ShipHero We’re Just Human Series: Dropshipping and Suppliers with Flxpoint CEO

Nicholas Daniel-Richards:

Hello, and welcome to an episode of We’re Just Human, interesting conversations with mostly sane people about the things we’re all dealing with. I’m your host, Nicholas Daniel-Richards, and today’s guest is Travis, the Founder and CEO of Flxpoint and Inventory Source, so a bit of a busy chap, a technology solutions platform that connects supply chain systems and providers with e-commerce sales channels, helping brands build better logistics. Hopefully I sort of remembered that right. Welcome, Travis. It’s been a while since we last spoke, when we, I think it was we co-hosted an automation webinar with Flxpoint and Shapiro and how those systems can be used together. How are you, good sir?

Travis Mariea:

Yeah. Doing good. Glad to be here and excited for this, and good to be talking with you again.

Nicholas Daniel-Richards:

All right. So before we get into questions on your recent experiences and insight, tell us about Flxpoint, Inventory Source, what they are, what they solve, who can benefit from them.

Travis Mariea:

Yeah, sure. So starting with Inventory Source, I mean, we’ve been around for 14 years. Our founder, Kelly Dyer scratches an itch, basically looking to integrate with distributors, inventory feeds, to sync real time inventory to send orders automatically rather than doing things manually to his online store. And basically start drop shipping, now 16 years ago, which was a very new idea. And then, we built a directory over the years of all these integrated distributors that we have, that you can easily just connect in and start selling their products online. And then about … I joined the company about five years ago. Our CTO did as well. The whole new team of our chief architect. And we kind of saw an opportunity to build for more of that mid-market, larger, seasoned retailer, where Inventory Source is really focused on getting started with your own business online like I know you are today, right?

Travis Mariea:

Like that, the new kind of store owner. So it’s great for that. And Inventory Source is still there for that and it’s the biggest piece of our overall business. Flxpoint is our new, been around for about two years now. It’s not … I say enterprise just to kind of differentiate, but really kind of just that more powerful, more flexible, robust platform that’s built for the more seasoned retailer who needs to connect, not only to a pre-built network, like we have in Inventory Source, you could easily connect to those two systems, but also integrate your own warehouse inventory from a 3PL-like warehouse management system like Shapiro. Integrate your own individual drop ship brands you might work with. Directly connect to their Shopify store, get a file automatically ingested. Basically manage all of your supply chain and connect your supply chain to your sales channel. So that’s kind of the two different brands and why we kind of have them both up today.

Nicholas Daniel-Richards:

Yeah. There’s a lot of stuff that you do. And I appreciate the fact that you’ve managed to package that in a … If I would’ve had to explain your platform, it would have taken me two days because I just talk a lot. So digital commerce as a whole has seen this accelerated growth over the past year. I mean, what trends are you seeing in what companies need? What changes have you been seeing with how companies have been using the platform?

Travis Mariea:

Yeah, so I am a little biased, but I do see, and I think it is true that we’re seeing more of this distributed fulfillment world where retail is shifting, and this was the bet we took initially. When I joined and what I’ve always been excited about is that it makes less to do traditional retail where you buy in bulk and store it in your brick and mortar or your DC and then just ship out of that one location, maybe out of your brick and mortar. It is more distributed now because more is going online and you can have, you can drop ship from a supplier. You can drop ship right out of your … “Drop ship”, you can ship right out of your brick and mortar. And you can really kind of have this multiple location and source of inventory to be sold because people aren’t just walking in the front door expecting to buy it.

Travis Mariea:

If it’s online and you’re shipping across the whole nation, we talked about this in our last webinar where we talked about reducing your carbon footprint and things like that. Having one DC and just kind of that traditional model of, I ship out of the one warehouse and maybe out of a brick and mortar, it doesn’t work if you’re shipping to people in California and New York and maybe even internationally. You need to have distributed inventory, essentially. So we’re seeing that. And I see it, I’m very much in this space and on LinkedIn and talking with as many people as possible like I know you are. We see it in our own business, but I’m seeing it being said more and more in these larger retailers and just from other consultants I talked to.

Nicholas Daniel-Richards:

Yeah. So I guess that brings up the next question. How has the past year affected your business directly?

Travis Mariea:

Yeah, so it’s, like many people in the e-commerce space, the best year ever, as far as revenue and net new bookings and things like that. It was an unfortunate situation but as we see in a lot of different industries, there’s been a lot of transition, and in transition there’s a lot of opportunity. So with that, I’d say the big thing is, it’s really allowing the Flxpoint brand to get up and going because of the distributed side of … I want to start shipping out of my brick and mortar now. Now I see it as a micro fulfillment kind of set up. So we’re starting to connect directly to the POS systems, as far as syncing inventory to understand what’s in the actual brick and mortar. More people are looking to drop ship in general because they’re not wanting to take on the risk of big purchases of wholesale. So that’s happening as well. So yeah, it’s been a good year for us financially and it’s really accelerated what we always thought was going to happen, is this new look at retail, as I’m sure you’ve heard a lot of other people in e-commerce.

Nicholas Daniel-Richards:

Yeah. There are a couple of Reddit groups that I follow. One is the drop ship, their subscriber count has grown massively over the past few months. Lots more new people coming in seeking advice. So, I mean, from your perspective, what advice do you have for newcomers that are getting into drop shipping, that are considering drop shipping? How do they get started? What’s the best way to approach it?

Travis Mariea:

Yeah. That’s a great question because there’s a lot of content out there about drop shipping. A ton. I know you’ve seen-

Nicholas Daniel-Richards:

Well, you have … you also have a lot of these drop shipping gurus as well, so there’s a lot of stuff that you have to avoid, right? So there’s that, yeah.

Travis Mariea:

Yeah. I’ve always liked to say that drop shipping, it’s got a bad name because of these gurus and this … because it’s so easy to get started selling online and the model helps that, that it’s this get rich quick scheme kind of reputation. And so I always like to say, it’s something we talk about a lot . It is a fulfillment model that will help your business strategy, right? Your business model. It’s the way that you fulfill things. It’s not your whole business. Drop shipping is not, I’m going to start drop shipping and I’m going to make a bunch of money online. It is a certain type of fulfillment model that you can employ, but you need to have a business strategy first, right? And so there’s two different personas or buckets that we have people come in everyday asking about drop shipping.

Travis Mariea:

It’s the, want to start selling online? We can help you with Inventory Source and it’s a good way to get up and get a feel for how things work and connect to your distributor. It’s great to get up and start with that. And there’s the other ones where I am drop shipping today. I’m doing it manually. Or I want to employ it into my already existing retail proven business. And that’s where we have Flxpoint that kind of is a little bit more powerful and flexible, but with that comes some more complexity. So it’s for more of that seasoned retailer.

Travis Mariea:

So I guess what I would say to people is, I understand kind of what you’re … make sure that you can prove to someone who comes on your site, that you can sell that item and they shouldn’t just go to Amazon and buy it. If you can answer that question, if there’s a reason why they should buy it from you versus Amazon, given that you’re selling the same products, right? There’s obviously different models where you might not be selling the same thing on Amazon. But if you are a reseller of products that are also available in Amazon, you need to have a strategy that that person’s not going to go, why would I buy it here? I’ll just go to Amazon instead. So if you have that, the rest of it’s just running business with a certain fulfillment model.

Nicholas Daniel-Richards:

That’s good advice. As you mentioned earlier, I recently started running my own e-commerce business. So this is my first, I’m learning a lot. I’m sharing everything I learn with anyone who wants to subscribe and I’m, shameless promo, there’s a link below in the description if you’re interested in looking up what I’m posting. So I’m not currently set up for drop shipping. I’ve … Basically, how the company has been set up is we have a supplier in Mexico. Now that I’ve got this business, I’m actually evaluating the product. I have a call with the agent in Mexico today because the company, they speak Spanish obviously, and I’m utterly useless at Spanish so I need the translator.

Nicholas Daniel-Richards:

So I have this agent. I’m going to go through and see what the options are for sourcing products. But drop shipping is something I’m considering as part of, again, to what you’re saying, as part of a bigger picture strategy. How should I approach drop shipping and shipping products myself? So I’ve got the drop shipping model and I’m going to be shipping products myself. Obviously, there’s the technology and the automation solution that Flxpoint is bringing, but any advice? I’m sure there are other people out there trying to solve this problem.

Travis Mariea:

There’s two different ways to employ the drop ship strategy in what you’re doing right now. One is, if I’m assuming you’re buying these wholesale from a supplier and they have a set of skews, and if you’re doing enough volume with them and they’re open to drop shipping for you, from Mexico, probably doesn’t make sense, right? So you’re probably going to need to bring them into your own DC. So if they did happen to have their own local warehouse in the United States, you could always, what the common use case, like I’m buying X amount of wholesale from you have these 10 skews. You offer 30 to 300 skews. Can I drop ship the other ones as well, to test them out, to see when I want to buy them wholesale? And typically most people will say, most suppliers will say, sure. It’s not going to be a 50% margin, it’s going to be 30% margin and we charge you a drop ship fee.

Travis Mariea:

And you’ll be like, that’s fine. I don’t need to take the risk of importing them into the States or at least put them in my warehouse. And then once I start getting the volume and traction, then I’ll buy a whole pallet of them. So that’s the most common retail strategy of, I’m working with a wholesale supplier. I’m going to drop ship the skews that aren’t the best sellers. They’re going to drop ship for me. And then I can add them in and get more margin. So testing out new products is great. That’s one strategy. Might not make sense with you because they don’t want to drop ship from Mexico. It takes too long or whatever.

Travis Mariea:

The other strategy is exactly what you’re talking about is where we see these brands who launch and they have even, only a couple skews, like less than 10 skews. It’s hard to gain traction and eyeballs on less than 10 skews and spread a wide net from a marketing perspective. So we’ve seen people bring in others and fill their catalog with other skews from other suppliers that are complementary products. Like you could, I’m sure you could find a Moscow mule kit, right? Like you can probably find a kit and that’s ready to go, that doesn’t come with the cups.

Travis Mariea:

And we’ve seen it. Even if you make … maybe you break even on that. Maybe the margins are so slim, you know that’s your target persona. That’s the customer you’re going after. And you could probably make a small margin, break even, whatever, but you can use as a marketing tool to get a Google Shopping ad up, Moscow mule kit, and get them to your site and then they’re in your marketing funnel for the copper … whether they buy or not, they’re in your marketing funnel. You get them to sign up and then you’re selling them copper pots eventually, right? And you can do that with any of the target consumers you’re going after and just find complementary products.

Nicholas Daniel-Richards:

Yeah. That’s pretty awesome. I mean, that’s precisely along the lines of, I think that’s more eloquently put, but along the lines of what I’ve been thinking, Doing more of that kitting, one of the things I’m going to get into is the packaging and all that. So it gets to another question I have. So in starting out doing this research, I can find tons of suppliers in China, in India. And obviously we have our supplier in Mexico. But I want a source closer to home. It would be preferential if I could find a US supplier, but I’m having a really hard time finding wholesale product suppliers in the US. I mean, any advice? This is your space. What do you think I should be doing?

Travis Mariea:

Just winding up that softball, right there. I’m just … I mean, that is what we’ve done. And you might not even know this, but we’ve actually just recently added … We’ve always had a directory in Inventory Source of 240-ish suppliers we’re pre-integrated with, that we’ve actually spent the time and integrated their warehouse manager system or EDI, API integration we had to do. And there’s 240 of them, we can say, hey, plug and play. You can connect to a drop ship. But what we’ve done recently, we’ve actually added 4,000 other wholesale suppliers in that directory as well and labeled them as non-integrated, because they’re not, right? They’re just, it’s a directory. So we’re actually changing the value proposition or adding to the value proposition. Inventory Source really is supposed to be a place to go source inventory, right? And it wasn’t that until about four months ago.

Travis Mariea:

And now you can go and search our directory and you can search by product, for the integrated ones, we have their feed integrated, so you can search by product keywords and things like that. But if they’re not integrated, you can just now search by the names and different categories, we have them categorized in there. So Inventory Source is one. I’ll just say the other competitors out there. That’s completely free, by the way. We’re the only one that’s completely free. You can just go look through 4,000.

Travis Mariea:

There’s other paid options like Worldwide Brands, SaleHoo, things like that. You can go look for it through them. We’re going to all have very similar suppliers. But that is probably the best way. And you see this a lot with like different guides on drop shipping and guides on just retail and e-commerce. You just need to go deep into like the fifth page of Google is what I’ve heard and seen in getting there. The last one-

Nicholas Daniel-Richards:

[crosstalk 00:15:14] have not optimized their search engine listings.

Travis Mariea:

Exactly. And then there’s always reaching out to brands and trying to get a list of distributors from the brands that you know. That’d be the other thing.

Nicholas Daniel-Richards:

That’s really cool. Good advice. Okay. So I got to check out Inventory Source. All right. So a bit of a shift, we’re coming up to the end of today’s episode. What are you looking to see for 2021?

Travis Mariea:

We are … What are we looking to see? I guess, from a business perspective, we’re looking to see Flxpoint get to market. It’s been, we have a good funnel of people coming through. We rank well, Inventory Source keywords. So we’ve kind of just been saying, hey, if Inventory Source is good for you … If you need more than Inventory Source, here you go, it’s Flxpoint. I want Flxpoint to stand on its own two feet. We haven’t really had to do any marketing. We have almost 200 customers on it and just the year it’s been out of beta, but we haven’t had to do any marketing. So I want to get it to market as a distributed fulfillment leader. I really do. And I want to get that … It’s not really, if you search distributed fulfillment, it’s not really a term yet. We want to own that category.

Travis Mariea:

You hear about distributed order management systems, which is fine, but I think just the overall strategy, distributed fulfillment, I’m really excited about. So I think what we’ve seen with everything in e-commerce recently, I think that’s good that distributed fulfillment strategy is resonating and we really want to be a part of that.

Nicholas Daniel-Richards:

Yeah, we’re seeing a lot of interest and we’re doing our work in that area too. But there … You have more of the … I feel like you have the upcoming DTC brands that are rapidly scaling that really get it. And then you have those more established brands where for them, it’s more of a shift of the organization and thinking about, it’s not … getting away from that we own everything mentality and it takes years to implement to, yeah, we can move fast and we can implement it now. So yeah, that’s a good one for 2021. What was the last item you purchased online?

Travis Mariea:

Well, still-

Nicholas Daniel-Richards:

By the way, the past two episodes, it’s been toilet paper.

Travis Mariea:

Really?

Nicholas Daniel-Richards:

Yeah.

Travis Mariea:

So I’ve bought a couple of things recently, and I’m trying to understand which … I’ll give you the three, because I bought them all on the same day, around the same time. But a fire pit, which I’m still waiting for. And my wife just asked to give the tracking number to her so she can help me track it down. It’s supposed to be delivered two days ago-

Nicholas Daniel-Richards:

It would be nice right now, considering this cold front that’s in. Yeah, yeah.

Travis Mariea:

Exactly. I’m not going to name the website. I literally said, this is why I always shop on Amazon because the second that you venture off, stuff like this happens. [inaudible 00:17:59]. I don’t want that to be the case, and hopefully [inaudible 00:18:02] fulfillment will help it to [inaudible 00:18:04]. But that and then a dart board backing, and then something real cool, disc golf. I bought one of those … I went out with a buddy and I always do this when I do a new hobby, and I just went and bought those disc golf nets, if you will, I guess, or goals. And I just got in the backyard with some discs. So [crosstalk 00:18:23].

Nicholas Daniel-Richards:

So you’ve got a new hobby and you’re obsessing on it, like how you can [crosstalk 00:18:27].

Travis Mariea:

Yeah. It’s great. Just grilling, drinking a beer, throwing a disc. It’s [inaudible 00:18:31].

Nicholas Daniel-Richards:

That’s pretty awesome. All right. So last question. How can people learn more about Flxpoint and Inventory Source?

Travis Mariea:

Yeah. Inventorysource.com, flxpoint.com. I’m really open with my email, travis@flxpoint.com. Flxpoint, no “e” in flex. So feel free to email me. I’m happy to do that. That’s the best way. There’s contact forms on the website. So, either one.

Nicholas Daniel-Richards:

That’s awesome. Travis, it’s been, this has been a very insightful conversation. I’m going to be on Inventory Source now looking for those suppliers. So I appreciate your advice and I hope you get that fire pit so you can warm up. It’s really cold here in Florida with our 35, 40 degree weather.

Travis Mariea:

I’m telling you, man, I had to shave the frost off the windshield with my credit card. That’s all I have is my credit card to do that. I don’t know.

Nicholas Daniel-Richards:

That’s pretty awesome. All right. Take care, mate. Cheers.

Travis Mariea:

All right. Thanks again. See you.