Is There a Missing Software Category in the Fulfillment Space?
Most growth-stage DTC companies that have crossed $25 million in DTC sales are constantly in the market for something to help them solve their fulfillment challenges. What are the top concerns I'm hearing constantly?
Quite simply, they outgrow spreadsheets + their label printing app connected to eCommerce. They want to keep their eCommerce solution, but the rest is hot garbage when they hit this level.
I find it starts in the 10,000 parcels per month range and continues until they get to about 100,000 parcels per month.
What are some of the challenges they have?
* You have at least one warehouse lease, so there's that.
You can't get out of it, and so you need something that will improve you from where you are now, and doesn't involve just handing over the keys to someone.
* Scaling Labor. It starts with recruitment and retention, but goes well beyond this. They need a new process and facility layout. Then they need technology and people training to support that process.
* Outsourcing Only Not Enough. Been there, done that, got the T-Shirt.
When you cross about 500 parcels a month, it seems like outsourcing to a local 3PL solves all your problems. You can deliver the brand experience you want, at scale.
Right up until you become their biggest DTC customer. Then you are teaching them.
Outsourcing to a global 3PL doesn't help either. You gain scale but lose your uniqueness. What happened to that magic brand experience you created in unboxing?
Sorry that you will cost you quite a bit extra, and we can't scale that in all our facilities.
* Software Needs Upgrade.
Of course you need a WMS, but the options seem limited. 6-9 month implementation, 6 figure capital commitments, AND high implementation failure rates? Sorry, no thank you.
Sadly, this has been the state of the industry.
I do tend to think there is a whole category of solutions out there which has these options:
* Use your current facility, or use ours. We don't care. Do both!
* Use our software, but integrate with your current software. Don't rip and replace.
* Outsource when you need to, but it's not required.
* Better rates and carrier choices (duh)
* Process and technology advice that's proven.
* Supports the markets, channels, you want
* Supports the brand unboxing experience you want (key feature Amazon is and other global 3PLs are missing for example)
Strangely, we have these categories today:
* Traditional 3PL
* "Tech-Enabled 3PL" (Whatever this means -- it's not like a normal 3PL doesn't use technology. Usually this means "not just EDI" lol)
* 4PL: Man in the middle. Reasonable connector but going to improve your operations? Mostly no.
* Order Management Systems
* Warehouse Management Systems
* Fulfillment Consultants
Is there something missing here?
