On Custom Platform
Signifyd’s business model aligns with StockWise Auto. Both companies thrive off a very low profit margin. That’s why the pricing, the model, and the whole concept behind Signifyd has been a perfect fit for StockWise Auto.
Reduction in Cases Reviewed
Increase in Accepted Orders
Big Opportunity, Small Margins
Chris Kouris was working behind the scenes at a brick-and-mortar auto parts store in the greater New York metropolitan area, taking care of IT issues, when his boss saw something special in him. “One day he said, ‘I don’t want you fixing keyboards and mice all day long. You have to learn this business, because I think you’ve got a head for it,’” recalls Kouris.
Turns out his boss was right. As Kouris learned more about the back and front office operations in the auto parts business, he became convinced about a growing opportunity for the automotive aftermarket—a need that even retail giant Amazon was not meeting.
Kouris realized people were always looking for bargains when it came to buying auto parts and supplies. But professional mechanics and do-it-yourself consumers were having difficulties identifying the correct parts they needed for specific jobs on specifics models.
So why not build an online business that sells genuine auto parts cheaper than anyone else, with technology in place to help customers identify the exact parts they needed? Then have those parts drop shipped directly from manufacturers? Pairing this idea with a heavy emphasis on customer service, Kouris found himself ready to launch his own business.
After finding a like-minded partner and leveraging their collective relationships with automotive aftermarket manufacturers, Kouris began laying out the blueprint for what would become StockWise Auto. A few hundred cups of Starbucks coffee later, Kouris decided the site would offer a live inventory with access to millions of genuine parts at affordable prices.
There was, of course, the challenge of building the technology. But Kouris got his first computer, a Commodore 64, when he was eight years old, so the self-taught programmer knew technology would be a leading driver for his business.
By designing and managing a complex in-house ecosystem of process-driven operations, Kouris automated everything. From shipping manufacturers’ products to customers, to interfacing with vendors’ inventories in real time, to monitoring customer service. And he did it all by creating unique software algorithms that continue to give StockWise Auto an edge across multiple ecommerce channels.
“I was inspired by a programmer who’d been around for a long time in the ecommerce auto parts industry,” said Kouris. “He told me, ‘Stop with the spreadsheets. Just stop. Learn how to work with databases. Learn PHP.’ He planted a seed in the back of my head that grew and grew.”
With Growth Comes Fraud
As the business grew, Kouris noticed his chargebacks were growing as well. When he first started, he was completely unaware of fraud rings and the “black” sites that would recommend fraudsters to go to online merchants known for system vulnerabilities. But by 2015, all that had changed. “Back in the day, if your billing and shipping addresses aligned, you were probably fine,” said Kouris. “But then suddenly, online retail turned into a whole different animal.”
StockWise Auto first tried to deal with the issue internally using Google Maps to verify street addresses and social media platforms to research suspicious customer identities. Kouris tried to automate the process and come up with rules for his order-management system that would flag and stop orders that didn’t meet certain criteria.
“The idea was that the system would detect something wrong and alert us, so a human could do a more detailed check,” said Kouris “At first it took maybe an hour or two a day, but then it grew and grew,” said Kouris. Soon the burden on his staff was just too great.
So they turned to a vendor that offered a fraud scoring platform. Fraud scoring systems use predictive analytics and fraud-detection technologies to identify the highest-risk transactions. But this too began demanding too much of his team’s time. “Those tools are better left for actuaries,” said Kouris, adding that fraud-scoring systems are not easy to use, and it’s tricky to integrate them into existing order-processing or fulfillment systems.
“You have someone working for eight to ten hours a day making judgments on transactions. They leave at the end of the day very dissatisfied with themselves, because they’re nervous that they might be wrong—and the financial fallout could be serious.” That’s not what Kouris wanted for his team.
Pressure grew and intensified during peak selling seasons. “You’re supposed to feel good at those times. Tired, but good. But if you’re on the fraud-prevention side of it, you’re exhausted and more nervous than ever,” said Kouris. “And after all that, we knew legitimate orders were falling into a middle ground, where we weren’t sure if we should approve them or not,” said Kouris. “That would delay shipment. It affected our reviews. You just can’t afford that as a growing business because every order counts.”
All of this was eating up too much of Kouris’ time. “I was continually going through rules for the system. But I had to wait because chargebacks are delayed. I tried to measure the results but I kept making mistakes because it was very hard to hit a moving target,” he said.
Within a year, Kouris was burned out on third-party fraud-prevention vendors. “I had to explain to vendor CTOs how their own algorithms worked,” he said. “These tools are not for the faint-hearted.”
Signifyd Works for StockWise Auto
Kouris first learned about Signifyd through recommendations. Two separate contacts that he respected explained that Signifyd would work for him given StockWise Auto’s razor-thin profit margins. “Once we deployed Signifyd, it sped up the time between when an order comes in, and when it goes out. It’s also eased up the load on our staff tremendously,” Kouris said. “Put simply, Signifyd has revolutionized the way we do fraud management.”
“We have a very tight knit team,” said Kouris. “We’re happy growing organically. I didn’t want to put stress on them, and I didn’t want to have to hire a lot of additional workers.”
Most importantly, Signifyd’s business model aligned with StockWise Auto’s. “Companies like us thrive off a very low-profit margin. Fraud puts us at special risk,” said Kouris. “That’s why the pricing, the model, and the whole concept behind Signifyd has been a perfect fit for StockWise Auto.”
“I had to explain to vendor CTOs how their own algorithms worked. These tools are not for the faint-hearted. Once we deployed Signifyd, it sped up the time between when an order comes in, and when it goes out. It’s also eased up the load on our staff tremendously. Put simply, Signifyd has revolutionized the way we do fraud management.”
Founding Partner, StockWise Auto