Why Packaging Matters with Phillip Akhzar

You can listen to the full podcast here. 

Joe:

Hello friends! Welcome to The Logistics of Logistics Podcast. My name is Joe Lynch, thank you so much for joining us today on The Logistics of Logistics.

I interview experts from Transportation, Logistics, Warehousing and Fulfillment, the technology guys, the supply chain guys, and a million specialized services. I have two goals for every one of my podcasts, my goal is for my audience to learn something - I want the listeners to be able to say “I learned something,” so I ask real basic questions, I assume not all of us are technologists, I assume not all of us know about all these spaces. Secondly, my goal is for my expert that I interview to come off well. I want you to see and hear someone who is at their best. I want them to be able to tell their story, share their expertise, and hopefully gain some favorable attention. Who knows, maybe even win some business.

 Today’s topic is “Why Packaging Matters” with my friend Phillip Akhzar. I met Phillip at the Manifest Conference in Vegas in late January-early February. Great guy. Very interesting story about him and his business, so stick around. I know some of you are saying, I don’t care about packaging, I’m a logistics guy, or I’m a transportation guy. Packaging matters! And if you stick around you’ll learn why. It really is the building block of logistics and transportation. It’s a good way to save money and improve on a lot of things that can go wrong with our shipments. Take a listen, Phillip is a very interesting guy and I think you’re going to learn something. 

Before we get to Phillip, I want to tell you about my friends over at Tusk Logistics, that’s tusklogistics.com. What they do at Tusk is they are a small parcel shipping network. They can save you 40%. E-commerce guys, warehouse guys, if you do a lot of small parcel shipping, you’re using UPS, FedEx, USPS, Tusk can save you 40% on your small parcel shipping. The way they have done that is at Tusk, they put together a network of regional small parcel players. These are companies already established in the market, already do a good job in their region, and Tusk has tied them together with some top technology so you get really good service, probably better than you get with the big guys. You also save 40% and you’ll get world class technology. It’s a can’t lose scenario. If you’re an E-commerce guy, if you’re a warehouse guy, check them out at tusklogistics.com, right at the top it says “Get Started.” Check them out!

 So, how’s it going Phillip?

The Importance of Custom and Eco-Friendly Packaging

Phillip:

Hey Joe. It’s going great, how are you?

Joe:
I’m doing great, I’m excited to talk to you about this topic. Please introduce yourself and your company and where you’re calling from today.

Phillip:

Absolutely! My name is Phillip Akhzar and I am the founder and CEO of Arka, based in Austin, Texas. Arka helps 3PLs auto replenish packaging when they need it.

Joe:
Interesting! What do you mean by “auto replenish packaging when they need it”?

 Phillip:
We’ve built an API that will connect to any warehouse management system, any WMS with just one click. We’ll listen to that data and when warehouse is getting low and the packages they use to ship products out on behalf of their merchants, we’ll send them a message saying, “hey, you’re running low,” or we’ll send them a PO. Their warehouse management system will automatically update with a ship notice or a WRO or ASN. On their end they’ll see they’re running low because warehouse receiving just got notified that we’ve got 6 pallets of a 10x8x4 craft RSC coming in and that’s awesome! No need to walk the warehouse floor, no need to flip through a catalog or pick up the phone to order more packages or update your WMS. We automate the entire thing.

Joe:

Interesting, I want to cover a few terms you use. API is the glue that connects you to the next system, so what system do you connect to?

 Phillip:

Specifically, we’ll be connecting to their warehouse management system, depending on what they use, like they use a ShipHero or a Whiplash or a Deposco-

Joe:

Deposco has been on my podcast many times. So it could be any of those guys.

Phillip:
Correct.

Joe:
So you connect to that system with an API. What do you do when you get that data?

Phillip:

When we get that data we’ll do something called catalog mapping where we have pretty much any packaging under the sun that’s listed in our catalog, we’ll map it to the packages that they use at their warehouse. Those are typically tied to some sort of SKU by way of an automation rule, on their own. This has nothing to do with us, this is just how warehouses work. They’ll be able to connect product, meaning whatever SKU they have, to a package to get sent out the door. We’ll just pair those with what we’re offering to make sure we’re using the same language. Because “brown box” to one person might mean something else to another person. We just make sure that those are all completely matched and once they hit below a certain threshold, say you’ve got 1000 boxes that are 10x8x4, when they hit 200 we’ll send them another 1000 boxes. That’s essentially how it works.

Joe:
When you talk about packaging, you mean the boxes we send stuff in. Are you normally selling to shippers, like the electronics company, or are you selling to 3PLs?

Phillip:
We sell to both in the sense that a 3PLs work with many shippers and many merchants. They’ll be able to grant permission on supplying that packaging to a number of merchants and a number of shippers. In that same light, any merchant can just go to Arka.com, select a package, brand it with their logo, and check out. They can connect us with their 3PL if they want it to be autoreplenished. It depends on the use case at hand. We like to go after 3PLs so we can service their entire suite of merchants they’re working with.

Joe:
Before we hit record, I asked you: A lot of logistics and supply chain people listen to my podcast. If you’re a shipper, you’re always worried about boxes, right? But a lot of transportation logistics guys say “I don’t care.” They put that box on a pallet and move it and I asked you why we should care. You said, have you ever received something in e-commerce and opened the box, and it’s a huge box- way bigger than it needed to be- and you said that that is the problem. So, elaborate.

Phillip:

Absolutely. That can happen for a number of reasons. One of those reasons might be that you’re a merchant and your product is at a warehouse and they’re fulfilling on your behalf. Fulfilling meaning pick, pack, and ship. They send it on your behalf to your customers. If they run out of a set size of packages that they use for everybody - I’m just talking plain brown boxes at a warehouse - I’m talking to 3PLs now, so listen up: if you’re using a suite of 10-15 box sizes that you have at your warehouse that you fulfill for all your merchants, you might run out of one and you’ll be forced to put product in a box that is a size or two bigger - whatever is available - that’s what’s left to do. You won’t have a choice and this is going to have negative rippling effects across your supply chain. You’re paying more for that box, you’re paying more to ship that box because of the volumetric weight, there’s not going to be as much customer satisfaction- they’ll open it and say “what is this? Why is there a ton of trash in this package stuffed around my tiny product?”   You’re going to fit less on the back of your truck, your freight is not going to be optimal, and your carbon footprint. This is not the message you want to be sending to the folks that will be working with you, to the folks who will be partnering with you, the folks who want to be using your services. If you want to be able to save not only on that space, you want to be able to spend less when you are getting products out the door, we should totally talk. This is something we care about and is actually something we obsess over.

Joe:
Yep, by the way, before we hit record we were talking and one of the things I said is I’m from automotive originally. Automotive spends virtually less on logistics and transportation as a percentage of revenue because they have a lot of packaging engineers. They really go through, and they also have enormous volume, but when they load a truck, they know that we put as many of those components as we could on that truck. They’ve designed it not only for the manufacturing, and for the end user and the tooling, but they’ve also considered how this will pack into a truck. We have to worry about the packaging to make sure I’m not having too big of a box. If you think about it, I’m sending hundreds and hundreds of truckloads a month of that product. Let’s say that all my boxes were 10% too big, or 5% too big, now all of a sudden I’m in a jam. If you’re a transportation and logistics guy and you’re constantly being called out onto the carpet to save us money, save us money, save us money- walk through the warehouse. Walk though the assembly plants and see what’s going on. If you find out that we’re using really big boxes for small stuff sometimes– by the way, I’m going to hit on one other thing: inventory. If you’ve got ten different boxes and you’re trying to order them without a tool, without a process, without a technology, you’re going to have a lot of boxes just sitting there on your shelves gathering dust and cost of inventory starts to add up.

Phillip:
Absolutely. Not only are you paying for that space on the warehouse floor, but recently I was talking to a 3PL company, I was talking to this company called Bulu Box and they were talking about some of the 3PLs they work with- sometimes they’re paying for space on the truck! Sometimes they’ll just park the truck outside the warehouse, $500 a month you’re paying for that! Forget about just the square footage of the pallets that are just sitting there. If you’re not getting stuff off the floor, then it’s just paying rent to sit there.

Joe:
By the way, one of the first times I went through just a warehouse, I shouldn’t say “just” a warehouse, but one my first times someone said to me, are you familiar with how warehouses work and I said “sorta.” Our main job is to take things out of big boxes here, put them into smaller boxes here, seal it up and ship it. He said, that’s the majority of our work. I said, that doesn’t sound so hard. He said, it doesn’t sound so hard, but if you don’t have the right sized box, if you don’t have the right mailing, if you don’t put the right address on, and we’ve gotten really good at this, and you said this right before I hit record, that is the customer experience. If I buy something at a store, they go out of their way to greet me, serve me, and ideally build a little relationship with me as I am buying something. If I’m buying something via e-commerce, it comes in a box. If it comes in a box that is way too big then my first thought is that these guys don’t care about the environment. Not all of us want to, I mean I have to throw that box into my garage, it’s huge and there’s no reason for it to be that huge. If it seems like this is a shabby box that it came in, my customer experience is different.

Phillip:
Absolutely. Plus, you won’t want to share it. If I can just speak to the shippers for a second, you’re sending a message whether there’s messaging on the package or not when you send the package with the product inside that you sold to your customer. Nobody is going to be sharing the unboxing experience of something that looks shabby. That’s just the shallow truth. So make sure whatever you are sending to your customers is inline with your ethos! That’s an opportunity. One things that folks don’t do, is they don’t look at packaging as marketing spin, they look at it as logistics and shipping spend, but it’s marketing spend. You can put whatever you want on that package, you don’t have any restrictions in that respect. Whether you want to put some sort of promo on there, whether you want to sample product on there, whether you want it to go to your socials, whether you want it to automatically share, whether you want to tell the story of your company–whatever it is, that’s a missed opportunity if you’re not going after it and looking at it as marketing spend. So for a few cents more to change that when you’re looking at cost of customer acquisition when you’re spending thousands of dollars on social and google, why not take the extra step on something that has 100% unpacking rate and that’s the package.

Joe:

You know it’s interesting that you hit on that. I know we’re developing more and more of a science around this stuff… ever open up a box and it has a whole bunch of flyers to sell you more stuff. Some of it you go, this is nice and glossy, you can tell someone spent money on it, but you don’t want it either, so you’re like, I guess I should just throw this out with the box. It always feels like to me, why did you give me this? Why did you put me in this weird position? Now, if I wanted it, I wanted it. If I say I want to buy from these guys, I want to buy more of this, this is valuable. If it doesn’t feel valuable to me - which by the way is the majority - it just feels like you’ve delivered more garbage to my house and I don’t want it. So yes, we really need to think about this and that if you’re a transportation guy, if you’re a logistics guy, you may think “this isn’t my problem!” But it is our problem because we’re an end-to-end business now and if you’re customer wants to save money, we’ll do everything we can to negotiate good rates with good carriers. We’ll do this, we’ll do that, go a little upstream and find out if they’re not wasting some money on the warehouse stuff. By the way I’m always a big believer in relationships that allow you to have that conversation. Not just have a cheap truck.

Phillip:

Relationships are so important in our space because it’s a massive industry but it’s a very small world.

Joe:
But the problem is always upstream. That’s why we have to have relationships. I met Phillip at Manifest. We had a good talk there and we were talking before I hit record and Manifest was a blast - a blur! - but a blast. You had some interesting insights, what did you think about Manifest?

Phillip:

I thought it was great! It was probably one of the best conducive to collaboration working conferences that I’ve been to. I liked that there were breakout groups, that there were opportunities to connect with people. It didn’t feel clique-y, it didn’t feel like we were in someone’s reunion, where some of these do feel like that. Don’t get me wrong, I felt great about reunited with people I hadn’t seen in awhile, but it wasn’t just about that. There were so many new people that I met.

Joe:
I felt like I was - and I really enjoyed it, I did some interviews there - I felt like I was always thrown into another group of people that opened my eyes to some things. I spend a lot of time with shippers and I know they’re going to be even more shippers next year, it’s a bit focus for next year. I really enjoyed the time. So, Phillip, tell us a little bit about you. Where did you grow up? Where did you go to school? Give us some career highlights from before you started this company. I want to understand why did you start this company? What hole did you see in the market? 

Phillip:

You asked for it, so I’ll start from the top. Born in San Francisco. I’m first generation, my folks emigrated from the Middle East in the ‘70’s. I was born in San Francisco and raised in the Bay area, Marin County. I went to Cal Poly San Luis Obispo where I studied industrial engineering- industrial manufacturing engineering. That was great, so sustainability was a part of my vocabulary, not even by choice, very early on in my career. It was great, I think it’s paid off ever since. I cut my teeth at Boeing Aerospace in Seattle where I worked in the casting offices and commercial aviation services. That was wonderful, but it was also not what I wanted to do. I wanted to have higher impact in a smaller company that I could scale, so I worked for a smaller YC back startup called AtCracked and exited several years later. I ended up going through Y-Comb myself–

Joe:
For those who don’t know what Y-Combinator is, please explain that. Its been awhile since someone from Y-Combinator has been on my podcast, at least two months.

Phillip:

Y-Combinator, otherwise known as YC, is a premier accelerator program that unbrainwashes you from the typical business insights you might be getting from the right or wrong places. I think it’s an excellent alternative to a MBA. You’re given a small amount of seed money to get your idea off the ground or to keep the momentum and traction going. Companies like AirBnB and Stripe and Dropbox have come out of it. It happens in Silicon Valley and is a 3 month program. You work closely with advisors who are entrepreneurs that have worked in the space to help you and guide you to get things in place. It was wonderful. It was one of the best experiences I’ve ever had.

Joe:
You had to apply to get in that. I think it’s got a 1% acceptance rate–

Phillip:

Like a 0.01%, it’s ridiculous. It’s harder to get into than Harvard and I didn’t get into Harvard.

Joe:
So that is telling. They also invest in the companies that they take through their accelerator so when you come out the other side, you have a little more credibility that the average start up wouldn’t have.

Phillip:
You do, you absolutely do. From there we got our first cheque for Arka. We’re lucky enough to work with Tony Hseih. He was an early believer in the company.

Joe:
We don’t all know Tony, so who is he?

Phillip:

Tony Hseih is the founder and CEO of Zappos, which eventually got acquired by Amazon - and I would argue that Amazon holds the benchmark of what it means to give good customer service and the expectations that a customer might have to get a product that they ordered online. A lot of that came from Zappos and Tony and Tony’s team. He wrote the book Delivering Happiness which has a lot to do with customer satisfaction and what it means to send something online. I’m paraphrasing.

Joe:

Did he just pass away?

Phillip:
Yeah, I believe he passed away just over a year ago.

Joe:
It was such a weird situation, I was so sorry to hear that.

Phillip:

I have some friends who were especially close to him. I was lucky enough just to call him ‘mentor’ and see him once a year.

Joe:
Brilliant man.

Phillip:

But friends of mine who were very close to him sorely miss him. He meant a lot to the people who knew him well.

Joe:
So you started this company. What problem did you see that wasn’t being addressed? What does Arka do? Also, work in what does Arka mean, for those of us who don’t know.

Phillip:

The meaning of Arka technically means a chest to hold something precious, it’s the box that the eucharist rests in. The overall meaning is that if you yourself are the shipper, your product is like your baby and that goes inside of a box and that box or Arka holds something precious, the treasure, and that’s what we’re trusted with providing. We wanted our name to show that we mean business.

Joe:

Is that tied to the Ark of the Covenant, or …

Phillip:

It is, that’s exactly what it means. The Ark of the Covenant.

Joe:
And Noah’s Ark?

Phillip:
Technically, as well, yes. Because it holds something precious. There’s a lot of ways you can use it in that respect, but this one in particular has to do with products folks ship for their customers.

Joe:
When did you see - what problem did you see that wasn’t being addressed by the industry?

Phillip:
First it was why it was so difficult to get packaging. Therefore we built Arka.com which is a way to select a package brand new with your logo and check out. For any shippers listening, its a very easy way for your to get your packaging instead of having to google packaging providers or use the big catalog providers that can take weeks to get hear back from someone. We recognized this as a Trojan horse for something much bigger and that’s where the API comes in. The API which connects to any warehouse management system will allow 3PLs to autoreplenish their packaging. That’s the big picture because that affects shippers as well. I was lucky enough to get involved on that section of the business, which is not the predominate side of the business that we want to scale the most by connecting with two founders who have already scaled their own warehouse management systems, and that’s James Marks the founder and former CEO or Whiplash which sold to Port Logistics and then Ryder and then Nick Daniel-Richards the founder and former CTO of ShipHero. They’ve been on every keystroke of code that the API has been built and I’m super fortunate to call them advisors and close friends of the company. With them, I’ve felt absolutely unstoppable to get us to the next stage.

Joe:
Getting back to the first thing you said, which is you can help shippers - let’s just say I make mobile phone covers, because that’s the first thing I saw, I have a mobile phone cover and I say, I’m getting these from Mexico, India, or China somewhere and they come to port and I need to get these - they came in a giant box and now I have to put them into a smaller box (which is what warehousing does), what do I just give you the dimensions and say, hey look I went on your website and I found a box this size, how do I know that’s the right size?

Phillip:
We actually have an inserts page where you can put the dimensions of your product and then it will give you an optimal sized package to be able to brand, or not. Just select that package and checkout. We allow sampling. You can do one fully printed to make sure that is actually the right size. You can just get one box. If you place a larger order we’ll actually refund you that one box. It’s only $20 to get a fully branded box as a sample. From there you can buy-

Joe:
It’s like a prototype. I like that because if I paid an extra ten cents per box for some reason, that’s ten cents that I just lost, right? You might advise me, hey Joe here’s a smaller box that’d save you ten cents, that might be a lot of margin at the end of the year.

Phillip:
Absolutely. It all adds up. Packaging at the end of the day is a commodities business. We’re not trying to wave the flag that our boxes are so much cheaper than everyone else, that’s not the way to add value, that’s not the way to win. Of course, we produce packaging that is affordable, rather we source packaging that is affordable. But it really comes down to the ease of use, the peace of mind that you have being able to create something quickly, iterate prototype and then iterate again. If you’re a 3PL you’ll have one less thing to worry about is even more insane.

Joe:
One segment of your business is shippers who say I sell this phone cover and I want to go on your site and –

Phillip:
Totally self-serve.

Joe:
I get that it’s self-serve, but what if I say I need a certain amount of these every month. Do I connect to you via that API?

Phillip:
You would just connect us to your 3PL and we would connect to their API. We also have a subscribe and save function on our website if you just wanted to order how ever much you needed to order at whatever time. Remember, if you think about it, the merchant doesn’t care if they’re going to get some excess packaging sent to their warehouse. It’s the warehouse that needs to be very tight with the amount of space they use and therefore they need demand-based replenishment. They want to make sure their work-in-progress is low and high through-put and they’re making money. The three goals of the [something] book.

Joe:

When I go to that 3PL, why are you better than the average packaging company?

Phillip:
What they’re going to be doing with the average packaging company is a process of VMI, they’ll walk the warehouse floor, they count how many boxes they have, they’ll write that down somewhere–

Joe:
Before you go further, what is VMI? Vendor Manage Inventory, what does that mean?

Phillip:
Vender Manage Inventory is essentially when someone comes in and counts how many boxes you have left, at least with respect to packaging. They’ll come in and say you’ve got one pallet left and you should re-up on these packages pretty soon. But that’s it, that’s not a science, right? Whereas with us, we’re actually connecting through your WMS to understand so we can forecast this is when you need more and this is how many you should be ordering next time based on the empirical data. Instead of having someone do that at the warehouse and you need to make those calculations on the fly and then having to manually update their warehouse managing system. We do it with one click.

Joe:
It’s Vendor Manage Inventory to see it being used by the most efficient and most effective supply chain. I drink a bunch of Diet Coke and for those of you not watching, I’m holding one up. If you go over to Walmart or Kroger or Meijer, I buy a few six packs of Diet Coke. As soon as that goes through their system, Joe just bought 3 six packs, we know we’re 3 six packs closer to having to go over their and deliver more Diet Coke. At some point they’re going to get a trigger to their team “Go” deliver this many of this kind and I think in many cases Coca Cola or Pepsi or whomever it may be is actually responsible for that whole aisle where their product is being sold. We see this in action everyday, but we don’t always say it. Getting back to it, VMI for the warehouse - so you’re connecting to the warehouse managing system the same way Coke might connect to Kroger and getting signals and where you say ‘hey they’re going through 100 of these boxes a day, we need to send them some by the end of the week because they’re going to be short.’

Phillip:

Exactly.

Joe:
That helps me avoid emails, phone calls, a whole bunch of guesstimates by the purchasing team or the ops team, right?

Phillip:
Absolutely, and the time. If you look at it where it’s averaging 30 minutes per brand per month, and that 30 minutes has an hourly rate tied to it, and that hourly rate that you pay someone at the warehouse, they’re supposed to bring you back triple that amount. We make it simple. We have a ROI calculator that takes multiple things into account from the number of SKUs you have to the number of locations to how far you ship to number of shipments per day. We get all that and say we’re saving you this much. It’s really a no brainer from that point for a 3PL.

Joe:
When we looked at warehouses, warehouses are getting more and more specialized, so those warehouses are now having to do omnichannels. I might have, I meanted my phone covers, I might have this phone cover being shipped individually as ecommerce to a home, but I might also be selling some to BestBuy and some to Walmart. When I’m selling them that way,  I’m going to need different boxes and it’s always going to be difficult to figure out what I need. I need someone kind of connected to me. By the way, before we hit record I was asking you why would a VC invest in a packaging company? Because VC’s - and this is an exaggeration - hate the physical world. They only like data. And you said they invest because they like the idea of this is one more place we are digitizing the supply chain. We’re always filling up one more hole in the supply chain that’s manual, it’s not automated.

Phillip:

Exactly, especially with how it’s - nothing against VMI, but we’re replacing the process that’s older than the fax machine. So if you’re looking at something that’s been the same way for the last century, our whole thing is that, well, if it’s not broken, don’t fix it. Well, it’s very broken. The negative rippling effects that it has across the supply chain on a one-to-one basis you might say, who cares? But we’re talking about every physical product shipped. In that respect, it’s devastating. We’re excited to help fix that problem and provide some insight.

Joe:
You’re automating vendor manage inventory, so its still vendor manage inventory, it’s just automated. By the way, you can pretty much be rest assured that nobody from Coke is stoping by and counting product at any location. They’re all connected in a way that says, I suspect they don’t know this, I suspect they have a cadence where we know we have to fill up every Thursday at that location. So maybe that makes it a little easier, but we don’t all have that advantage.

Phillip:

No, not everyone has the insight of Coca Cola, that’s the thing. We’re bringing you the insight of Coca Cola whether you’re a small shipper, a big shipper, a self-fulfiller, or a big 3PL. That is something you can have at least a little peace of mind for, which is your must-have on the packaging side.

Joe:

I’m going to run out of time at the bottom of the hour I’m losing you, so tell me this- walk me through a process of how I would - starting at the warehouse - through a product of how they would work with you.

Phillip:
First things first, what WMS are you on. You login with your credentials and you get your WMS connected and from there you pull your packaging data, whatever data you may have and then we’ll do something called catalog mapping where we’ll use the packaging you’re using right now and connect them with the packages that we offer. We offer every packaging under the sun, but we need to be able to speak apples to apples, like a brown box means one thing to one person and another thing to another person. Is it an RSC, what is it?

Joe:
What’s an RSC?

Phillip:

A Rolling Slotted Carton. Which is like the same box you get from Amazon, it pops up the front. Whereas an RLF, Rolling Lock Front, is like the subscription box that opens at the very front of the box instead of top of the box, it looks like a treasure chest. Rectifying those things are important. What’s the thickness? Is it B-flute or C-flute, and that just has to do with the corrugated waves in between those pieces of paper. For those of you who are listening, just to know what that means. Once those are paired, we call it pairing, we’ll be able to identify that package when it pops up in your WMS. When it pops up in your WMS when something is shipped, we’ll not a detriment from that principal, the amount you had in the first place. If a box goes out the door, that means a box is out of the pile.

Joe:
Interesting! So basically the real value you provide is that you automated something that was traditionally not automated. In probably most locations it’s not automated-

Phillip:
I don’t know many places that are automated. Here’s the thing, I will say this, there are some places that are small and they might connect an excel sheet to Zapier and they only have 4 SKUs and they’ll be able to get a pretty good count of their packages. First of all, that’s not everybody. Second, there’s still the missing piece of having that turn into a purchase order to a packaging provider, confirmation of that purchase order, and automating an update on the WMS. That part is just not built anywhere. Nobody’s built that. That requires two sides of the table to be built. You can build from here to the other side of the country as much as you want to make sure you have good visibility at your warehouse, but the question is who is reading that? There are no packaging providers that are reading that. That’s where we come in.

Joe:

By the way I spend a lot of time doing lean and value stream mapping. When you walk through facilities, what you’re looking for all the time is, what is inventory that is sitting on the shelf. A lot of times it’s boxes. You say, that’s the box we used to use for blank and blank.

Phillip:
Used to use are the key words.

Joe:

Right. It’s got dust on it so you’re like lets just throw it out. Well, no, because you never know. There’s always that - and by the way, from my perspective, I don’t want to force my team to use a box that’s not on standard. I dont’ want that to happen because, again, at some point outside the warehouse there’s a customer experience and I don’t want that customer experience to be off. So I need to have the right boxes, and by the way the guys at ThroughPut, those guys have been on my podcasts a number of times, they tell me that 30% of what we make never gets sold, never gets to the end consumer. Think about that. That’s a ton of food that we grow that goes bad before it gets to the consumer. That’s a ton of stuff that gets built and put on a shelf in a warehouse and never gets shipped. That’s a problem. So when we talk about sustainability, we need to start talking about the inventory problems. By the way guys, inventory carrying costs are probably higher than transportation costs in most cases. We need to start looking at our supply chains and don’t just look in your own piece of the world which is over-the-road trucking or I’m a fulfillment guy, we need to start looking from order to cash, then reduce the time and take all the waste out. Before we go, your sweet spot is who?

Phillip:
3PLs if you’re doing between 35 and 50 million and then 50 million plus. If you’re a smaller 3PL, we can still chat.

Joe:
You mean warehousing 3PLs, right?

Phillip:

Warehousing. So folks who do pick, pack, and ship, if you’re shipping products under 100 pounds, we should 100% talk. If you are a direct to consumer merchant operating out of North America, we should absolutely talk.

Joe:

Nice, so I asked you this before, I warned you, I like to interview smart and interesting people like yourself, who should I have on my podcast and why?

Phillip:

Yep, so Joe Spisak, he’s the man and he’s also here in Austin, Texas, and he’s the founder of Fulfill.com. He actually connects businesses to other fulfillment centers. They are a 3PL market place for warehouse services, so if you have a 3PL you can be listed there. They will connect you to the merchants who need your services. There’s a lot out there and it’s difficult from a merchant’s point of view, who do I work with? Who do I pick? Joe’s company will make sure that you get the right pairing.

Joe:

Also, if you think about it, before ecommerce, if somebody said, where should I put my warehouse? Well, put it in Indiana. You have 65% of the population in one day and the rest in two days or so. When we talk about same day or next day, which it seems is where everyone’s moving to, I might have to have multiple locations. That’s why I always think you have to find the person with the same technology in those places. 

Phillip:

If that wasn’t the case then Amazon would’ve bought the entier state of Indiana by now.

Joe:

[laughing] Don’t tempt them! So what I’ll do is I’ll put a link to your LinkedIn profile, a link to your website, and any other links you and your marketing team give me. So what conference- I know I saw you at Manifest and I’m sure I’ll see you next February at Manifest-

Phillip:

I’ll 100% be at the next Manifest. You tell me, what’s next?

Joe:
I did hear Dr. Courtney and I don’t even know if this has been announced, but I heard that they’re doing in Las Vegas the same week just before the Superbowl. The Superbowl is on Sunday so we can all hang out and gamble, anyway, I will see you there. But what other conferences will I see you at?

Phillip:

Right now, it’s absolutely up in the air. I can send an updated list of conferences I’m going to be going to -

Joe:
Do you or your team go to all the conferences?

Phillip:

I try to go to all of them. This is the first post-seed funding so we can afford to go to a conference here or there. I did ShopTalk last year, it was wonderful except this year I’m proud to say that I’ll be in a triathlon, so I’m going to miss ShopTalk.

Joe:

Oh! Congratulations!

Phillip:

Yeah, I’m excited about it!

Joe:

How far is the regulation course?

Phillip:

So there’s the sprint course, the Olympic course, and the ironman- a mile of swim (which I just did yesterday to test my time). You have a maximum of 70 minutes in the water. I was able to do it in 45 which is actually still kind of slow. Then it’s a 26 mile bike ride and then a 6 mile run. It’s in Hawaii and it’s called the Lava Man. You run around a volcano, how’s that?

Joe:
I always call that what you just described as the standard. That’s a killer! I did one of those a long time ago but I won’t be doing them anymore. I got hit by a truck, yeah I can jog. Someone on my team said it was karmic retribution when I got hit by the truck-

Phillip:
Why, did they work for a freight forwarding company that you didn’t get on your podcast?

Joe:

It was a vehicle truck, but anyway, it was really great talking to you and I love what you’re doing. Again, I think that you’re one more place where there’s a little hole in the supply chain and I love that you’re filling it up. I think that we need to get rid of all of these manual processes. First off we can do better with our data, but we also need to get rid of all these manual things. This is an opportunity to do better and have better data and make better decisions and have a whole lot less inventory sitting around and having the wrong inventory sitting around. I love what you guys are doing.

Phillip:
We’re about minimizing waste and thank you for having me, Joe, I really appreciate it.

Joe:
Yes, thank you so much and thank all of you for listening to my podcast. Your support is very much appreciated. Until next time, onward and upward!