Tiffany Serbus-Gustaveson 0:18

Happy Tuesday everybody. I am Tiffany Serbus-Gustaveson digital strategist with BWG Connect, and we are a network and knowledge sharing group. So we stay on top of the latest trends challenges, whatever's going on in the digital landscape, we want to know and talk about it. We're on track to do at least 500 of these webinars this year due to the increase in demand better understand everything in the digital space. And we'll also be doing at least 100 in-person, small format dinners. So if you happen to be in a tier one city, feel free to shoot us an email, we'd love to send you an invite, these dinners are typically 15 to 20 people having a specific discussion around a topic within the digital space. And it's always a fantastic time, we spend the majority of our time talking to brands, that's how we stay on top of the different trends and challenges within the space, we'd love to have a conversation with you. So feel free to drop me a line at Tiffany@bwgconnect.com. And we can get some time on the calendar. It's from these conversations we generate the topic ideas we know people want to learn about. And it's also where we gain our resident experts such as fullfill, who's with us today, anybody that we asked to teach the collective team has come highly recommended for multiple brands within the network. So if you ever need any recommendations within the digital space, to note that we have a shortlist of the best of the best, and we'd be happy to provide that information to you. And also note that if you have any hiring needs, we do partner with a talent agency now called Hawkeye search formerly BWG Talent that we'd love to put you in contact with as well. First and foremost, some housekeeping items. We want this to be fun, conversational education. Also drop as many questions comments you have into the chat q&a bar. If you feel more comfortable, always feel free to email me at Tiffany@bwgconnect.com, we will get to them. And this is a 30 Minute Webinar. So we're gonna be moving a little fast. And we will formally wrap up at the 30 minute mark. So with that, let's rock and roll and start to learn about navigating the supply chain turbulence and how to find a great fulfillment partner, the team at fullfill have been awesome friends in the network. So I'm going to toss it over to you, Dan and Joe. If you can introduce yourselves, then we can dive right into discussion. That'd be great. Thank you.

Joe Spisak 2:15

Yeah. Hey, everyone. So my name is Joe Spisak, and I'm the ceo Fulfill.com. And with us we have Dan White, who is our CEO, as well, and just really high level overview on us. So we are a matchmaking marketplace. So we help eCommerce brands find the right fulfillment partners. Awesome. I will say I had

Dan White 2:39

a mini panic attack. Tiffany when you said that you've done five you do 500 webinars?

Tiffany Serbus-Gustaveson 2:46

Well, that's so we have a team we have a team is that just be a thing. Yeah,

Dan White 2:50

that's very impressive though. Irregardless. But yeah, thanks, Joe, for the quick introduction as well. Really happy to be here today. And thanks, Tiffany and the rest of the BWG team for having us it's gonna be a good conversation. So

Tiffany Serbus-Gustaveson 3:05

Well, cool, let's kick it off. Like I am so passionate about this topic. Previously, I was a director of eCommerce and Holman lighting for 10 years. And fulfillment was a big one and working with partners that were reliable was a very big initiative that I worked under so the question that I remember was like when when's the right time? Like when do you know like, Hey, I have to start doing my homework and researching and finding that three PL partner because I have that need. Yeah, that's a

Joe Spisak 3:35

really good question. And we we fulfill call that the graduation point. So whenever you start doing typically around a couple 100 Order a month mark kind of marks that time where it makes sense to start your three PL search. Anytime you are spending you know 3040 50% of your time picking and packing your orders and driving them to the post office USPS UPS whatever and you're spending more time that you could be spending doing sales and marketing and growing your actual brand. It makes sense to start looking for three PL and obviously there's you know, different variables in that as well like you know, let's say you're shipping big and bulky products maybe you're shipping furniture you know maybe it's the 50 orders a month or 100 orders a month since you know you're warehousing you know couches or exercise equipment or something along those lines. But any any basically general rule of thumb is if you're spending a decent amount of your day doing logistics when you should be spending it growing your brand. You should probably start looking for a three PL

Dan White 4:39

awesome anything to add them. Yeah, I would say that the the time element is very important. And then there's also the expertise element of it as well as you're looking to grow your business where if there are certain channels that you want to break into, that you might Do not have any previous experience in Are you looking to you're looking to get into retail or wholesale or sell on a different marketplace and the setup that you have internally to fulfill for that, or to even break into those channels isn't there, that's also a good time to potentially consider looking at a fulfillment partner to give you that and pave that pathway for you to do it in a cost effective and efficient way. And avoid those really costly mistakes from a financial and time perspective of potentially trying to do it yourself. Especially if you have volume already in a specific channel or specific seller platform to support you venturing out into a new platform as well.

Tiffany Serbus-Gustaveson 5:47

Excellent. Yeah, you remember, the final moment was when I'm my staff coming back and having been scolded by the USPS lady at the post office because he brought a pallet in his car. And she was like, What are you doing? You know, it was like, okay, the time is now. Great. So the time is now like, what do you look for? What is that checklist to make sure you have a good fulfillment partner.

Joe Spisak 6:13

Yeah, and that's one of the things that's so tricky, because there's different needs for different brands, and really the the old way of doing it, so I've started a couple of different brands in the eCommerce space, and so has Dan. And the old way of doing things was, you know, getting 1015 20 Different three pls that you find via search engine and scheduling calls with them. And you know, really comparing pricing Apples to Apples service levels, apples to apples and kind of just creating your own Excel spreadsheet and then comparing everything one by one. And that is not necessarily the most efficient way to do it anymore. So you know, here's like the top three things that I would say if you are doing it that way that you'd probably want to look for. One would be asking these three people's okay, what brands have you shipped for that look like us in the past. So maybe if you are a you know, makeup brand, or an electronics brand, or a consumer packaged goods brand, I think one of the biggest indicators that they could be a good three PL fit for you would be have they shipped for companies similar to you guys in the past. And there's lots of reasoning behind that, too. Obviously, pricing is a huge component. So whenever you ask three pls for pricing from them, don't just get their fulfillment, service pricing. So don't just get their pick and pack pricing, they're receiving pricing their storage pricing, a lot of three, pls will intentionally not include their carrier rate pricing, which is a huge component to your overall, all in pricing for shipping. So make sure you get your fulfillment, service pricing, but you also get your carrier rate pricing with them as well. And then you can really start to compare apples to apples. reason for that being, you know, folks have different negotiated service agreements with USPS UPS, DHL, eCommerce, and FedEx. So some may have great big and bulky shipping rates, some may have great, you know, small parcel under five pound rates. So you want to know what the online costing is. And then the last component, I would say, if you're doing a search by yourself is to find out the shipping SLA service level agreements. And, and make sure that contractually, those SLA is are included. So one example of that. A pretty good industry baseline would be when someone ships or when an order comes in on your eCommerce channel, you want that order to be pick pack and ship out with the carrier within 24 business hours. But on top of that, you want that in the actual contract language to say that will be done within 24 business hours. And then you want some teeth behind that in the contract as well. So if it is not done, and that Sal SLA is not hit, then you will get back the cost of fulfillment and the cost of the MSRP of that item or something along those lines. So those are the three big things that I would look for when talking to three pls by yourself.

Dan White 9:19

Dan, anything else? Yeah, just a couple things that add on top of that, and just from some notes that I took, I completely agree with what you're saying there, Joe and more on the qualitative side as well. I'd be looking at you know how they are in terms of the sales process with you when you're considering these different fulfillment centers with regards to their communication. are they responding quickly looping in the right people, because that's a reflection of how they're going to be when you actually do send your product your gold over to them to store and take care of for you. And there's going to be problems that come up when you are working with these fulfillment centers and the quicker they are Are to respond, the quicker it gets resolved. The second thing for me is an alignment of values, it's becoming so much more important, as we, you know, pave the path forward in the supply chain space and fulfillment centers in particular, and just the growth of so many different brands and what we can deliver to the world, where there are now many options of fulfillment centers in particular, that you know, offer sustainability initiatives, eco focus initiatives, anything along those lines, or even just general values as a whole, were, it's always a lot nicer when you're working with people that you, you know, you understand and you can easily talk to, and you feel like you're both making a good impact as well. And the last thing you want to be is with somebody that's not a viewing things the same way as you in terms of the mission that your brand has for the world. And we see a lot of partners now and a lot of fulfillment centers, leading with that going forward. So it's something where if it's important to you look for that as well. And then the third thing that I'd say is, especially as you know, the rise of the solopreneur is really coming into play or people launching their own eCommerce brands or scaling brands, to larger heights with less resources is the scalability that the fulfillment centers you're considering offer you because we all know how, how painful it can be to have to switch fulfillment centers, which happens way more frequently than anyone would like, and the opportunity cost associated with that. So do you see a growth path with the fulfillment center that you're considering? Do they have bicoastal bicoastal solutions? Or can they get into they can can they cater to your additional storage needs an additional warehouse space? So those are kind of more of the qualitative things that I would take a look at alongside with the quantitative measures that

Tiffany Serbus-Gustaveson 12:13

Joe mentioned. Excellent. Really reminder, any questions comments, do put them into the chat q&a, and we will get to them. A couple other like things I remember looking at was the IT capabilities, having that EDI API connection to be able to see what the heck's going on? Are you seeing that as like table stakes at this point? Like that's, that's a must? Or is that still a nice to have?

Joe Spisak 12:41

Yeah, that's a must. And it plays directly into what Dan was talking about with the scalability of the three PL that you choose, you want to dive into the tech that they have? And can they chill? Can they scale with you into a more omni channel approach. So this is what we see typically as like a growth trajectory with a lot of the brands that we work with, they'll start off with kind of a core base as in like a Shopify or WooCommerce, or big commerce. And then they start to grow and become more omni channel in nature. So they'll add on an Amazon FBA or FBM, component walmart.com, eBay, Etsy, etc, etc. And then as they continue to grow, they start to push into b2b and retail, which require EDI, obviously. So yes, technology is a huge factor in that. So you know, you'll see a lot of common pockets of warehouse management systems like you'll see a lot of three PL 's that are on a ship hero or three PL Central or a logical and you want to make sure that they have some sorts of means to further integrate through EDI. So once you start doing more b2b and retail, they can kind of seamlessly transition into that. What you'll see a lot of the times is combined with one of those Warehouse Management Systems is a partnership with like an SPS commerce or a commerce hub, which connect directly into these warehouse management systems and are almost like the middleman to retail and to EDI. So yeah, great point, Tiffany.

Tiffany Serbus-Gustaveson 14:10

Yeah, it's one of those things as you're scoping out this journey of making sure that you're allocating that time for integration to get those systems in place. So you have the transparency of what's happening, and also how fast you can ship to the customer. So Location, location, location, right, so any tidbits on that of recommending a heat map of where most your customers lie within the country and like focusing on those areas when you're looking for a partner, or do you focus on the areas of where you want to grow and we want to get more scalability in those markets as well.

Joe Spisak 14:47

Yeah, great, great question there and Dan jump in if you have anything as well but it's always like kind of a cost benefit analysis with geography on where what port you guys are coming into We'll and how far away is, is another three PL that can have better storage rates? And what is what will that cost to actually freight it to that further location. Perfect example that we see the most is people's inventory coming into the Los Angeles port. But we all know, you know, storage costs in LA are just skyrocketing. Right now we're seeing, you know, $40 plus per pallet per month to, you know, be in the LA area, which is really, really high compared to, you know, like a North Carolina or South Carolina, where, you know, we just placed one of our larger customers 12,000 pallets, and we have it for like $7 per pallet per month over there, right? So we're seeing a lot of people coming into LA port starting to push their freight further out to like a phoenix or a Nevada or a Utah that can have these cheaper per month storage rates. But then again, it's a cost benefit analysis between how much is it actually going to cost to run that freight to that location? So these are all things that we consider from a geographical perspective. And then the second part of that is, where are your orders actually going in the country where they actually going internationally? And that's why you know, you kind of have to run all of these variables together. And something that factors into that, you know, heavily pun intended is, how much does your product actually weigh? Because the bigger your product is, from a weight and a dimensions perspective, the closer you're going to want to be to the end customer. And then you can start to factor in zone skipping, which is a whole nother webinar discussion we could have but yeah, geography 100% plays into our decision making for placing people at 3pm is like very, very heavily. Excellent.

Tiffany Serbus-Gustaveson 16:45

And container load versus truckload, I'd say to like, that's the devil in the details of if you have a container coming directly from overseas, let's say China, and it's being received there, you know, what's that cost versus if you do a truckload of a few pallets, because that was a little eye opening. I remember when I saw that discrepancy in the pricing of a container receiving versus a truckload being received. Very cool. Yeah, we have about 10 minutes left. You know what, I guess at this point, there's so many options now. And there's all these different types of fulfillment solutions. So let's run through those specifically to the boutique option, because that's definitely something we're hearing more of. Yeah, so

Joe Spisak 17:30

I've been talking about this for a while now. And I used to for some further context, I used to own my own fulfillment center called based out of Central Pennsylvania. And I've been saying for a couple years now that I feel like we're living in the rise of the boutique level three PL, and, you know, there has always been, you know, these venture capital backed options that you know, have raised a ton of money and are able to kind of blanket the internet with millions of dollars in ad spend. And a lot of people you know, really just think that there's 25 Different three PL options available when in reality there's 22,000 plus three pls domestic to the United States. And, you know, keep in mind like that there, you know, three PL is a pretty loaded word third party logistics. So a fraction of those would have be actual eCommerce fulfillment centers, but moral of the story is, there's lots of different three PL options to choose from. So when you look at these boutique level options, we're starting to see now that from a communication standpoint, from a shipping SLA standpoint, from a pricing standpoint, the quote unquote little guys are able to actually, you know, start to surpass some of these, you know, more household brand name three pianos that we see out there often. So yeah, that's, you know, these boutique folks, like we consider them to be, you know, 3040 50,000 square feet plus all the way up, you know, to the million square foot range, but they're just able to give higher touch fulfillment than you know, some of the bigger options out there.

Tiffany Serbus-Gustaveson 19:06

Okay, cool. Um, oh, a note here that for those interested so you're talking about a are still doing today ground to Los Angeles area. So that is Yeah, good point. Are there this type of Amazon of brands that maybe haven't embarked on the Amazon journey yet? They want to test the waters, but don't want to go full into FBA? Is this a viable option?

Joe Spisak 19:34

Yeah, so that's what's so great about FBM fulfillment by merchant is that you can use a three PL and let's say you're shipping Shopify and it's so easy to add on an Amazon FBM component and it treats it the exact same the three PL will treat it the exact same as a Shopify order coming in. So if you want to, you know, use a three PL, try out Amazon FBA. Em, and then if everything's looking really good and you want to, you know, have your three PL, prep that up and ship that into Amazon. So you can do FBA and get the prime badge. It's a really easy way to test the waters and see if you actually have a viable product there that you want to, you know, push fully into FBA. And then, you know, regardless on whether you go FBA or not, you should still always have an FBM listing to your Amazon listings. And here's why. So we see this happened during q4 with you know, a lot of the different brands that we placed with three pls is that something will happen with with FBA, and they'll be out of stock for you know, a one week two week four week period, because something went wrong with the supply chain with Amazon. And they don't have what we call an FBM failover listing. So you want to have an FBA listing, but then have an FBM failover. So even if something happens with your FBA listing, and you run out, you don't completely delist your product from Amazon. And instead, it just kicks over to whenever the item is purchased. Instead of Amazon fulfilling it directly from their warehouse, it will kick over to your FBM listing and your three PL will instead fulfill that product. So that's like one of the little tricks of the trade that we always tell our brands to make sure that they're doing if they're if they're going the FBA FBM route.

Tiffany Serbus-Gustaveson 21:18

It's such a good point. And it's so true that it really does hold as a safety net. Because there's times where Amazon I remember waiting three to four weeks for them to receive a truckload of our goods, and it's just sitting in limbo. And I think that's too something to consider as you are doing truckloads to a three PL is the time that that inventory will not be live, you know, plan accordingly. Because it does need to travel and be received and potentially be packed. So those are all things as you're building out your project plan, what to think about. Alright, we got a couple questions here. So when comparing the cost of three PL versus FBA, you have to compare the total costs that just storage and shipping. Very true. FBA gets the Buy Box more often made more sales so much more often, the actual total costs are more difficult to calculate a true costs volume versus margin. The classic Yes,

Joe Spisak 22:16

yeah, that's That's correct. And I mean, from what we've seen with our customers, we see like I'd say a 25% plus uptick whenever you actually go to using FBA. So that's one of the you know huge advantages of using it is that you're going to see a semi substantial increase in your sales going the FBA route. But yeah, you know, there's other there's, there's lots of things to factor in with that as well. I mean, the biggest, the biggest, I guess, disadvantage of using an Amazon from an eCommerce brand perspective is that you don't get to retain your customer data when you make a sale, as opposed to selling on a Shopify where when you make a sale, you can more consistently grow your brand because you can further email remarket text message remarket back to that customer. And as you add on new products, it makes it much easier to scale. And, you know, when you're looking to sell your brand, your multiples are going to be much better as well.

Tiffany Serbus-Gustaveson 23:12

So, so true. But I think it really comes down to objective, you know, what is the objective and sometimes out by the three PL and by the SKU level, this SKU is a volume driver, you know, that's just what we want. We want to Amazon the SKU, we want to gain more one P data. So we're going to harbor that, and we're going to be strategic about it. So I think in mapping out what you're what you want to do with the three PL also map out, what do you want to do with these skews? You know, what's, what's the reason behind them? Because they really can all have a different directive. And that's okay. As long as you know, everybody understands that. This is an interesting question. So compared to the previous years, are you seeing a slowdown in new startup e-comm brands? Yeah, we

Joe Spisak 24:01

had a great question. And we have a really good holistic look on the industry. So we talk to a little over 300 brands per month right now where we help those brands find the right three PL partner. So you know, we get a look to see what's going well and what's not going well, kind of split by vertical and e-comm. And it's interesting because when we take a look back through the years, where we really started to notice a slowdown was after the iOS update that started to really disrupt the attribution of running Facebook and Instagram ads. You know, even Dan and my eCommerce brands we saw, you know, a pretty big hit. And I know with one of my brands personally, we pivoted hard to using Amazon a lot further. But once the iOS update came out, we saw brands kind of across the board, eCommerce start to take a little bit of a dip and it looks like we're just kind of starting to recover right now. But yeah, we've seen a lot of a lot Have like even pretty good brands have to shut their doors or pivot drastically in a new direction. But I'd say like, yeah, we're dipping right now pretty hard, but looks like things are gonna be coming back here pretty well, Dan, anything to add?

Dan White 25:15

Yeah, I would just say one thing that we've kind of noticed from that trend is that for well established brands that you know, are growing or have lots of historical order, volume and success 2.2, there's never been a better opportunity than right now to be able to dictate and drive your terms with fulfillment centers since volumes are declining elsewhere. And really, if you're considered a stable bet, and a stable client, that's incredibly attractive to three PLS, especially for the cash flow that's associated with that. So they're willing to move a little bit more than maybe they wouldn't have previously. It's just kind of an add on lagging effect of some of the smaller brands or newer startup brands not scaling as quickly as was maybe expected previously.

Tiffany Serbus-Gustaveson 26:15

Got it. Super interesting. Couple questions here before we end. So when negotiating an SLA agreement with the three PL partner, how common is it to establish a minimum and maximum volume commitments or requirements with the client?

Joe Spisak 26:31

I'd say very common. And what we're seeing more and more with three pls is, especially with pick and pack pricing, establishing a tear. So hey, if you can do zero to 1000 orders per month, we're going to charge you $2.25 per pick, plus 50 cents per each additional pick, or start to 25 per order plus 50 cents for each additional pic. And then they tear it out. So once you're doing 1000, to 2000, orders, 3000 to 5000 orders etc, it will start to drop down to the point where it could be, you know, $1 per order plus 10 cents for each additional pic, depending on your SKU count and things of that nature. So I think you know, even going even further than potential, you know, minimums for order volume, people will just bake in a tear to the pricing contract and say, Hey, if you hit this last month, like your next month, or sorry, if you hit it this month, this is what your pricing will be for fulfillment options. So you don't have to keep going back and you know, renegotiating shipping options, or picking back pricing options. But yeah, I think we see that quite frequently. And then as as in terms of like actual minimum commitments, we'll see like, first of all our customers like, Hey, if you don't do you know, 250 orders per month, we're going to charge you guys like 500 or 1000. Order $1,000 minimum per month, we'll see that a decent amount to

Tiffany Serbus-Gustaveson 27:51

Dan, anything else? No, I don't have anything else to add to that. Awesome. Well, any final thoughts as we wrap it up here, if you were going to go out today, and all right, this is what we're doing on the roadmap, we're going to look for a three PL, which they do. Oh, so if

Joe Spisak 28:13

you are looking for three PL definitely come talk to us at Fulfill. So we have little over 703 pl locations on our network where we are able to talk to you, as a brand owner, get your scope of work, take that information, put it into our software system and reference that against our network of 700 plus three PL locations to help shortlist and introduce you directly to who we think would be the best fits for you guys. It's a way to qualitatively and quantitatively, be able to narrow down to your best three PL options. You talk to those owners, and then see who could be the best fit for you. And then if you're going you know the other route and you wanted to kind of do this yourself, you're more than welcome to do that too. But you know, you should create some type of Excel workbook and look to compare everything individually yourself there. But yeah, you know, so I'm obviously biased. But I think that's a good time to plug us and hop on over to us at Fulfill. We offer this as a free service to all brand owners. So you know, it's worth a shot. Not going to take much time on your end at all.

Tiffany Serbus-Gustaveson 29:15

So awesome. Anything to add in? 

Dan White 29:19

I think I think yeah, I fell twice. 

Tiffany Serbus-Gustaveson 29:26

Very cool. Well, thank you so much, Joe and Dan for the awesome content and direction we definitely encourage follow up conversations with the fulfill team and the football team had been awesome partners with BWG Connect. So we greatly appreciate you. And we greatly appreciate everybody on the call today. So please reach out. We will have future webinars, always check out our website bwgconnect.com for what's coming up and always feel free to reach out to me at bwgconnect.com. Take care. Have a wonderful week and see you next time. Thanks. Thanks, guys, everyone.