How A Touch Of Modern Tech Brought A Touch Of Modern Global

The thing about visionaries is they can sometimes be all about the vision and not so much about the stepping stones that will get them there.

That was the case for former Touch of Modern COO Jonathan Wu: When he co-founded the company five years ago, he didn’t know how complicated international sourcing and payments would be.

The eCommerce merchant sells apparel, accessories, furniture, electronics and other products aimed at the urban male. These retail products are sourced from around the world to help customers discover new items they haven’t seen before.

“When you think about starting a new company, you go in with the mentality that, if things work out, we’ll solve those problems later,” Wu said in a recent discussion with Karen Webster.

For example, Wu said, “When we started to sell furniture, we thought, well, let’s see if people want to buy it, and then we’ll figure out how to ship it.”

The first week Touch of Modern began offering furniture sales, they got an order for a couch made in Copenhagen. Wu said the company had to coordinate with the vendor, figure out international shipping and logistics and navigate the challenges of cross-border payments and foreign currency.

“It was a nice crash course early on,” Wu said. And the team got another crash course in tax compliance after the first year, when a lack of planning left them scrambling at tax season to hunt down information and vendors — some of whom had since gone out of business.

Touch of Modern may have learned some lessons the hard way, but Wu said the need for an international payments partner was pretty clear from the beginning — even before the tax compliance chaos. It just took a while to find the right one.

In an upcoming webinar, Wu and Webster will dive deeper on the journey, the challenges along the way and what other companies can learn from Wu’s experience with regard to scaling payments operations with global growth, reducing friction in working with suppliers, developing “cross-border intelligence” and protecting from tax, regulatory and fraud risk.

Sign up to join Wu and Webster on Thursday, Dec. 7 at 12:00 p.m. EST.


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At first, as the only one with access to the eTailer’s bank account, Wu manually processed payments to vendors directly from the bank — a project that he says took him around five to 10 hours per week, and that was in the early days, before the company scaled to do $150 million in sales per year.

Different vendors wanted to be paid through different methods and in different currencies. International vendors, Wu said, have little trust; they insisted on payment in advance, typically by wire or credit card. Some preferred local currency, while others wanted payments in dollars or euros.

Making sure he got all that straight — and also resolving payment errors and issues that came with it — was a big chunk of those weekly hours Wu spent managing the company’s payables operations.

It didn’t take long for Wu to see that a better approach would soon be necessary. At the helm of a fledgling enterprise, he was double- and triple-checking every remittance to ensure each one was error-free. Although Wu noted that entrepreneurs don’t really get “paid” during this stage of growth, all the same, he knew his time was valuable and could be better spent.

Not to mention, Wu said, he was running a tech-first company, so automating vendor payments using technology made cultural sense, as well. Wu felt Touch of Modern needed to make it easy for vendors to work with its eCommerce platform, lest they churn out to other, more established, platforms with more streamlined payments processes.

Wu expected Touch of Modern to have an intense growth trajectory, so it was important for him to automate this process as they scaled so that he did not need to throw headcount at the problem further down the line. And indeed, as the company grew to surpass $150M in revenue, Touch of Modern never had to hire an Accounts Payable team, or even a person. The company could instead use those savings to fuel growth and innovation.

In short, the company transformed itself into one of those platforms with a streamlined process. Touch of Modern found its way to San Francisco Bay Area startup Tipalti thanks to the guidance of an investor, and has been working with the tech startup for five years now.

Wu said the partnership gave his company freedom to be more creative and develop an entirely new business model, while sourcing with confidence from anywhere in the world.

Wu explained that, once Touch of Modern develops a relationship with a vendor, they no longer have to follow the traditional path of ordering goods, paying the full invoice and settling the complete transaction. Instead, vendors send several goods in advance, and Touch of Modern, through Tipalti, is able to issue micro-payments as each item sells online.

Webster noted that this unusual method also de-risks the business while providing an ongoing stream of payment for the supplier. Meanwhile, Wu doesn’t have to triple-check his math anymore: All that tax compliance stuff is simply embedded into the system.

“We have no problem issuing hundreds of payments per day,” Wu said. “We can send very small payments, and it’s changing how we interact with vendors. We now have a different model for doing retail.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.