How We Rebuild This – The Next Six Months in Ecommerce

In the fourth and final installment of our “Ask-Me-Anything” webinars, we’re joined by George Wojciechowsky – Co-Founder of ShipBob – to discuss the ecommerce trends his team has identified over the last month.

In this webinar we explore:

• The data trends that ShipBob has observed over the last several weeks.
• The lessons George has learned navigating the pandemic.
• How ShipBob is adapting to serve their customers through the pandemic.
• How ShipBob’s marketing and sales objectives have shifted.

Transcript:

• Jon: Alright, everybody, thank you so much for joining us today. I am very excited to be doing this webinar with George Wojciechowsky. George is the co-founder of ShipBob and head of partnerships. He advocates for merchant empowerment by working with partners and platforms to develop a best in class ecosystem of solutions for eCommerce merchants. So George used to be ShipBob’s head of the signature shipping services by establishing strategically located fulfillment centers. So George has actually launched and operationalized fulfillment centers in Chicago, New York city, LA, San Francisco, Dallas, and more. And so prior to this he worked in futures trading, which I definitely wanna dive into, especially in these times George might be interesting to see the lessons learned that can be applied. But he really wanted to build something more unique in the world. And this extends from ShipBob as a company down to the hiring and training of all the individuals that constitute the next generation of leaders and employees. So welcome George.
• George: Thank you John. Thank you for inviting me to be on this webinar with you guys and I’m excited to talk to everyone and engage and find out you know, talk about my perspective and what we’re seeing in ShipBob and also learn about everyone else’s perspective and what they may be seeing. So happy to be here.
• Jon: Great, yeah, I’m super excited because, I think in these times the e-commerce seems to be in a 50, 50 split from what we’ve been hearing on our research where some brands are just going gangbusters, right? And some brands are having a bit of an issue with supply chain perhaps, which is hard to get products in and then even get them shipped out. And I think what we’re seeing is there’s a segment of that group that I’ve been talking to and this is why I was really interested to bring you in is, I think it’s going to be really important over the next six months to have the operation side of these eCommerce businesses really ironed out. And that’s gonna make all the difference for these folks. And what I mean by that is if you’re still trying to ship out of your garage for instance, and you’re working on that all day long. That’s really hard to take advantage of all of the other opportunities that are out there for eCommerce businesses as we go through these times right now. And I think it’s going to be really important over the next six months. And that was really why I wanted to chat with you guys. Have a good understanding of as all these eCommerce brands look to rebuild over the next handful of months and continue to take advantage of the times that we’re in in terms of being able to drive more traffic and convert better, but also means they need to get the products out. And more and more brands direct to consumer brands are seeing their shipment levels rise pretty dramatically right now as products like, you look at Amazon and they were for a while, they may still be looking at only shipping a certain types of products or at least limiting that a little bit. So I think what we’re finding is that DTC brands are really having a just a banner year and being able to take advantage of these situations and and really get the products out to consumers and those who are doing it most efficiently are going to win. So as you think a little bit more about logistics, I’d love to hear just kind of one on one. First of all, why don’t you give us the 30 seconds on ShipBob just for those who may not know they’re coming to this. I think most people who are in e-commerce know ShipBob, but could you give us just a quick 30 seconds on it?
• George: Yeah ShipBob is a six year old shipping and fulfillment company will be six on June 6th of this year. It’ll be our sixth anniversary. We came out of Y Combinator in the summer of 2014 and our goal as a company has always been to provide the new generation of eCommerce merchants with the same tools, reach and scalability as the bigger players in eCommerce. What we saw back in 2014 and 2015 was this very fast evolving democratization where individuals with an inspired idea for a business or a product could go on platforms like Shopify and create a very good website and be in business in a matter of hours. Most of the time days, by the matter of hours. And we wanted to support those merchants because we felt that it was what they were creating had a lot of value in what came from a very unique perspective, not a fortune 5,000 company perspective that went through R&D and marketing research, but like inspired ideas from individuals. And we wanted it to be the facilitator to help them compete on the same level as the bigger players in eCommerce. And we do that in a couple of ways. We’ve built our entire tech stack geared toward this merchant, the idea of this independent merchant. And it’s been a quantum leap as far as the 3PL industry goes. Now it was in its time and its still is. But it was a quantum leap in that we provided technology that centralized all the information a merchant would need for the economy the shipping and logistics part of their business under one platform in one centralized place. And also provided really heavy analytics for them to be able to dive into their data and make decisions based on the data that their businesses providing, via where customers are ordering from and what frequency and what velocity. So the software component is super important, but there’s a lot of great software companies out there. We’ve merged that with owning an opera or operating a network of seven fulfillment centers throughout North America. Pennsylvania, Tennessee, two in Texas, Florida, Chicago, California Ottawa Canada and soon Kilkenny Ireland. And what that allows to do, that’s the great equalizer in the sense that it allows merchants who maybe they’re selling vegan handbags on the lower East side of Manhattan or they’re running a cosmetics company in Portland, Oregon. They’re normally shipping from one location to all over the country and all over the world. Well the strategic advantage that bigger merchants have, the Amazon and Amazon’s and the jet that comes in the North terms of the world is that they have hundreds of millions and billions of dollars invested in logistics infrastructure. That allows them to ship products basically anywhere in the country with two day ground shipping, and be essentially free or very low cost of shipping. And they set customer expectations. So if I’m this business that’s doing or it’s running a cosmetics company in Portland Oregon, and I’m shipping to New York and Florida, my shipments are taking three, four or five days to get there. And I have to charge merchants for shipping because it’s going through six, seven, eight shipping zones. It’s an expensive process. While with ShipBob in short is we’re able to work with merchants to distribute their inventory throughout our network so that they too can reach basically any customers in North America with two day ground shipping at a very inexpensive price per shipment. And also meet customer expectations by delivering it to their door within 48 hours of the order coming through.
• Jon: Yeah, that’s amazing because that’s always the value prop that I share with our clients in discussions I have here at the good is you should definitely look at ShipBob because it helps you provide prime like shipping to your customers without having to be on Amazon. And you get all that margin, you get all of the data, you get all the customer information and you get people who have a better conversion experience on your site. Once they do convert, if you want them to come back again, you have to have a great shipping and fulfillment experience and–
• George: And that’s the point Jon, absolutely. You essentially brings the power and the data back to the merchant while delivering on the same capabilities that you might find with an FBA.
• Jon: Mm-hmm that’s wonderful. So I know you guys recently came out with trends.shipbob.com A great site that kind of a sharing a whole bunch of data. I’m not sure how involved you were in that specifically, but what were the major findings from there that you recall and can share with us? What was the most interesting point perhaps?
• George: Yeah, it is a super interesting tool. We felt early on when this COVID crisis started to unravel is that the best thing that we can do right now is not sell our customers or sell our value proposition, but to provide data that makes that informs our merchants and merchants anywhere, whether they’re working with ShipBob or not. With information that allows them to have a good sense of what’s going on as well as make decisions for their own business. And so Casey Armstrong, our CMO and Nick Carter our partner marketing manager worked with our analytics team to kind of dig into our data and find out, okay, as this crisis has evolved, what are the trends we’re seeing in terms of which products are shipping and in what velocity and how does that look? And it’s been super interesting. One of the main, the main conclusion is that, and you alluded to this earlier in the conversation John. There’s been massive growth across the board with retail stores closed. Doesn’t matter what you’re selling, we’ve seen a huge uptake in e-commerce shipments over the last six, seven, eight weeks that wasn’t expected. I don’t think anybody expected it in their business plans going from Q1 to Q2 but there’s been a massive uptick. And if you go to trends.shipbob.com, which I highly recommend everybody does cause you can get lost in the data and it’s super interesting. It was funny like in March how you saw products that normally are fairly steady, shoot up things like baby formula, I think shut up or baby products and baby nutritional products shut up 700%. And the usual catalysts like cosmetics, apparel electronics fell off the board in the early weeks of March. And you saw supplements and nutritional things go through the roof and then the other kind of the usual catalyst dropped. But what we’re seeing if you look at it now is in early April, and this may be a sense of maybe people are bored or maybe they’re, the weather’s changing and they’re buying summer gear. But you’re starting to see an uptake again in the traditional catalysts that usually lead the verticals that lead, what we’re typically shipping out of our fulfillment centers but–
• Jon: Do you think that’s like kind of a new normal as I hear quite often now where people are just getting used to us being in this situation, they’re not as fear driven anymore perhaps, or they’re not thinking about the essentials as much cause they’ve got those covered now they’re getting back to normal buying rhythms perhaps even though they’re stuck at home.
• George: Yeah, exactly. I think that people have come a long way since early March in terms of acceptance of what’s going on. They’ve stocked up on their supplements, they’ve got their organic tissue paper and other essentials that they need, or at least they’re comfortable with the amount of inventory that they have personally. And they’re sitting around the house 7:30 at night and they’re looking about like, well this might be cool to wear during the summertime or I could use this cool sporting equipments once the tennis courts open up. So people are starting to accept the new norm as you said and start thinking about like, well, what’s life gonna be like when it does get back to normal and what kind of things would I enjoy doing? And we’re starting to see that if you can, it’s fairly evident than the trends that ship out website that you start to see an uptake in these categories that people are just, back to their usual mentality of thinking about, activities, and apparel and things like that.
• Jon: Yeah, it’s a great site. As a data nerd myself obviously being in conversion optimization we do everything with data back decisions, having data like this it’s just been really eye opening for us, and being able to keep our customers informed of what’s happening just in general market place. But if you go on this site, you can look at things by vertical by transit times. You can break it down state by state, so you can really see and slice and dice this information. It’s a great resource. Yeah, so I guess we’re good. So everybody listening you please put your questions in the Q&A. We’ve already got a handful in here, George. So maybe I’ll just throw some of these in as we go.
• George: Sure.
• Jon: And we can, you know, I’ll just start at the top here. So somebody asks has ShipBob adapted to using robots in the warehouses yet. Are you still dependent on human labor?
• George: Yeah, great question. This is a question that’s kind of trailed us for the last couple of years as like robotics have become more and more prominent in the fulfillment space. We’ve done heavy analysis on this. And we do have a function of our fulfillment centers that utilize mechanics and robotics, but it is still predominantly serviced and operated by human beings by a far away majority. And we’re very comfortable with the ROI of utilizing people and creating jobs versus investing perhaps a couple million dollars or as much as $10 million in a robotic system. And revamping the entire process. We’re using robotics to help people do their jobs within the fulfillment center. But the robotics themselves are very limited in terms of actually providing a function that a human would previously do themselves.
• Jon: Yeah, and I think that goes really well into this next question I was gonna ask you, which is, do you guys allow clients to run split tests in regards to inserts or packaging? Cause that seems like that’d be something you would want to do through human involvement anyways, right?
• George: Yeah, that is a great question. So, that I understand it correctly. So you get say 100 orders and you want us do inserts and 50 of a certain kind and another 50 units yeah, absolutely. That’s pretty easy for us to do. Essentially what we would do is mark each of the inserts separately as an individual skew. And maybe mark the first 50 orders to get this skew. And then on the back end we would make some adjustments to the dashboard or the merchant would make some to the dashboard and we would see, okay, here’s the next 50, we’ll get these inserts. So yeah, we’re pretty flexible. We’re all about branding and unboxing, creating an opportunity for a merchant has shared unboxing experience with their customers. So a lot of that stuff that you might be find difficulty or resistance to. In other fulfillment operations, we’re very pro, so whether it’s a custom box or using a sustainable materials or sourcing custom tissue paper or inserts, we’ve structured our operations to be very conducive to that.
• Jon: That’s wonderful yeah, that’s something that as we always are doing onsite AB testing, a lot of the things we do look at is what’s the post-purchase situation look like. When we’re auditing a website that is something we always want to look at. And we’ve worked with brands that we get the clothing and t-shirts just watered up in a ball in a bag and sent to us and it’s like, that’s not a great experience right? And so that’s when we bring people to you guys and say, hey, this should really be a better fulfillment experience. If this is the best that your internal team’s gonna be able to do then definitely outsource this.
• George: It’s funny how you can kind of tell where the merchant is and their merchant journey. We’ve been at this six years and you see how people do things for like the first six months to a year where they’re bootstrapping at themselves and maybe they send you a couple sample shipments and it’s just like you explained t-shirts rolled up in a poly mailer and you’re like, huh. But as their product has caught on and they’ve created an audience, they start to take things like that more seriously. They start to take branding more seriously. And at a certain point they go out looking for a scalable fulfillment partner to kind of help them level up in that regard.
• Jon: That’s great. I really wanna get back to trends. But one more question around this. As somebody just asked, do you enable merchants to do dynamic content inserts or packaging other than the obvious labels and addresses?
• George: Mm-hmm, I’m not sure I understand what dynamic content is.
• Jon: So maybe you could put a personalized printed message and an insert something of that sort of
• George: Yeah, so that’s a question that’s trailed us from the beginning as well. So early on when we were a bootstrapping company, we would do it all day long. We would have brands selling custom mugs or something that was very boutique. And that handwritten note really made a difference. So myself and anyone else on the team would sit down and write 150 of those or like sign the name I don’t know. We would do all of that, but unfortunately it wasn’t scalable. So over time we did find a scalable solution. It may not be as custom as people ideally would love, which is like a handwritten note to each individual person. But we can include a message on the packing slip that comes in with the orders so we can digitally write a little message on there and include that in the shipment.
• J: Awesome that’s great. So getting back to trends, can you tell me a little bit more about why you decided to put that site together? I know we’ve talked about what’s on there and the benefits out of it, but why did you decide to put that together?
• G: Yeah very simply to help others. We knew that this was an extraordinary time supply chains were out of whack and we can’t remember, nobody can remember the last time where people actually had trouble getting products that fulfillment centers were closing them. I don’t think it’s happened in anyone’s lifetime because we have a few, we’ve had financial crisis and things like that but never in the sense that we’re like, hey, people may not have access to materials. So we look at the landscape and see, okay, selling right now doesn’t make any sense. What can we do to create value for merchants and the broader e-commerce community? And the answer was, we can help others by providing data. We have over 3000 eCommerce merchants saturated around over 30 plus countries. We have great data that we can share and let people view this and interpreted however it’s most valuable to them. And so that was kind of the positioning that we took back in early March. And it’s not only in regards to the trends that shipbob.com, which, no, Nick Carter and Casey Armstrong did such a phenomenal job but nobody ever expected it to go viral. And now it’s being used on websites across the eCommerce community. But nobody really expected that though. The priority was to let’s get information out there to help others. And it’s not only limited to the trends that shipbob.com it’s in the content that our marketing team and our content team has pushed out. It’s all been about informing and it’s all been about giving people data. As well as Casey and Nick are also have been hosting this operator series weekly for the last three or four weeks that you know about John. And essentially we’re getting merchants to get on a conversation, a four way conversation and allowing other merchants to ask them questions about what’s going on from their perspective, what are they seeing. So that all kind of follows this theme of giving people data, informing them and letting them know that we are a reliable third party data source right now. And that’s what we feel that they need most.
• J: That’s great, yeah. And also just not reinventing the wheel. That’s the big thing I’ve seen coming out of those Q&A’s as well. With these operators has been, if these operators have figured things out, why you don’t need to go repeat the same mistakes, right. Learn from their mistakes and learn from what they’re doing where they’re being successful right now and implement that yourselves so–
• G: 100%
• J: Yeah, as I say, great artists steal so that’s great. So I’m interested, what kind of business goals or KPIs do you think for eCommerce brands have been really impacted by the pandemic?
• G: Oh, that’s a great question. Well, as far as business goals go, like I mentioned earlier and you mentioned it also early on too, that this as far as like e-commerce and the e-commerce industry has been the Black Swan event that nobody ever predicted. And one of the things that you were talking about earlier that kind of was, well struck a chord with me is like how our business is going to prepare for in the next six months for what their business is gonna look like in the future. And there’s going to be a lot more emphasis on what happens when an event like this happens in FBA closes what won’t accept my inventory because I’m selling candles and it’s considered non-essential. What happens if my fulfillment center shuts down, because they’ve had two or three cases of COVID-19 and they can’t run operations anymore. So I think one of the things that eCommerce brands are really gonna start taking into consideration is what do we do as our fallback plan? We have how we’re doing fulfillment now, but maybe it’s worth it to have a backup fulfillment center that we can move inventory to. Let’s secure and double back an alternative route for our supply chain. If we’re ordering products from China or in South America or another country, how do we have a fall back in case that gets cut off at some point. So there’s gonna be this emphasis where people never really thought about it before about business continuity and the steps they can take to make sure that they stay in business when a Black Swan event like this occurs.
• J: Yeah, I saw a really hilarious meme along those lines this week that said it was a bunch of, like a board of a company sitting in a boardroom and they said, what was their digital plan? And the hell said digital transformation COVID-19. And I thought that was really funny because it’s like, yeah, all these brands aren’t really thinking about the digital operations and all these other things they could be taking advantage of, but now they’re forced to think about that and they’re only forced to think about it and actually take action because of what we’re going through right now. So I thought that was really interesting and definitely ties in well with, you seeing people in brands thinking about continuity, which is really gonna be important I believe as well.
• G: I also think that there’s a little, and another thing that I just wanna mention really quick is looking at the analytics of your business, find out who from your are most of your orders still coming from your, how are, what are the buying patterns of your tried and true customers during this time and how many new clients are you seeing? There’s this company out in Brooklyn called O’Douds. They make pomade and men’s grooming products. And things like that. And I’m a big fan of their products and I use them and I wanted, even though I didn’t need to I didn’t need more product. I went specifically online and ordered from merchants that I still want them to to be doing well and to spend my money with them during this time. So like what is your merchant makeup right now look like if you’re getting orders, are they people coming in new first time buyers or are they perhaps your core and how is your core reacting during this time? Are they still buying or they’re reminded by their buying pattern elsewhere.
• J: Somebody asked a relevant question to this, which is, what would you recommend for using 3PL as a fallback plan? Is there a particular months worth of product that you would recommend or some other way that you would engage with ShipBob is that kind of a second continuity plan?
• G: Yeah, that’s a great question. So, yeah, if you’re fulfillments, if you’re working with a fulfillment center, you may want a formal relationship as a backup that you know, that like, okay, if one shuts down, I need, I can call these people up and perhaps they’re not going to be experiencing the same problems but not to ship out as value proposition. But I would look to link up with a fulfillment center that has a network. It’s a lot easier and it’s already a built in backup if the fulfillment center that you’re working with has multiple fulfillment centers. So maybe one does get shut down, you still have three or four options to move inventory to. And it’s a lot easier because you don’t have to re onboard with a new, fulfillment center, with different SLAs and a different tech stack and the different structure. So ideally you would want to find a partner that has a network that if something happens in one part of the network that they can transfer your operations to another part.
• J: That’s a great idea. And a great point there. So thank you for that. Can you talk, I know you’ve just mentioned at one brand that you’ve found that has been doing a great job recently you wanted to support. What have you guys seen over at ShipBob, of companies that have done a great job pivoting in the last few weeks?
• G: Yeah that’s a really great question. Actually product diversification is something that I didn’t expect going back to March, but looking at what some of our merchants have done over the last six weeks, I am beyond impressed. And it’s not right for every business I think you still need to have some sort of a vertical that’s complimentary. But for example, there’s this company that works with ShipBob called Kenny Flowers, which is an apparel company. They make these Hawaiian shirts kind of in the theme of Kenny powers the character from the baseball show in HBO. And they have a very good business. They do a lot of shipments per month in ordinary times. But when apparel dropped off, what did they do? They took that same design in that same style. They knew that they had a really core group of enthusiasts for what they put out there and they started making masks and they’ve been able to sustain and go above and beyond during this time where normally their business may have taken a little bit of a ding, but now they’re selling masks and they’re sustaining. So product diversification, I’ve been very impressed with the merchants that have been able to take their day to day vertical and expand on that to have a product that’s more relevant to the times and the situation that where we’re presently in.
• J: That’s great. Yeah man, the questions are coming in faster and quicker, so I’m trying to sort through them as well, yeah. So I guess one question I have for you and then we’ll just basically get into the Q&A for the last few minutes we have here. What do you think, over the next six months, what’s gonna be really crucial do you think to long term growth for these eCommerce brands?
• G: I think all businesses, and I’ve read this in a couple of business books that I’ve read over the years and what I’ve seen personally in six years in the logistic space. The businesses that are able to curve out a fanatical base of followers who just love that brand, love talking about their brand, talking about that brand will do anything to support that brand because they see themselves in that brand or they love the founder’s story or they love the content that’s being pushed out. Emphasizing that base and kind of circling the wagons to make sure that that base is strong because those are the people that are gonna forward the emails of promotional campaigns. And they’re gonna buy at all times and they’re gonna be the ones that tell other people about your product and get them excited as they are about the product that you’re selling or about the brand that you’re building. So I think the key to the success is shoring up that core, making sure that you’re still delivering on that value that they have absolutely fallen in love with about your business.
• J: That’s a great point. Okay, so I’m gonna run down some of these questions we have. Do you have about 10 more minutes you can spend with us today? Okay, Awesome. Okay, so question here from Nick. Nicholas, do you think the consumer spending will dramatically go down over the next six months? And if so, does that spending go down for in-person purchases but increase for online or do you think it will go down across the board because of the high unemployment numbers?
• G: Great question. I honestly wish I had an answer to it. My personal view is that it’s, I mean I just read something that here in California and here in Los Angeles, 50% of the people are now unemployed in the city of Los Angeles. I don’t know how this is gonna shake out. I feel like, naturally I tend to be an optimist and I think we’re gonna come back and we’re gonna come back strong and we’re gonna find solutions to people to live in a world in which there’s this lingering potential of getting sick and it being a serious problem in people’s lives. But I think the… Before this all happened, we had what seemingly was a strong economy. The contraction is really scary and what really scares me is the domino effect. Like person doesn’t pay the rent because they don’t need to pay the rent then the landlord doesn’t pay the bank and vice versa. And the domino just keeps tipping where everybody’s kinda passing the buck. That terrifies me. But I tend to be optimistic and think that we’re gonna be okay. I don’t know about the specifics, whether spending levels will go back to what they were in February, in January, in 2019. But I’m hopeful and optimistic that people will slowly start to get back on their feet, that the underlying fundamentals of our economy were strong before this. And that the contraction that we’re seeing right now is not gonna be to fade. It’s not gonna be so traumatic that we’re not able to recover and get back to some semblance of what it was like before this. But the honest answer, candidate answer is I don’t really know.
• J: Yeah, I think we’re all wondering and don’t really know and I think we’ll find out together. But I do agree with you based on what I’m seeing, the core tenants of our economy are good. It’s just a pause and we really the faster we can get through the health issues, the quicker we’ll get our economy restarted. So, yeah and in the meantime, being an e-comm is not a bad play. People are still buying as we’re seeing as trends are showing you, right. The site you guys have. So we’re seeing that with our client base too so.
• G: I agree and yeah.
• J: Next question here is, what advice would you give the folks who ran into stock issues recently? And you’ve already talked about this a little bit, but the second part was how do you think they can be better prepared? I think having that continuity we talked about, but what advice would you give folks who find themselves in that situation right now. They already have stock issues.
• G: Where they’re unable to get products delivered to them. Yeah, we have merchants that I’ve talked to personally that are experiencing that. There’s no easy answer to it. I think that having stronger relationships with and fretting or candid relationships with your suppliers is about the best thing that you can do. So that if what I’ve seen a couple of times in the last couple of days actually is people expecting inventory to arrive from another country. But they’re basically getting the runaround. They’re saying, Oh yeah, it’s on the way and it’s not arriving. And they’re basically getting lied to. So the stronger the relationships you have with your suppliers, the stronger relationships you have with the different components of your supply chain. I think I’ll always work to your advantage. Doesn’t always work out that way, especially when you’re starting out then you may not be a big part of your partners revenue base. But as you continually reorder business and you grow the business, getting closer with those different components into your supply chain in establishing a relationship is super important. And I don’t have any answers for like what to do if your inventory is stuck right now and you’re waiting to sell product accept that communicate to your customer. It’s likely that you have orders that people have placed and just let them know what’s going on. I think most people right now would be pretty understanding if you said, hey, we were expecting these masks to be here last Wednesday or Thursday, they still haven’t arrived. And then offer a little something as a consolation, maybe like 50% off or 20% off next order, but be like, thank you for your patience. Let them know that you appreciate it their willingness to stick with you.
• J: Yeah, that’s great.
• G: People know what’s going on, so they should be understanding God.
• J: Yeah, for sure. And we actually have a great insight article up on our site we wrote a few weeks ago. It’s all about how to deal with how to stock items. So, I don’t know who asked that question came up as anonymous, but I definitely recommend going and looking at the good.com/insights, or just click insights up in the nav. And then you get that article.
• G: I’m definitely gonna read that. Can you talk a little bit about that? I’d love to know like what some of–
• J: Yeah, so there’s, look, there’s a bunch of different things that brands could be doing but right now making it feel like an exclusive, that they’re on a waiting list that they’ve joined some type of exclusivity around getting the product when it comes back in. This is also a great opportunity to find alternate ways to communicate with your customers. So take a phone number and text them when the product comes in so they’re first to know and now you’ve got a new communication channel that you could use for instance right. There’s a lot of great texting tools out there right now I know privy just came out with one not too long ago that’s pretty good and very inexpensive. So there’s a lot of means out there to do that. I think having people sign up to be notified. I think having if there is a delay, throwing something extra in, as you mentioned, a discount. We typically just in conversion optimization, the last place I always wanna go is discounting. But I think it’s possible a lot of brands do it, but I would think adding an incentive around, hey, when it does come in, I’ll overnight ship it to you or a two day ship it to you. If I can something of that sort to get it to me even quicker to know you’re doing what you can. There’s also options around, throwing in a gift, those purchase. So what does that small little item that you do have tons of stock on that you could include that maybe as a nice little benefit for them. So there’s a lot of extra stuff like that and I think like when they fulfill through ShipBob, one thing you could do is just add that note on the shipping package to say thank you so much for your patience. Really appreciate you as a customer. I know we all trying to be a little more understanding, but know that this purchase is valuable to us and I appreciate that communication. As you said is going to be key here, but there’s a lot of things that could be done to set expectations appropriately and then let people have notification channels. And also just making it easy for them to get in line. One thing we’ve seen be really successful is place a pre-order and then you can cancel that order anytime between now and then. So now when it ships, so what I mean by that is if there is uncertainty, you’re not sure if you’re gonna lose your job or whatever else might be going on right now. Go ahead and place the order and you can cancel it anytime before it ships, no problem.
• G: That’s a great idea.
• J: Yeah, and you’re just taking the risk out of it for people. I think that’s what the biggest concern is, is there’s inherent risk in ordering out-of-stock product cause you don’t know when you’re gonna get it in theory right. Even if you try to set some expectations there. And look, we’re all in uncertain times. We don’t know what position we’re gonna be in as a family personally, et cetera. By the time that product does come in stock. So, what might change. So eliminating all of those concerns is great things to do from here.
• G: I love that thank you for that, Jon. All wonderful points. I love the personalization angle of it too.
• J: Mm-hmm yeah, for sure. Here’s a great question. I think is really helpful. What stage is an econ brand growth? Does it make sense to move to the third party? Logistics service like ShipBob?
• G: Yeah, so great question. I don’t think that there’s a specific like template or a specific time to move in a merchant’s journey. However, when you get to a certain threshold in which you’re spending more time fulfilling orders, that would be more valuable focusing on things like product development and marketing and other aspects of your business that really move the needle, is the time that you need to start outsourcing fulfillment or at least looking for a partner down the road. Historically, I’ve seen that, at around 200 shipments per month or something like that, depending on what you’re shipping, if you’re just taking product and dropping it in a poly mailer, you can probably wait out until you’re like at 300, 400. But time is the most valuable resource any entrepreneur has. And if you think spending three or four hours in the back room packaging and labeling and printing out labels is worth your time then you’re not ready to outsource. But if you are find yourself in that back room and you’re like, man, I really wanna get to those customer emails or do that webinar, then it’s time to start outsourcing.
• J: That’s a great point. I think looking at this as a return on your investment is likely going to be the best way to handle that right. What else could you be doing with your time if you were able to invest your time elsewhere instead of packaging up and applying labels, printing, all of that, right. So great point there. Okay, couple more questions cause I know we only have you for a few more minutes. Amazon tested a interesting model allowing advertisers to brand boxes and packaging and offering discounted shipping to their merchants. Do you see this trend coming in larger force?
• G: Yeah.
• J: I know many merchants would allow their branding to take a backseat for cheaper packaging Interesting.
• G: Yeah, it is an interesting question. I actually didn’t know about that program but definitely going to read into it afterwards. Cause Amazon’s always been about Amazon boxes, Amazon branding, you’re selling through our marketplace, but it’s our customer, not your customer, which has always been my problem with Amazon.
• J: Right, you don’t own the data as we talked about earlier, right.
• G: And the data, exactly. Yeah I definitely see that as a trend emerging. I mean it’s something that we’ve always been very big proponent of is giving a platform for merchants to express themselves to their customers. And I think the brands of the future are going to have a really strong core and a really strong following and are going to be battling over, who can create, when you get that package, there’s already this excitement. I can’t wait to open these new sneakers or whatever. And like creating an experience that’s so memorable that there’s no other one, no one else that you want your merchant, your customer to ever order from because they were so addicted to that cool experience that you’re giving them when they get their product.
• J: Yeah, that’s great. Okay, and last question here, if anybody else has any other questions, we have a couple more minutes. Go ahead and put them in the Q&A. But the last question I see here is, has ShipBob thought about using peer-to-peer spaces instead of leased or owned warehouses?
• G: Yeah.
• J: It’s a very specific question but.
• G: Yeah, it’s interesting. I wouldn’t necessarily call them peer to peer, but dynamic warehousing in the past specifically during Q4 peak season where some of the slower moving skews we might move to an offsite location. And then fulfill from there or take extra inventory out of the fulfillment center because we have such an influx of goods in Q4 we have not really looked at peer to peer. Part of the problem is that it’s way want to be absolutely sticking to our guns on the SLAs and when it’s your team and your managers and your processes under one roof, it’s a lot easier to do and scale that and measure that and improve upon that versus utilizing a peer to peer warehousing system. It’s an intriguing idea, and it’s something worth looking into and see how that space has evolved. But we’ve used extra warehousing space that other companies and other startups were using but never, not from a fulfillment aspect. That always happens either through our team or one of our proxies in the fulfillment center.
• J: Yeah, I mean that’s a, it’s a brand promise to get that product out in two days that a brand has made. And so if you guys can’t help them fulfill that because of a pure situation, then it kind of hurts that brand, right. So I think protecting that is probably more important in what you’re thinking about at this point, I would imagine.
• G: Yup, I agree with that.
• J: Awesome, so just thank you so much for your time. I really appreciate it. Do you have any, anything we didn’t cover today that you were hoping to get out there working obviously shipbob.com, trends.shipbob.com. Anything else that we didn’t cover you wanted to make sure people knew about?
• G: Not really I mean, I think it’s a tough time for everybody. I think calling up people, other merchants, maybe an agency partner that you used in the past and having a conversation and just find out what they’re seeing from their perspective is incredibly valuable, I’ve seen it. I’ve done it personally where maybe I haven’t talked to a partner in six months or since summer or IRCE last year, but I’m just calling them up and having a conversation talking about what we’re seeing from our unique perspectives. And that’s created a lot of insight and a lot of value into this time to kind of puzzle together piece together that puzzle of what the heck is going on. So I urge people to kind of do that and reach out and talk to people, participate in the operator’s web series that Nick Carter is running over at ShipBob along with Casey Armstrong. Take advantage of the content that you have done at the good. And I know you some of the things that you’ve done with partners as well. Just absorb information, talk to people and be open to hearing their perspectives I think is super important right now.
• J: That’s great. Well, I’ll miss hanging out with you at IRCE this year since they’re not doing it. I was supposed to speak there as well. I’m sure Casey was or you were, but yeah, so, well hopefully in 2021 we’ll be able to make that happen. But I know that Nick and I have been having a lot of conversations about getting me out to Chicago to chat with your team there. So, I look forward to doing that at some point in the near future.
• G: We will do that and I still need to visit Portland. There’s three great American cities that I’ve never visited. It’s Portland, Nashville and Boston, so I need to make my way out to Portland to so.
• J: Yeah, you’re welcome anytime I will introduce you to the craft beer scene and all the great wine we have. So, awesome George, thank you again so much for your time. I really appreciate it. To everybody listening, we will have the recording of this up on the site probably in the next day or so. And we’ll make sure we get a follow up email out with that link. If you have any questions, George how can they get ahold of you? Is there a best way, Twitter, something of that sort or email with what works best for you?
• G: Yeah, I don’t really have a social media, but simply george@shipbob.com is my email address and you can hit me up there or on LinkedIn and I’d be glad to talk. And like we just talked about a couple minutes ago, which just talked to kind of hear each other’s perspectives and what we’re going through. I’m open to that, so feel free to reach out george@shipbob.com.