Many top ecommerce brands rely heavily on operations teams to manage business identity verification in-house. On the surface, this seems easy enough. Just have an analyst spend time poking around dozens of state licensing lookup portals, upload a stack of documents, and presto… license verified. This process may seem straightforward. In reality, it’s riddled with complexities, which we will explore in this three-part blog series.
Hidden Challenges of Pro Beauty License Verification (Part 1 of 3)
What is the reality? License verification overwhelms even highly sophisticated and well-resourced teams at Fortune 50 Ecommerce companies. It’s a surprisingly difficult problem.
For beauty brands, HR teams, and other cosmetology-related ecommerce marketplaces, verifying licensed beauty professionals soaks up thousands of hours of operations labor. Worse, it drives an even bigger challenge, shopping cart abandonment.
It’s a truism in the ecommerce world that time is the enemy of all checkouts. You need a snappy customer experience that empowers them to transact on your platform as soon as possible. Automation isn’t about saving a few pennies on operations tasks, it’s about earning more dollars with every merchant who visits your website.
Why beauty brands build license verification in-house
Third party risk is a hot topic of conversation. Anytime third party sellers or business buyers consider the issue, they must choose whether to build versus buy. Most players underestimate the complex problems they will face. It’s not just a matter of plugging in a few APIs and collecting end-user data. Pro verification can involve documentary evidence, upload portals, Google and HubSpot forms, offshore operations teams, cumbersome spreadsheets containing links to all the lookup portals, and making sense of incongruent state-by-state terminology. And yes, you will need access to hundreds of data sources to complete these steps.
Even when a company successfully automates a sizable chunk of the task, it runs into edge cases where businesses find multiple licenses, duplicate records, and other artifacts, creating ambiguity and confusion. On top of this, they find a number of broken, locked down, or misconfigured state licensing portals. Links to state licensing portals break over time as they are updated and launched, rendering them unusable.
But you’re still not done. Once you've verified the license you must pass the data to a third party platform like Shopify, creating more tedious data entry work for your team. In some cases, 80% of operational time is spent flagging the customer to transact on a third-party platform. It gets messy fast.
Ready to pull your hair out yet?
Now imagine doing all of this during peak demand times such as the holiday shopping season. That’s when automation is especially powerful - when sales should be at their highest.
Remaining compliant
How can you be confident that a license remains active throughout the customer lifecycle? The short answer many companies give us at Mesh? “We can’t.”
Growth should be a good thing until applications pile up in the verification queue. Every new customer increases the workload for as long as they remain a buyer. The ideal verification program is flexible enough to recognize expired licenses. Even better, the company could shift from reactive to proactive and courteously inform its customers the license is about to expire. This could save them from a potentially embarrassing retail experience or an abandoned shopping cart. No one wants to find out their license is expired during the checkout experience.
Don’t forget the in-house system needs a reminder and follow up system to stay ahead of expired licenses. And then how do you manage the workflow? An expired license must be put into some kind of closed-loop workflow to manage the reinstatement.
There is a better way
As we built Mesh, these problems surfaced again and again. Small businesses don't have the resources. Medium businesses lack the process to do it at scale. Large organizations get bogged down in their response time, losing valuable customers to the competition. Would-be customers abandon shopping carts full of products. Rinse, repeat (pun intended). By the time that license is approved, your customer is already checking Amazon or wherever they find the path of least resistance.
These problems aren’t going away. As your business grows, the challenges grow. This is why it makes sense for you to use a trusted partner, rather than stringing together a clunky process that might cost you more than sales. It could be what keeps you awake at night.