Summary
Are you prepared for rising AI software costs? Learn how to adjust your e-commerce budget now to protect your margins.
In this discussion, Stephen Brown and Stacy Walker from LedgerGurus break down the financial impact of new technology adoption. They analyze why AI software costs are trending upward and how this shift affects your bottom line. If you run an online store, understanding these expense patterns is critical for long-term sustainability.
We cover key insights from recent industry accounting conferences regarding software pricing models. You will learn how to forecast these changes and integrate them into your business expense planning before they disrupt your cash flow. This session provides actionable steps for ecommerce accounting teams to stay ahead of vendor price hikes.
Key Takeaways:
- Why AI software costs are rising for ecommerce businesses
- How token-based pricing actually works and what it means for your bill
- What the shift from SaaS subscriptions to consumption pricing looks like
- How to evaluate whether your AI tools are worth the cost
- Which vendors are already moving to usage-based AI billing
- How to match AI models to tasks to control spend
- What every DTC brand should track to manage AI software costs
Chapters:
- 00:00 The Rise of AI Software Costs
- 02:34 Understanding Software Pricing Models
- 05:08 The Impact of AI on Infrastructure Costs
- 07:46 The Consumption Model and Token Usage
- 10:21 Navigating Hybrid Pricing Models
- 12:58 AI as a Sales Channel
- 15:17 Evaluating AI Spend in Ecommerce
- 17:40 The Future of AI Pricing
- 20:15 Optimizing AI Usage and Costs
Guest Info:
Stacy Walker is the Director of Growth at LedgerGurus, where she leads the sales and growth strategy for one of the ecommerce industry’s most specialized accounting firms. With a background that spans business development, sales, and marketing, Stacy brings a front-line perspective on what ecommerce brands are actually dealing with, having spent years talking directly with seven and eight-figure sellers navigating everything from scaling challenges to profitability gaps.
Work with LedgerGurus
If your books aren’t giving you the visibility to track costs like these, LedgerGurus can help. Reach out to see how our ecommerce accounting team can support your brand.
Transcript
Stephen Brown (00:00)
AI software is gonna blow up costs in the near future. Ecommerce businesses need to prepare before the bills show up. Welcome to The Ecommerce Finance Podcast. I’m Stephen Brown with LedgerGurus. Today I have Stacy Walker, Director of Growth here at LedgerGurus,
And we are going to discuss managing AI software costs. Stacy, how’s it going?
Stacy Walker (00:17)
Good. How are you doing, Stephen? Thanks for having me on.
Stephen Brown (00:18)
Good. We just got back
from a conference. ⁓ it was an accounting conference, but there was a lot of t discussion around AI and AI software. And one of the things that I was thinking about is what is this gonna do to costs? So should we get into it?
Stacy Walker (00:34)
Let’s do it.
Stephen Brown (00:35)
Okay. Stacy, do you want to know a little bit about the history of software pricing?
Stacy Walker (00:39)
Yeah, I think it’s a good really good place to start. Why don’t you do you want me to take that or are you gonna take that? Okay, do it.
Stephen Brown (00:44)
I’ll jump in. I used
to be an enterprise software going back to the 90s. So I’m a software veteran before I came over to the outsourced accounting world. And there’s a number of licensing models. So originally there was what was called a perpetual license plus maintenance. You would get the software, you would install it on a server. ⁓
Or a desktop, and you’d use it, and you’d pay annual maintenance so you could update the software. And pricing was fairly consistent. You saw a lot of people sometimes that would just use old software forever rather than paying the upgrade prices. And then we moved into the era of SaaS, and SaaS shifted to a subscription model where you’re paying a monthly or sometimes an annual fee.
And you are running on the service provider servers, or often a lot of these SaaS companies are running on top of the big infrastructure companies. So either Amazon being the most popular one, Amazon Web Services, you have Microsoft Azure, you have Google Cloud. And there was a little bit of cost there. Before, like a software vendor, their costs were essentially sending out the CD or whatever the cost of the download were, almost no cost of goods.
Stacy Walker (01:54)
Yeah.
Stephen Brown (01:56)
With SaaS, there’s there’s the infrastructure costs. Well, those infrastructure costs are through the roof with AI. And I’m gonna make an argument that what we’re seeing today is about to shift very dramatically in the future.
Stacy Walker (02:10)
Okay. Let’s let’s talk about why. So if it’s gonna make a shift, where’s it gonna make a shift? But first, as far as SaaS is concerned, I feel like where we’re at now, we pay like for the software we use, we pay an overall fee t every month for the software, plus every user has a seat. So we’re paying for every user as well. So that’s kind of where SaaS is sitting at at this point, right?
Stephen Brown (02:34)
Yeah, I mean there’s there’s been a couple of licensing models historically. ⁓ for a lot of things, it was per computer. In the era of SaaS, you saw a lot of it move to per user. We’ve seen in the Ecommerce space a decent amount of consumption models where maybe it was a certain number of contacts in your Klaviyo system, or like in the case of
Shopify, there’s there’s a billing against sales. So you see a lot of revenue for sales model. And this consumption model is where I think AI is going just because of the underlying costs of of the infrastructure.
Stacy Walker (03:12)
So where do you think it’s gonna go? Right now we’re paying per seat, I feel like.
Stephen Brown (03:16)
Per user is kind of how it is. I think you’re gonna see things go to a per user and or consumption model, where they’re looking at the amount of tokens being consumed by whatever the things you’re doing in AI.
Stacy Walker (03:33)
Okay, so tell me more about tokens. Maybe for people that aren’t aware of even what they are, give like a really simple explanation.
Stephen Brown (03:41)
Before I do that, let me talk a little bit about the underlying costs that these AI companies are consuming. I think in the era of SaaS, we have gotten used to a near zero cost of the underlying hardware. There’s always been a hardware cost. But Google has really driven down the costs of search to where it was very, very low.
Stacy Walker (03:47)
Okay.
Stephen Brown (04:06)
And that the cost from advertising could cover the infrastructure costs. What you’re seeing with with an AI and these AI models is the how intense the computation is. The legacy hardware was built on things that we all know of. CPUs, it’s the things that are in your laptop, but the AI uses GPUs, and GPUs tend to be.
Much more energy intensive. There’s also a lot more memory demand. We’re seeing a memory shortage. So the amount of compute to do this, these AI computations is astronomically larger than what it is to do traditional computing calculations. And so you’re seeing, you know, all of these AI data centers, you’re hearing in the news about the electricity that they’re going to need to consume.
Stacy Walker (04:49)
Mm.
Stephen Brown (04:57)
you know, I’m I’m hearing like we we are here in Utah, there’s a huge controversy about a huge data center that will need more electricity than all of the state of Utah is producing today. And and water, you know. So all of these costs add up.
Stacy Walker (05:09)
Yeah. And water.
Stephen Brown (05:13)
And behind that, coming back to your question around tokens, there’s this concept of tokens, and tokens are a way to measure how much AI is computing. And a lot of what they do is looking at ⁓ the amount of characters in and out. And so tokens are kind of like the atomic unit of AI computation.
And it’s very easy as we’ve learned to to consume more and more more tokens as you get into AI.
The problem I think we have is we there’s there’s two fundamental problems. Number one, these AI companies are being fueled off of venture capital. So you read in the news about how they’re losing massive amounts of money. Even though they’re making a lot of money, they’re they’re losing even more. So we as consumers are getting a subsidized cost, which means we’re not paying the real value of those products.
Stacy Walker (06:07)
Right.
Stephen Brown (06:07)
And so at some point there’s gonna be an equalization. The second thing I would think about is the drug dealer model. The drug dealer model, if you think about it, your $20 a month or $30 or $25, whatever it is, is not what you’re actually, you know, that that is not covering the costs. And yes, we see OpenAI
Stacy Walker (06:17)
The drug dealer model? Okay, tell me more.
Stephen Brown (06:33)
Wanting to get into advertising, they’re starting to get into advertising and find new revenue models. But we’re not ⁓ the cost of using these products is higher than the cost that we’re paying. And so they’re doing the drug dealer model. They’re getting us hooked with this super low cost model.
Stacy Walker (06:48)
Mm.
Stephen Brown (06:53)
And I think it’s as you see these companies go public, which by all accounts it sounds like they’re going to this year. We saw SpaceX, which includes ⁓ the AI capabilities, go public with a phenomenal IPO. There’s a race to go IPO between OpenAI and Anthropic. And we’re already seeing a monthly subscription plus consumption
consumption model. So if you look into Claude or a lot of these, you’ll see there are limits. And I think that’s the way of the future. I think this base subscription is gonna give you a certain amount of tokens and and usage. And at some point you’re gonna have pay for that overage.
Stacy Walker (07:36)
So the trick is they’re getting us all hooked so that then when it’s time to pay for tokens, it’s a small price to pay for the efficiency that we’ve created using the tools.
Stephen Brown (07:46)
Correct. And and we’re seeing that they’re all, you know, at the API level, they’re pricing per million tokens and and it it’s a lot as if like a developer does on Amazon Web Services or Microsoft Azure, there’s there’s consumption models. It’s like how much storage. And I think this is gonna be the way of the future. So as people are going headlong into using AI tools and building out agents and whatnot.
Stacy Walker (07:48)
Interesting.
Yeah.
Stephen Brown (08:14)
That you’re gonna see more consumption. We’re seeing this a lot of AI-enabled software. You know, there’s really a few AI companies, right? You’ve got, and it’s really Anthropic and OpenAI, ⁓ OpenAI are the big two. And there’s a couple others, perplexity. But everybody else is just making API calls to either OpenAI or Claude. And they’re using, and so.
Stacy Walker (08:23)
Yeah.
Stephen Brown (08:40)
They’re gonna be doing the same thing. They’re gonna be like, here’s my AI powered software. by the way, you’re gonna have to start paying a consumption if you wanna use more than this base level of capabilities. And we’ve seen in some of our software where we use those AI base limits and we blow through them in a hot, hot second.
Stacy Walker (08:53)
Yeah, yeah.
Yeah. So what do you think what do you think the bill is gonna look like each month?
Stephen Brown (09:09)
That is the big question.
Stacy Walker (09:10)
huh.
Stephen Brown (09:10)
I think it could be enormous if businesses aren’t starting to be really thoughtful about how they approach the usage of AI tools. Coming back to my earlier example, a study found that si 68% of software vendors now charge separately for AI features or gate them in premium tiers. So the market is already rapidly moving to this place. I I I think two things will happen.
I would not be surprised to see the base price of these tools go up. Maybe a little bit, just to account for their costs. But I also see, I also think you’re gonna see more limits. You know, it’s this it’s this drug dealer conundrum, right? You gotta give them enough so that they get hooked, so they’ll start building stuff. But you don’t wanna give them too much, right? You gotta you gotta make sure you limit it so that they start being like.
Stacy Walker (09:52)
Right.
Stephen Brown (09:58)
They have to start paying for their usage.
Stacy Walker (10:01)
Yeah. Yeah. Okay, so where do you think all of this is headed then? The hybrid pr the the pr hybrid pricing will take over. Do you think people will suddenly decide, ⁓ it costs so much to use AI, I’m not gonna do it anymore, and they’ll go back? Or are they gonna realign their finances so they can invest more in AI?
Stephen Brown (10:21)
I think hybrid pricing is is already here and it’s on gonna become more apparent over this next year. And I think usage is gonna become you you know, usage is gonna be the the the key thing.
Do I think that will cause people to run away from using AI? No, I think what it’s gonna require is people to be more thoughtful about their consumption. And you know, part of it too, I I heard an interesting conversation recently, whereas if you look at, you know, take Claude, for example. Claude has multiple models, and each model has different costs.
Stacy Walker (10:46)
Yeah.
Stephen Brown (11:01)
So we had the Fable model, which was here for a hot second and then disappeared due to the regulations. But right now I’m looking at Claude, and you’ve got Haiku, Sonnet, and Opus. And who knows, maybe we’ll get Fable or something like Fable in the future. And when Fable came out, I remember they’re saying, hey, just beware, this is gonna take about as twice as many tokens as you’re used to.
I think there’s gonna be a philosophy for how you use this AI to be like, what are the things that the lower cost models are are are tuned for? And what are the things that you need the higher cost models? And the analogy I heard is it’s almost like with labor. Hey, I ⁓ what are the things that I can give lower cost labor? AKI the low lower cost aka the lower cost models.
And what can I give to the more sophisticated, high plate paid employee, aka the higher, newer, more expensive models?
Stacy Walker (11:54)
Yeah.
Yeah. Depending on their role, that would make sense. how are teams going to like we’re seeing a little bit of this now, but how soon do you see AI becoming more of a sales channel and more of a sales and marketing engine? Right now it kind of is. We’re already seeing that shift, right? Where SEO, I don’t want to say it’s dead because that’s dramatic, but it’s definitely shifting some to GEO. So
Like how soon do you think that becomes a bigger player in the space? When are we buying from AI?
Stephen Brown (12:28)
I I think we’re already seeing that. It’s it’s going out slowly. know, OpenAI has
They they’ve launched marketing. I haven’t seen a lot of people using it. I have you know, I’ve I’ve read reading a little bit about it. You definitely have. They they’ve they’ve facilitated some checkouts, although they seem to be running into some bumps. To me, those are revenue models that will help subsidize the costs of AI. I still think that the underlying
subscription and usage costs are gonna go up despite additional rev revenue streams that will emerge.
Stacy Walker (13:04)
Interesting. So what’s the difference between people who adopt AI and people who and I’m gonna say adopt it like we we’re kind of using it and people who go all in on it. Is there gonna be a huge differentiator in the market?
Stephen Brown (13:21)
Well I think we’re definitely seeing I mean you you could you tell me, like, do you guys use AI for critical workflows today within the growth team here at LedgerGurus
Stacy Walker (13:31)
Yeah, for sure. I think everyone on everyone on our team is using AI every single day.
Stephen Brown (13:32)
I don’t know.
If we pulled that out, it’s gonna increase the the the time to do things, right? And I know in the DTC business that I co-own, Sole Toscana, we have replaced certain labor functions with AI tools. So I don’t I don’t think increasing costs are going to force us to go back that extreme. I do think they’re gonna force there they’re gonna be a reckoning for us to.
Stacy Walker (13:40)
Yeah, exactly.
Stephen Brown (14:02)
really look at at what is moving a business forward and what is just nice to have. And or force people to really optimize, maybe buy models and say, Hey, do I could I do this thing with a lower cost model and save some dollars?
Stacy Walker (14:09)
Yeah.
Do you think it’ll be easy for people to determine their R ROI with all of their AI functions? I think so too.
Stephen Brown (14:23)
Ooh, I think it’s gonna be hard. I mean, I think this is
I think this is gonna be I wouldn’t be surprised if we see some software vendors pop up that are around AI cost management. I I’m sure they already exist. I just haven’t heard of them. The analogy that I’d put for Ecommerce businesses, Shopify plugins.
Stacy Walker (14:33)
And so it’s like
Stephen Brown (14:42)
I’ve seen over the years people’s Shopify plugins just bloat. Just bloat, bloat, bloat, bloat, bloat until they’re like, crap, I gotta, you know, take a look at these. Well, I think AI costs are gonna be that on steroids.
Stacy Walker (14:42)
⁓ yeah.
⁓ okay.
Stephen Brown (14:56)
I think and and and so I think there’s gonna be a a reckoning and I think it’s gonna be kinda hard until either the AI software build better visibility and understanding of of of consumption or third party tools. I’m not sure how well third party tools could look at that, but I do think that’s gonna become a bigger issue.
Stacy Walker (15:15)
Yeah. I could see that. I can see that.
Stephen Brown (15:17)
The one caveat I’d put out there, technology has historically tried to drive down their costs or maintain their costs.
I personally can’t remember a time in my career where we’ve seen underlying technology costs blow up like we’re seeing. I I do think that you’re gonna see them really focus more on cost efficiency and models. I do think you’re gonna see them look at hardware efficiency. I guess those are kind of the same thing. You know, NVIDIA, who is dominating the GPU and the AI infrastructure.
Stacy Walker (15:35)
Yeah.
Yeah.
Stephen Brown (15:52)
I think they’re gonna have increased pressure to make their underlying hardware more efficient. But we could we could be going through a period of cost expansion before these industries get back to what they’re good at, which is finding ways to drive down costs of compute.
Stacy Walker (16:10)
Yeah. Okay. All right. Tell me what’s going on with Microsoft right now. Microsoft making it a little shift, yeah.
Stephen Brown (16:15)
Well, there’s a couple of examples. ⁓
Yeah, so Microsoft may, you know, I’ll give a couple examples of pricing. Microsoft announced that GitHub Copilot was going from flat flat premium request billing to usage-based, effective June 1st. OpenAI made a similar shift on April 2nd ⁓ in a variety of their plans. ⁓ I just think this is something you’re going to see across the board.
So that you’re seeing a lot of announcements here.
Stacy Walker (16:45)
Yeah. Yeah. So switching to usage, I I’m going to make ⁓ the assumption that we’ll still be paying for our seats and then usage for each of the seats. How soon do you think the pricing will change?
Stephen Brown (16:59)
I mean pricing is changing.
Stacy Walker (17:00)
Use your
cr use your crystal ball and tell us.
Stephen Brown (17:02)
I think by the end of 2026, you’re gonna see. Yeah, I think you’re gonna see increased pressure on on pricing. I mean, you already see it with Claude, where they have their limits. You know, I mentioned this earlier. But I think you’re gonna see, I mean, Klaviyo has this with their customer agent AI.
Stacy Walker (17:04)
Really? We think that soon.
Yeah. Yeah.
Stephen Brown (17:27)
⁓ I think you’re gonna see this across the board. ⁓ Gorgias which is customer service, is charging on a usage-based model.
Right now with Shopify, Magic, and Sidekick are bundled in together, but I think it’s only a matter of time before as they’re paying larger bills, they’re passing that down to us. We’re seeing this across the across the the board in in a lot of these tools. And I think it’s just because the again as these companies go public.
It’ll be really interesting to see. Are they profitable? I mean, the the the cost of building up these data centers is just enormous. And as you’re hearing about the electricity costs alone, right? You don’t, we didn’t hear about data centers, you know, traditional SaaS infrastructure data centers.
Stacy Walker (18:09)
Yeah.
Stephen Brown (18:25)
consuming as much electricity as the locations they were in.
Stacy Walker (18:29)
That’s true.
Stephen Brown (18:29)
And I think that’s a big component of it is, you know, so if the cost of electricity can go down, that could be a good thing. But you know, my concern is as there’s more demand for electricity, if we don’t see a comparable of new electricity capacity, that you’re gonna have a supply and demand effect where if anything
These costs of compute could go up.
Stacy Walker (18:57)
Yeah. Yeah. Okay, so where do you think it makes the most sense for AI to sit in the tech stack of an Ecommerce brand?
Stephen Brown (19:05)
Well, I think it it sits in a couple of places. AI has bled into all of the software. You know, everybody’s doing AI and they’re they’re they’re using it. And I’d say some people are are doing more interesting things than others. So I think they’re gonna the this the traditional SaaS companies who are now using AI features, they’re gonna be under pressure to do those things more efficiently.
And the AI infrastructure companies likewise are gonna find gonna be under pressure to do what they do more efficiently. I mean, let’s be honest. A lot of us that have gone AI first, I don’t know about you, but I do a lot of things using Gemini or ChatGPT or Claude that I used to be able to do in Google. I just be like and and Google got that transaction of a search result.
Stacy Walker (19:49)
Yeah, that’s true. That’s true.
Stephen Brown (19:54)
Really cheap.
So in one part, you could argue like some of what’s going on really needs to for function more like a search engine, which is really low cost, really simple, quick results. AI tends to be really noisy. And I think, like, I don’t know about you, but I get sometimes annoyed by how verbose AI can be. I’m like, dude, just give me a paragraph. So I think the I think the AI.
Stacy Walker (20:16)
Yeah. Yeah, just give me the answer fast.
Stephen Brown (20:21)
Companies as well as the SaaS software out there, it’s upon them to consume tokens more efficiently. Like a lot of us don’t want paragraphs. We want like a sentence, a phrase. You know, I’d rather have a really concise answer with a reference akin to search than I would like 10 paragraphs explaining why things are good.
or why things are the way they are. So I do think that there’s there’s gonna be pressure from those companies to do a better job of being more cost efficient.
Stacy Walker (20:48)
So
Yeah, give us just a straight a straight answer. Do you think there’s any world where ⁓ people shift back to like a Google type mindset where they’re going back to Google to be like, I mean, Google’s using AI for their answers anyway, but
Stephen Brown (21:10)
Google has the AI results. I I I’ve I’ve found myself use I found myself still going to Google just out of muscle memory because it’s fast. Because they have the the Gemini results right there.
Stacy Walker (21:22)
I feel like the Gemini results are shorter though. If you ask a question in chat, you’re gonna get a much longer response. So I wonder if peop yeah, I wonder if people will start thinking the same as you and I. I just need a quick answer and they’re gonna take those things they need a quick answer to away from AI back to Google, which is still using AI, but it’s just a sh much shorter response and that saves money on tokens, maybe. I don’t know.
Stephen Brown (21:26)
Gemini is there’s yeah. Chat GPT is
Well, a lot of these tools are building model routing into it. They’ve got like auto model detection. And I think you’ll see more of that. Where unless you specifically or explicitly specify, use this model to answer my question, I mean the average consumer probably can’t tell you what the different models do. They just like, okay, the bigger ones better. So I think they will build routing into the models.
Stacy Walker (21:49)
Okay.
Mm, interesting.
No, I agree. Yeah.
Stephen Brown (22:11)
Which will help optimize costs. They’re already doing that. I think you’ll see more of that. The software companies that are implementing these models need to make sure that they’re leveraging that as well. And so that’s not necessarily gonna be the Ecommerce company. ⁓ I think what the Ecommerce businesses are gonna have to look at is: I think they’re gonna have to really scrutinize consumption and press pressure their vendors.
To help them understand how they’re using AI so that when they’re exceeding cost, that they they they have a better insight on how they can be cost optimized. I think the AI companies are doing a poor job of communicating how things are working. Like if I go into Claude
Stacy Walker (22:46)
Yeah.
Stephen Brown (22:53)
You know what they give me is a plan usage limit, which is current session. They’re giving me weekly limits, but they’re not really telling me why I’m hitting those limits.
Stacy Walker (23:05)
people are gonna want to know.
Stephen Brown (23:06)
Yeah, and I think what you’re gonna wanna see, especially as people are building agents or, you know, and OpenAI’s custom GPTs and Claude’s projects, they’re gonna wanna know, hey, which one of these things is consuming my credits? And then I I think you, yeah, help me understand how, you know, which of my things that I’m using to automate are consuming all of my.
Stacy Walker (23:22)
It becomes like an electricity bill.
Stephen Brown (23:32)
You know, is it co-work? Is it ⁓ is it code? Is it ⁓ a project? Is it a a GPT? Is it an agent? And even then, I would want to know further. Let’s so let’s say there is one project in Claude that’s just burning through credits like crazy. I’d still want to know further. Like, could I understand how that usage is be going? I would want to understand how that usage is occurring.
Stacy Walker (23:37)
Yeah.
Stephen Brown (23:57)
So that I can understand how to optimize. And right now I don’t feel like there’s good insights in any of the platforms around usage. It’s just like, here’s your limit, here’s what you are. But I do think you’re gonna have to think about that as you start to move towards higher consumption bills.
Stacy Walker (24:18)
Yeah.
Okay, tell me how like how would an e commerce brand I’m gonna start over. How would an e commerce brand evaluate their spend on AI?
Stephen Brown (24:29)
Let think about this for a second. This is a good kind of wrap up.
Right now, kind of from my previous conversation, it’s a little bit tough. So, what I want to be looking at really what I can look at is really straightforward. How much am I spending on software as a whole? But how much am I spending by vendor? And if I see that cost creeping up, then I’m gonna want to get to as much detail as I possibly can. And I believe that very easily you’re gonna see.
Software costs creep, creep, not just creep, but expand, and could easily exceed any savings that they’re producing. So you gotta the easiest way to do it from a financial standpoint is to look at what is my spend in this category? What is my spend by vendor? As you see that creeping up, start to dig in with whatever analytics you have to understand what ⁓ where the spend is going.
And then you need to start making those assessments. Is the cost of using this outweighing the benefits?
Stacy Walker (25:30)
Yeah.
Stephen Brown (25:30)
And
this isn’t something we’ve had to do in business for a long time, because for the most part, software was fairly low cost and the benefits were fairly clear. But I think as we’re moving into this higher cost era, this skill is something that every Ecommerce business and every business period is gonna have to start thinking about.
Stacy Walker (25:49)
Yeah. And I was thinking about ⁓ earlier you were you mentioned how on Shopify, like all of the plugins that come in, right? All of the add-ons that people get. As AI becomes adopted more, as people use it more, like you mentioned, it’s gonna be in all of the softwares. And I can see people thinking, I need this software, it has AI, I need this software, it has AI, until they end up kind of in that same situation with Shopify, right? They have all of this tech.
And it all has AI, but at the end of the day, is it all providing a benefit to the business or have we inadvertently just added ⁓ a pile of expenses that aren’t aren’t producing any return? So that’s something I think people also need to be aware of.
Stephen Brown (26:32)
And at the end of the day, when I think about software, I think about two things. Number one, is the software producing more revenue? There’s not a lot of software that clearly drives revenue. I mean, there is some, you could argue, you know, Shopify is a revenue component for an Ecommerce business, Klaviyo , you know, email marketing. But even then, you gotta really look and say, is it
Stacy Walker (26:53)
Yeah.
Stephen Brown (26:57)
you know, I’m spending more on the AI usage. Did it increase sales? Yes or no?
The other question you have to ask is AI decreasing costs. And usually the costs are in the form of labor. Am I able to do more with software than I am with people? Or are the same people getting more done, producing more? That is having a greater bottom line impact than ever. And I just don’t think that a lot of people have been thinking this way, but they’re gonna need to start thinking this way more than ever. I will
Stacy Walker (27:12)
Yeah.
Stephen Brown (27:26)
Predict that this is going to become a huge issue as early as the end of the year, but I would not be shocked if it is a big issue in 2027.
Stacy Walker (27:34)
Yeah, I agree. I agree.
Stephen Brown (27:36)
So this
is this is my mid-year pred prediction. I usually do my predictions at the end of the year. I will probably make this a big prediction going into 2027, but I’m calling it now that this is gonna be one of my big Ecommerce finance predictions for 2027, that AI costs will become an issue that every brand needs to be considering.
Stacy Walker (27:56)
I agree. Totally. Totally.
Stephen Brown (27:58)
All right. Let’s call this a wrap. Thanks for joining me, Stacy.
Stacy Walker (28:01)
Thanks, Stephen.