#14 Casey Armstrong: When is the right time to outsource fulfilment for your ecommerce brand? (ft. Shipbob)
Find us: Head to our community page to register & join the MindfulCommerce community as an expert, brand or merchantInstagram: @mindfulcommerceFacebook @MindfulCommerceContact Us - info@mindfulcommerce.ioWhere to find One Circular World: Shipbob - Website Where to find Casey Armstrong:Casey Armstrong - Email: carmstrong@shipbob.com Links Mentioned in Episode: Pachamanoissue Shownotes: Krissie Leyland 0:00 Hello, and welcome to the MindfulCommerce Podcast, a place where we talk to ecommerce brands and service providers and developers who care about protecting our planet. I'm Krissie Rich Bunker 0:11 I'm Rich, and we're your hosts. This podcast is an extension of the MindfulCommerce Community. Krissie Leyland 0:18 The MindfulCommerce Community is a safe place for ecommerce brands and experts to connect, collaborate and explore opportunities to work together to unleash the power of ecommerce as a force for good. Rich Bunker 0:30 You can join by going to mindfulcommerce.io, and clicking "community". See you there. Krissie Leyland 0:35 Hello, everyone. Today, we'll be speaking to Casey, who is the CMO of Shipbob. We will be discussing when if ever is the right time to outsource warehousing and fulfillment for your ecommerce brand. So welcome Casey, it's really great to have you on here. I've wanted to for ages because you are one of our very first community supporters. So thank you so much for that. Would you like to just introduce yourself and tell me a bit about shipbob? And why Shipbob exists? Casey Armstrong 1:09 Yes. Well, thank you very much for having me. You know, we're very happy to be part of the MindfulCommerce Community. We take the carbon neutrality and everything very seriously over here at Shipbob, which I know we're gonna dive into. We are a global fulfillment platform. We serve and are partnered with over 5000 brands. We ship millions of items every single month. We actually are up to almost 25 fulfillment centers, including one in the UK, one in Canada, one in Ireland, one in Australia, which we just announced last week, and about 20 in the US. So, I'm very happy to be here. Krissie Leyland 1:51 Wow, that's amazing. That's a lot. I was actually gonna ask you how many fulfillment centers you have but you just answered that question. It's great that you've got one in the UK. So in your opinion, when is the right time for brands to outsource their warehousing and fulfillment to companies such as Shipbob? Casey Armstrong 2:13 There's no hard answer where it's like, "once you're doing 100 orders a month." I think it's when you start seeing that the time it takes you to fulfill,and ship items starts to impact the time that you have to focus on sales, marketing, community development & product development, because that's what's actually going to drive your business. I know a lot of entrepreneurs are kind of hesitant to like hand things over. Unless logistics and operations is your differentiator from your competition... I think it behooves a lot of founders to hand that off sooner than not so they can focus on the right things, logistics, and fulfillments, very time intensive, which is often your most valuable asset. If you're staying up till eight o'clock at night, midnight, 2am, during peak season to pick and pack boxes, it's probably not the best use of your time. Krissie Leyland 3:18 There are brands doing that. Casey Armstrong 3:20 Oh, we hear that all the time. It's honestly the catalyst for [almost all of our customers] to reach out to and start working with us rather quickly. They start seeing the time that they're spending on it. Sometimes, even worse is subconsciously, they're purposely thwarting their own growth: "I want to double my sales. I want to double my business but that means I'm gonna have to ship twice as many items. I don't want to stay up for an extra two hours or four hours every single day to pick and pack boxes." Then if you're gonna start hiring people, why wouldn't you hire more people maybe for marketing or product development, or somebody to help on the entire supply chain versus just packing boxes? So it's something that we hear rather often. Krissie Leyland 4:14 Yeah. I mean, that's definitely not why they would have started their business. The first thing that came to my head then was like thinking of when they reach that specific moment, they might also be thinking about internationalization. So do you help brands with going global, because you have these big fulfillment centers around the world and what does that look like? Casey Armstrong 4:41 We don't handle the freight, per se, but we have partners that can help with that (with duties, taxes and everything like that). We can also ship globally, just from the United States. Something that we do with the majority of our customers, is we do what's called a "time in transit analysis". We'll help you understand what is the best and most effective way to distribute your inventory, whether that be just in the United States or whether that be globally. It's all based off of your historical data on where your customers are purchasing from. We definitely help with that. Then within Shipbob as well, there's our analytics reporting tool which updates in real time. There you can start toggling on and off different fulfillment centers to start seeing what type of cost and time saving you'd actually have by you know, let's say distributing some of your inventory overseas. Krissie Leyland 5:32 I'm also thinking of, if they do see... for example, if they're in the US, but a lot of their customers are in Europe. It might make sense to have a fulfillment center in Europe. It might be about cost, but if you're shipping at a less of a distance, then it's probably better in terms of your emissions and your carbon footprint. Casey Armstrong 6:02 Yes, it's much better for the environment. Then also, sometimes there's marketing arbitrage opportunities overseas, where maybe that type of product, or just in general, some of the customer acquisition costs might be lower. You might say, "Well, I don't have a lot of sales in this region" but maybe that's because you're focusing all of your paid efforts in the United States, but there could be opportunities in the UK, across Europe, or somewhere like Australia. So obviously, once your inventory is there, there's less impact on the environment. It's also faster and more inexpensive. Sometimes you can even test it by marketing in those regions, before you start to distribute inventory. Just to see what type of opportunities are there, both from a demand side, but also the costs. Krissie Leyland 6:51 Definitely. On the subject of cost... it might be a good question to ask: On average, how much are brands spending with Shipbob in terms of just handing over their fulfillment to you? Casey Armstrong 7:09 There isn't a hard dollar number or pound, but what I'll give is a percentage. At Shipbob, we do the receiving, we store your inventory and then we do all of the fulfillment. So, the pick pack, the packaging & the actual shipping label. What we typically see is that it often ranges between about 8-15% of your of your total sales goes towards again, all things included within fulfillment, including the shipping label. Krissie Leyland 7:47 Awesome. That's not that's not too bad. I was expecting more to be honest. Casey Armstrong 7:51 It can go up at times. Again, it depends on how efficient brands are with their inventory: both the amount that they that they order & keep on hand, how quickly they can replenish it, and also how quickly they can sell it. I'd say typically, it's in that range. Krissie Leyland 8:12 Do you help with knowing how much stock to bring in? So for example, you know, if they've run out of something... you mentioned that analytics part. Do you help with brands knowing "Oh, I need to order this much of this product"? Casey Armstrong 8:30 Definitely. Yes, we do. You can start creating notification rules within Shipbob when you're getting low on certain inventory. We're going to continue to invest heavily there to help our customers be smarter through technology. We also have some partners that help with inventory tracking, inventory, planning, order replenishment, and pushing that back up to their manufacturers as well. Krissie Leyland 9:01 That's really good. I can see that saving a lot of time and money as well. You know, knowing where to spend your budget, and what what's selling more than other products, etc. That's cool. Let's get on to the exciting bit. So how did you become carbon neutral? Casey Armstrong 9:22 This was something that we'd been talking about internally for a while. As we thought about it as a company, businesses and businesses like Shipbob need to lead, not just follow. We were actually talking about this with some of our partners a couple weeks ago where consumers are pulling and governments at times will push but the businesses have a responsibility to be ahead of the curve, and do what's right long term. So we need to put our money where our mouth is and lead by example. We can't solely look to, let's say, policymakers or some macro level decisions to force us to do what we actually should be doing. And as we get bigger, there's an additional responsibility for us as well. A couple years ago, we were obviously much smaller. We only had locations in the United States but we've become this global platform. We work with 1000s of brands, soon to be 10s of 1000s of brands, so we need to lead by example. What's important there is that similarly sized companies or smaller companies, and maybe sometimes even larger companies, will hopefully, see what companies like us are doing and then proceed accordingly as well. It's something that we were really excited about and we felt it was our responsibility as somebody who's a global player in the space, and especially such
