a large, new client insists the supplier connect to them using EDI technology. As is often the case in these instances, the supplier is left with two choices: either implement an EDI connection, and quickly, or lose the account.
Cactus Water, which specializes in flavored waters enhanced by the power of cactus leaf juice, saw the move to EDI as a big departure from selling through Amazon.com, which accounts for about 20% of its sales. Nevertheless, once Cactus decided to forge ahead with an EDI implementation, the company saw an opportunity to use EDI integrated with its online accounting system to improve internal operating efficiency and financial accounting accuracy. It integrated its EDI transactions with its QuickBooks accounting software from Intuit Inc.
After vetting a list of potential EDI vendors provided by H-E-B, Cactus Water selected TrueCommerce Inc.
Once Cactus implemented TrueCommerce EDI, Lopez learned how to receive purchase orders, acknowledge their receipt, and mark them as shipped. Within a month, Cactus began processing purchase orders from H-E-B.
Purchase orders without errors
The integration of QuickBooks to TrueCommerce EDI also began paying immediate dividends, Lopez says. Purchase order data flows into QuickBooks, which improves accounting accuracy “When it comes to accounting, there is always a risk of human error,” she says. “With the QuickBooks integration I can review all my purchase orders (in QuickBooks) and quickly see if all the right data has been captured. It keeps my accounting accountable.”
The ability to share data electronically with clients and internally, as well as view that information through QuickBooks, has streamlined operations by eliminating the back-and-forth emails to confirm purchases and fulfillment data. “We can electronically share purchase orders with our customer service department, see invoices sent to customers, print shipping labels and see freight information on a single platform,” says Lopez. “For a business owner like me who wears a lot of hats, that’s a huge plus.”
In addition to operating and accounting efficiencies gained, Lopez found that Cactus could better manage supply shortages through TrueCommerce EDI.
“There’s a worldwide aluminum shortage right now,” Lopez says. “At one point, I had to put off fulfilling a purchase order because I couldn’t get cans fast enough. With TrueCommerce, I didn’t need to do any messy paperwork; I just needed to let my customer know, and the system handled the documents when we were able to fulfill the purchase order.”
More retail chains, more e-marketplaces
Since implementing its EDI platform, Cactus has entered into talks with two other major grocery chains about carrying its products, Lopez says.
While Cactus has been able to grow its business through its EDI platform, the company continues to increase its sales on Amazon.com. Last May, Lopez noticed that consumers were looking for products with Vitamin C, a trend driven in part by the coronavirus pandemic. “Our products have 100% Vitamin C and we saw a real surge in sales” through Amazon, says Lopez. “Since then, we have been working to grow sales on Amazon.”
Although Cactus uses TrueCommerce EDI, it does not use TrueCommerce’s ecommerce platform.
As part of its renewed focus on selling through Amazon.com, Cactus is in the process of becoming a verified brand on Amazon and looking at other ways it can increase its sales through marketplace, Lopez says without being more specific. “We are also open to selling other online marketplaces,” she adds.
Peter Lucas is a Highland Park, Illinois-based freelance journalist covering business and technology.
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