Watch: Webinar With Shiphero – Delivering on the Promise of Distributed Fulfillment & Dropshipping
Last updated on May 17th, 2022 at 05:10 pm
Summary
Travis Mariea, CEO of Flxpoint, and Nicholas Daniel-Richards, founder of Shiphero, joins us for this webinar, which will is a live demo and tactical guide to implementing a distributed fulfillment and dropship strategy with Shiphero and Flxpoint.
Learn how to use Shiphero’s multi-warehouse capabilities and Flxpoint’s Distributed Order Management system to drive down shipping costs and increase customer satisfaction.
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Below, you can view a transcript of the webinar.
Travis:
We’re looking at the video stuff, we’ll see if we can get it figured out. If not, we’ve got the presentation so we should be good there. Really, the quick background, so Nicholas and myself got together and want to talk more about this movement in drop shipping and distributor order management, and kind of how our solution helps this progression towards this new supply chain, approach to the supply chain really, and in this evolving retail world. And Eric is one of our mutual customers that is both on Flxpoint and using ShipHero, and he’s going to talk a little bit about his experience, how he has it configured, and really giving you an idea of what that looks like. So with that, we’ll see if we can get video figured out. And if not, I’ll go ahead and get jumped right into this presentation. Oh, there we go Nicholas. Who needs video? You’re right there.
Nicholas:
I apologize, that was one of my worst moments.
Travis:
So yeah, myself like I mentioned, Travis, CEO of Flxpoint. We’re a distributor order management system. Nicholas, I’ll go ahead and let you kind of give a quick background.
Nicholas:
Sure. I’m Nicholas, co-founder and troublemaker at ShipHero.
Travis:
All right. I got the word we should be able to start video now. So let’s see if it allows us. No.
Nicholas:
No. It says you can’t start your video because gingers are not allowed. No, it says because the host has stopped it, so whatever that is. I don’t know if I need to reload or whatever.
Travis:
Zoom is pretty serious.
Nicholas:
Yeah.
Travis:
Forbid record is one of the options I have here.
Nicholas:
Oh wow, okay. Yeah, I guess that makes sense.
Travis:
Okay, so either way there’s Nicholas. Eric, we’ll have to send out a picture of you to everyone. All right, I’ll go ahead and get jumped into the agenda. So we’re first going to talk really about the rise in distributors. I’m not going to talk too much about this, I’m not going to go into too much in-depth here, because if you’ve seen any of my webinars I do talk a lot about this. You can always go and search Flxpoint on YouTube and talk more about it, and learn more about it. But we will give a quick overview for those who aren’t familiar with distributor fulfillment and distributor order management.
Travis:
Eric’s going to jump in and talk about his setup with ShipHero, and how he works with his customers using Flxpoint and ShipHero. And then I’m going to go into a quick demo, like we talked about, a tactical guide actually showing you the features and functionality within Flxpoint that helps you execute on distributed order management. I’ll kick it over to Nicholas there, and we’ll do a ShipHero kind of WMS, and fulfillment services overview, as well as a demo. And then we’ll jump into Q&A from there. So I’ll get started.
Travis:
So really, we talk about distributor fulfillment and drop shipping becoming popular in this evolving retail landscape, it’s really because we’re in this era of eCommerce and Amazon that’s being accelerated now more than ever. Retailers are really being forced to significantly increase their digital catalog size, more products on their website, on their store, and then really supporting fast, often free shipping. So Amazon has really kind of pushed the bar there, set the bar and pushed the limits really on what you need to be able to do as a retailer to gain consumers on the internet.
Travis:
So increasing catalog size is one, adding more products to your catalog online is tough to do, and also supporting peak fulfillment across the United States, or even internationally is even tougher to do. And then really, trying to bring on new, smaller trendy brands is definitely a trend we’re seeing, and increases a lot of the difficulties of just onboarding in general. So all of that, those macroeconomic forces have kind of led to distributed fulfillment, or distributed order management. And so what that means is traditionally in the supply chain, what we’ve seen for decades is a large department store, a large online retailer will send a large PO to their supplier, their warehouse of product, and they will get in that large PO of product in their own warehouse or their own brick and mortar store, and they’ll sell it online through their website or they’ll sell it through their brick and mortar store.
Travis:
So it’s very infrequent orders, monthly, quarterly, whatever it might be. Large risk, large buying of product, and that’s what the original supply chain is set up to do. Distributor fulfillment is more along the lines of having inventory distributed as it sounds, across multiple warehouses. Whether it’s your own internal warehouse, whether it’s also located in your brick and mortar location, your third-party warehouse that you may have partnered with someone like a ShipHero, and are storing your inventory in a third-party warehouse because of international needs, or having another warehouse on the West Coast.
Travis:
And then even drop shipping, which is essentially buying the product after the consumer buys it on your website, buying it from your supplier after the fact, and then having them ship it out at one single order on your behalf. So all of those possibilities when it comes to fulfilling a single order, and trying to orchestrate that is kind of the complexity and the benefit of distributor fulfillment. You can kind of see how having the inventory in multiple different locations, as well was having quick access with low risk of inventory can benefit those trends I showed earlier, and those needs as we go more online.
Travis:
So distributor fulfillment, much more difficult, much more complex, but a lot of upside when you can actually implement something like this. There’s three real main components of distributor fulfillment. Third-party logistics warehousing, so working with a company to warehouse your inventory in their warehouses. The drop shipping fulfillment model, where we saw empowering retailers to sell inventory that they don’t actually have to buy upfront and take on the inventory risk, or keep in their warehouse. And then the ship from the store, or the buy online, pick up in store approach, and more of that happening. So converting your brick and mortar to almost a little bit of a micro fulfillment warehouse to be able to ship those out.
Travis:
So this really does empower retailers and brands with more efficient shipping allows brands to ship direct, versus having to sell through distributors and cut out margin. Even with the third-party side it allows brands to start drop shipping when they couldn’t have done it themselves because they don’t have the warehouse resources, or team, or capacity, whatever it might be. We talked about the inventory risk, and dropping that with the fulfillment model, but a lot of just benefits to implementing it, and it’s really across these three components that we see it being implemented.
Travis:
So, there’s challenges with both sides. We’ll start with the retailer side. If the retailer is wanting to increase their catalog, or reduce shipping costs in time they look to distributor fulfillment to implement that to try to achieve these. But now they’re relying on suppliers to drop-ship across stock. So a lot of that trust has to go into their suppliers. Not only just relying that they’re actually going to ship it, but can they trust the data, syncing and trusting the inventory quantities is a big piece of that.
Travis:
When an order comes in, how do you orchestrate that order between those four different locations I showed in that previous slide, of your own warehouse, your own brick and mortar store, a third-party warehouse, a drop shipper. How do you make sense of that and do it automatically on that scale? And then how do you pay for these POs as they come through? Very high volume, very different from the traditional side of things.
Travis:
And then from a brand side, they also face these, and Eric can talk a little bit more about this. But the retail partners are asking for drop ship, they’re asking for cross stocking, so how do you deliver on that? You have your own warehouse now, you’re one of those warehouses in the multi-node step of distributor fulfillment configuration, so how do you start accepting daily POs, both from drop shipping and cross stocking?
Travis:
Cross stocking for those who aren’t familiar, it’s basically taking in a single order, consumer order from your retail partner, sending it actually to a retail warehouse, and then the retail warehouse sending it onto the end consumer’s residential address. Make sense for certain scenarios, similar to drop shipping in that way, that is it’s a little bit more of a complex order fulfillment challenge.
Travis:
Pricing products and providing inventory. So you’re used to selling wholesale and getting these large POs. How do you start pricing, how do you manage the different pricing for wholesale orders, for drop ship orders? How do you provide inventory, managing that is very difficult. Shipping and branding shipping, and then just branded packing slips. So you now are shipping directly to the consumer’s address. You might not be used to that, you might’ve not started direct to consumer like a lot of brands are today.
Travis:
And not only that, even if you are direct to consumers, how do you brand the packing slips specifically for your retail partners? Because they’re going to want to appear like they came from the retailer, versus the actual supplier. Something called blind drop shipping, a big challenge to face. And then invoice payment returns management, same kind of thing. More high-volume, more transactions, a little bit more difficult to implement.
Travis:
So with that Eric, I’m going to turn it over to you. I’ve kind of got your setup here, as far as how you use it. We want to look at the supplier’s perspective first, so Eric is a B to B, he’s a supplier product. And so Eric I’ll kind of just let you talk through how you’re using ShipHero today, how you’re using Flxpoint, and kind of just how it benefits your flow and how it gives you a competitive advantage? It will be kind of great to hear.
Eric:
Sure, I’d love to explain that, Travis. Well we’re mainly finding with a lot of the dealers that are doing the drop shipping, as they were sending us things manually before, and that’s just not scalable. So we were getting all these orders via email, and they were always asking for tracking. So the tracking was not flowing to the dealers, because everything’s coming to us manually. They weren’t having the time to log in and do the high volume orders, they can’t log into our eCommerce website and search easily for tracking, so it was just basically a giant mess, giant cluster.
Eric:
So we reached out to you for the Flxpoint setup, and it’s been a night and day difference. We’re able to integrate with all of our retail partners that we’re doing drop shipping for, and Flxpoint either integrates with their inventory source, or directly to their websites depending on the situation through the API. And we actually ship through ShipHero as well, so ShipHero is our complete WMS. So when we ship in ShipHero, it’ll automatically route the tracking back from ShipHero to Flxpoint, which will push to our retailer.
Eric:
And that was one of the major pain points, pushing the tracking back. And we are able to do the branded packing slips, like you were speaking about. ShipHero, and Nicholas maybe you can speak to this, and I’ve seen you and meeting you right now, looks like our video finally went live here
Nicholas:
Yes, I’m sorry everybody that has to look at our faces, specifically mine. You guys are beautiful.
Eric:
Well this is my good side, right? So I’m not even sure if ShipHero is even designed for business to business. To me it seems like obviously it has a lot of features that we use for that. But maybe you can speak to that later in the call. But we actually use the warehouse’s feature, the My Warehouses is what we’re doing for the retailers that we drop ship. So we’re able to add basically a virtual warehouse essentially, which allows us to upload the dealer’s logo, the dealer’s address, the dealer’s support email, and the dealer’s phone number.
Eric:
And then every time we drop ship for a dealer, that’s a packing slip that gets printed out and we just throw it in the box, and it doesn’t have the dealer’s cost or anything on it. It’s just got the quantity and the SKU. If I was a retail customer receiving a shipment from the ShipHero packing list, packing slip, I would have no idea that it was actually a drop ship. It’s probably next to impossible for them to figure it out. And that’s what our retailers want.
Eric:
But Flxpoint has been absolutely key with keeping track of the orders as well, that have been coming to us, in addition to pushing the tracking back once it’s fulfilled. So the dealers are sending us these orders through their own Flxpoint, or through inventory source, or from some other way and we’re able to easily manage all those orders, and search, and now able to push that also, into ShipHero too. And that integration is just a seamless integration for us, and allows us to scale.
Eric:
We’ve seen drop ships increase significantly in our industry, specifically. When you go from a pandemic riots to defunding police, you tend to get a lot of orders in ShipHero, and Flxpoint have allowed us to essentially quadruple our volume with minimal staff increases, in just a matter of two or three months. And I mean, without Flxpoint and ShipHero, there’d be absolutely no way we could even come close to quadrupling our revenue in just that short amount of time.
Travis:
I appreciate that Eric, and I know you guys faced different demands recently, right? You’ve always kind of had people coming through the inventory resource app, and placing orders right into Flxpoint. But recently you’re getting requests for those to just manually have a checkout, so using the dealer portal. I know a big piece as you start working with larger retailers is being EDI compliant, and the ability to just give them an EDI file, things like that. I appreciate you kind of talking about that, because that’s what it’s really about, right? Being able to scale, and not have to hire heads and throw bodies at it as you grow in order volume.
Eric:
Exactly. And I mean the only thing I’d like to add too, is even the retailers that we’ve been partnered with, that have been using something like inventory source, like we’re starting to actually see those retailers hungry for more technology, and hungry for a better solution. I mean, I know that one of our main retailers that just recently switched from inventory source to Flxpoint, I know they ship through ShipStation, for example. And I’m thinking to myself, they’re moving so much volume. I know what Ship Station is, I can’t imagine trying to figure out if something’s shipped or not, just by a one function cloud software, if you will. They should really be on something like ShipHero, honestly. So that’ll be in my next talk.
Nicholas:
I’ll pay you later for that one.
Eric:
Sounds good. I’ll accept the kickbacks. I’m not going to turn down any kickbacks, I’ll give you that. But it’s not something a lot of companies know they need until they’re told about it, honestly. And once they’re told about it, you can very easily show them that this, like Travis was just saying, eliminates the headcount. Instead of throwing more money and throwing more people at it, why don’t you throw more technology at it? And that’s worked really well for us, and I recommend that to our dealers as well. So hopefully everyone that’s attending this webinar today can learn more about Flxpoint and ShipHero, and if it’s for their company, move forward with that.
Travis:
Eric, I really appreciate that man. It’s really good to kind of hear how you have it set up, and how it’s working for you.
Eric:
You’re welcome.
Travis:
Cool, so jumping onto the next slide, that was really the supply side. So as we mentioned, Eric uses the multi warehousing capability, the virtual warehouse capability, ShipHero, and has multiple dealers sending in drop shipments to him. A big part of the retail side is sending those orders and deciding, do I send it to my ShipHero warehouse, my warehouse that’s using ShipHero? Do I send it to a drop ship supplier that might be using whatever technology? Do I send it directly to my brick and mortars? So just to kind of show the diagrams here on the retailer side, an order comes in from a consumer, if you’re an online retailer you know one thing that you need to be doing is delivering and syncing up inventory, specifically to any one of these channels.
Travis:
You might be selling at a Shopify store, Magenta store. You might also be selling the same products on Amazon, or WalMart, whatever. So the one thing you need to be doing is definitely syncing across these multiple locations. So pulling from your internal warehouse, directly from ShipHero, combining that inventory with maybe the same product from your drop ship supplier, even maybe leveraging the ShipHero fulfillment network where you might have that store for an international purpose, or whatever it might be.
Travis:
So the first part is really having that inventory synced, so you’re not selling things that are out of stock. Secondly, once you receive an actual order from Shopify, it’s now generating a purchase order, and traditionally a purchase order to your supplier, but it’s going to be that one specific drop ship purchase order. Sent directly from API or EPI, or EDI perspective to your supplier. Maybe it’s sent via email or CSV, whatever they require. We’re going to be placing orders directly into ShipHero for those that you decide make the most sense from a warehouse perspective. And even maybe using the multi-warehouse function to decide if it should go somewhere else.
Travis:
So let’s see, timing wise I want to make sure we’re good. That’s really kind of the overview here. I really want to get into the demo lead, Nicholas, sometime here. So I’m going to jump right into the demo. But essentially, tracking invoices and going back as well, to really fully automate that whole side thing. The big part of the demo here, I’ll show you in a minute, is making these decisions and making sure to route the orders appropriately.
Travis:
All right, so jumping right into Flxpoint real quick, I want to kind of show you, we have those warehouses on the left-hand side. I want to show you really what it kind of looks like on the Flxpoint side, looking at the sources that you’re connected to. So I’m a retailer in this scenario, and I’ve got multiple warehouses that I’ve connected via ShipHero, as you can see, to pull inventory, to send purchase orders, to pull shipment tracking. I also have different customers here, I should say supplier partners that I drop ship from, and that I’ve connected via different means, whether it’s a file or some other method like an inventory source connection, whatever it might be.
Travis:
So the big thing to kind of see here is not only do you have these connected in one way to pull inventory, but also you might need to send purchase orders a different way. It might not all be done via API, depending on who you’re working with. Some might be a file that gets pulled from inventory, but you send orders via API or EDI, so we have it configurable there and flexible enough that you’re able to connect. I’m not going to jump too much into this, but it’s all mapped in and easily set up, whether it’s from our team, or there’s a self-service way to integrate files. I’ll show you real quickly.
Travis:
The ShipHero API, it’s all integrated, setup, turnkey. You just put in an API key, but for those that you are pulling files from, we’ve got CSV file integrations, easily kind of mapped in, mapping templates, imported stamps, different ways to connect very quickly with any of your drop ship suppliers that you might be working with. Manual upload is one option, but obviously you’re going to want to receive this automatically from your suppliers, so if they’re sending emails or putting it on an FTP location, whatever it might be, easily kind of setting that up, mapping in the files with a mapping template, and running the integration.
Travis:
Really, I know this is big in Eric’s space, running the integration as quickly as every five minutes. So pulling new inventory every five minutes, making sure when they have runs on a product, to get that up to your website as quickly as possible. But then definitely different options as well, on when you want to send POs and things like that, that can all be timed are pretty flexible to set. So you build that integration from Flxpoint, you’re pulling in that inventory, really what you’re getting from there, the net result is to pull in products.
Travis:
So we’re going to pull in products with full product data when we do have the options to do that. We’re going to build them into a virtual catalog as well, kind of combining those products from multiple locations into one. I’ll show you kind of what that looks like. And the whole idea is that you’re building this one central, virtual catalog with multiple products, what we call source products. So that one product in your virtual catalog can be mapped to your ShipHero location, it can have a certain amount in stock there, it can be mapped to your drop ship suppliers, it can be mapped to your own internal warehouse. All that mapping is done automatically through our UPC and NPN kind of aggregator, what we call the virtual builder.
Travis:
And you can really kind of see here real quickly, just looking at one of these backpacks, that it’s one backpack, but I’m going to push to my Shopify store, my Ebay store, website, whatever it might be, with all it’s various structures in place. It’s linked really, to those two sources. As we saw earlier, those diagrams of the warehouses, so it not only exists in the US direct warehouse, but also source and supply. Your own ShipHero warehouse can be here as well, they’ve got different… in this case not so much, but different quantities, costs, things like that, that are all kind of aggregated, and managed in a virtual product kind of way.
Travis:
And so these are then easily listed to multiple channels, you’ve got different mapping templates to set pricing. Not going to go into it today, it’s kind of outside the scope of this demo, but that’s kind of how you get the products in, and how you get them pushed up, and mapped across. The big part of this really is kind of showing the orders, so when an order comes in and how that kind of relates to the distributor fulfillment, and drop shipping. It’s not as easy as a traditional order where you might fulfill yourself.
Travis:
You’ve got an order here, and I’ll kind of walk you through what this looks like and I’ll show you what’s going on in the back-end. But essentially, we’ve got the two different SKUs here that have come in from my Shopify store, big commerce store. I’ve got a channel invoice. For the B to C side of things, it’s simply just a receipt. Whatever the shipping and the fees were, whatever they paid on the website, but in Eric’s case, you can actually leverage this to set different dealer groups to automatically invoice, depending on the dealer, a certain fee, a certain shipping cost, a certain item cost, whatever it might be.
Travis:
You can dynamically generate this invoice, and have it be deferred, and paid in net terms. It really allows you for that B to B interaction, versus strictly a B to C where we’re just assuming everyone is checking out on a website. That’s not the case. For Eric, he’s receiving automatic inventory if I can go back to this real quick. He’s receiving automated orders from emails, and inventory source platforms, and different manual checkouts where that might be the case that they might want to get a quote on what was their cost, versus what another dealer’s cost is.
Travis:
So that invoice comes into play from the B to B side of things much more, but if you receive B to C orders and it’s all checkout through your big commerce store, it’s all the same UI. It makes it really easy to run what we call a mixed model of both B to B and B to C.
Travis:
And so once you get that order in, you’ve invoiced them appropriately, you then now need to split this order into multiple purchase orders. You can see in this case, it’s going to two different suppliers at two different locations. One to U.S. Direct, one to Sports and Supply. Those are automatically sent, whether it’s via email, or over an API connection. You’re going to get tracking back on your fulfillment here, and lastly, you’re going to get sourced invoices back from your suppliers that have statuses, that have that actual cost of the item. So really, once you get that item cost back from a drop ship perspective, you know how much you sold under your big commerce store, you’re finally going to get a fully reconciled order here, knowing if this is profitable or not, which is a little bit easier said than done when it comes to drop shipping.
Travis:
A lot of times you have your own costs in your warehouse, you’ve got a cost from your drop shipper who won’t tell you how much that loaded cost with shipping and fees, and all of that is, until after you’ve ordered it. So getting that reconciled is definitely something we can help with, and integrate, and really automate just by connecting to the invoices. So that’s an order. What’s going on, the magic behind the scenes on all of that really, is kind of the routing size. So I’ve got three minutes and I’ll kick it over to Nicholas.
Travis:
But to show you kind of what’s going on in the order side, let me jump to orders, we’ll go to routing. You can see there’s different rules you can set for putting orders on hold. You can only automate if you can take care of the edge cases as well, because if you try to automate everything and things don’t go according to plan, so if you take care of the edge cases like international orders, stopping orders over a certain amount, maybe even identifying California orders by tagging the items that are California restricted and looking for those on orders, to stop them before they’re automatically routed.
Travis:
Accounting for these edge cases allows you to truly, fully automate. And then when you do get to the point of automating those orders, you’ve got a couple different routing groups we can create, just to show for the default routing group, for the sake of the demo. When an order comes in from big commerce, you’re going to run through some routing priorities. So I’ve got my ShipHero warehouses over here, and in this case you can configure a couple different ways. We definitely recommend Flxpoint being that center control. Rules engine, because it factors in all these different… your drop ship suppliers, your ShipHero warehouses, so you can really configure it either way.
Travis:
You can send to ShipHero, and ShipHero can have some rules down the line, downstream to make some decisions. Or, you can just really determine and route to a specific warehouse using our rules engine. It all depends on your setup. Typically, this is the ideal setup here, check out a route to the warehouse through ours. But really what we’re doing here is we’re first looking and saying this order with two items, try to get it to a single source. I’d rather do that first than anything. I’d prefer that, if that can happen great. If it can’t let’s keep moving on either way, but we’re going to prefer that versus require it.
Travis:
So once it does say that, there’s two different options. I can send the whole item to my warehouse, the whole order with both items to my warehouse, or the whole order with both items to a drop ship supplier. Move onto the next rule. Lowest cost, what is the lowest cost item? That’s going to factor into the drop ship fee that you configured at a warehouse level, if you are charged drop ship fees. If you’re using rate shopping on our Flxpoint pro-plan, it’s going to factor in the actual real-time rates that we pull from UPS, FEDEX, DHL. And factor that in as well.
Travis:
And then lastly it’s going to factor in the item cost, which might vary, depending on if you’re going to pay less for a wholesale purchase that you made, and an item that you have in your own warehouse, versus a drop ship item. So that’s factoring in all three of those to determine lowest cost. If it’s not outside of a marginal amount of cost, they’re all about the same cost. It’s going to move onto preferred sources, which rank here. And I always want to ship from my warehouses first, and it’s going to factor in California versus New York here, because of the lowest cost. And then lastly it’s going to look for the shipping policies.
Travis:
So all of that is kind of the behind the scenes that is making those two POs like I mentioned earlier, split and split appropriately. All the logic behind that is kind of the secret sauce of Flxpoint. And really in the drop ship world, and distributor order management world, that little bit of margin matters each time. Not only from a cost perspective, but also customer experience. If you can ship it to a closer warehouse, you can squeeze some margin out, and add some value to the product in general. It’s going to be better for you. And then lastly, you’ve got the cross stocking ability to override addresses and ship it to your own warehouse. So all of that factored in, that’s kind of the setup in what we typically see in a high level, and how we work with ShipHero, and how you factor in your own warehouses that are on the ShipHero platform. With that, I’ll go ahead and work through these slides for you, if you prefer, Nicholas?
Nicholas:
Yeah that works, that’s fine. All right, so hope everybody’s doing okay. It’s fascinating, I like all our different home setups. I imagine if we see other people’s videos we’d see some also home setups too. So I guess first off, I’ve learned a bunch of stuff, by the way lads, so thank you. I would say that there were a couple of things that came up, which we can actually answer and put into context of what we’re focusing on at ShipHero. And to put it into context, logistics and supply chain, and all other buzzwords and terms, it’s a very complicated and deep world. There are lots of different areas of specialization.
Nicholas:
So for us, we made a conscious decision when we started out seven and a half years ago out of our own frustration with poor software, that we weren’t going to do everything. In fact, there’s a lot of things here that Flxpoint is doing that really work well with what we’re doing, because we simply don’t do it. So it’s awesome to have this system that can help us accomplish what we’re focusing on. So we believe that good software should be simply to use, and things can be complicated, but if you’re paying nerds like us money to provide software, one of the things that we should be solving is the complexity.
Nicholas:
So some of the stuff that we were looking at, that Travis was just showing, I know of many large, more expensive platforms where that kind of thing involves consultants and lots of dollars being spent, as opposed to a user interface where you can just do it. And that’s how we think in terms of our platforms. Next slide, Travis. That’s weird saying next slide.
Nicholas:
So the two things that we do, I should note, one is fulfillment as our own offering. This is really for customers, eCommerce brands. They could be just starting out, it’s a side hustle, or they want to outsource their shipping and fulfillment as a service, which is kind of a new thing that’s emerging, as opposed to trying to go down the 3PL route. So typically 3PLs, when you work with a 3PL, not all are like this, but it’s typically been a space where they require contracts, minimums. It’s kind of a black box, they’re not very responsive. They’re not natively technology companies, so that’s one of the things that we’ve been really focused on, is thinking eCommerce merchants first.
Nicholas:
So that’s taking into account things like speed and accuracy, fulfilling lots of little orders is a very different challenge than taking truckloads of pallets into one side of the building, and out comes truckloads of pallets on the other side. And fulfillment should be an opportunity for actual customer happiness. What I mean by that, is the customer got what they ordered fast, they got the things that they actually ordered, and maybe there’s some special treatment. With a lot of these platforms and how you can actually automate between Flxpoint and ShipHero, you’re going to be able to automate things such as not only where the order is being shipped from, but how the order is handled as well. Maybe different packaging, or a different box.
Nicholas:
So we have the two things, first off, the software. So our software is used by eCommerce companies to manage their own warehouses, and we also have 3PL software. So one of the things that we set out to do, was to help 3PLs who are not natively technology companies, have awesome tech and be focused on eCommerce customers too. So we’re taking care of a lot, it’s comprehensive, but sort of overall, obviously syncing with the sales channels, and the input points of orders and inventory management. The automation, so talking about how one of the things that you mentioned earlier Eric, as far as ShipStation. So I think ShipStation, another company with the word ship in it, but there are so many of them.
Nicholas:
ShipStation is an awesome piece of software. If you’re starting out and you’ve got some stuff and you just want to ship it out, and instead of going onto different websites and trying to figure out cheaper shipping labels you can just print out shipping labels. Obviously, once you start scaling, and I think what they’re all witnessing in various levels, real changes that have been going on over the past few months, due to people shopping from home, not being able to go to a store, you start to run into interesting problems once you start to deal with scale.
Nicholas:
So one of the things that we’ve really focused on, is we have this laser focus on everything that’s happening in the warehouse. So you’ve got Flxpoint, that’s managing things across the network. And notes, and from disparate data sources, and then you’ve got really, from a software perspective, ShipHero is making sure that the software is streamlined, and really easy for the people that need to get their stuff done in the warehouse. One of the things that we say a lot, is the less thinking the better. So I know exactly where I’ve got to go, I know exactly what I’ve got to pick, I know exactly what I’ve got to put in the box. So we focus on that, part of that is figuring out the cheapest shipping options as well, so we do the cheapest label and all that stuff.
Nicholas:
And then finally, the fulfillment, which I mentioned earlier. So we launched a couple of years ago, the Marketplace.Shiphero.Com, and I say that not as a plug, but just to show how uncreative we are when it comes to naming. But it was the idea that there are eCommerce brands that are trying to outsource their fulfillment, they’re looking for 3PLs. Google 3PL and you will see some of the worst websites in the world. So we decided why don’t we just take… we have 160 3PLs using our software, why don’t we put them all in one place so you can search for them, what services they provide, the ratings, and all of that stuff.
Nicholas:
And what we found when we launched the site, was the majority of customers coming in were not big enough for a 3PL. So 3PLs typically require volume, at least a couple thousand orders a month, in order to be profitable. So when you are too small, you essentially have no solution. So we launched fulfillment, and a lot of what Travis has been talking about as far as distributed fulfillment models, we’ve really been focusing on that, and one of the reasons why we focused on the distributed model, was actually something that Travis was saying earlier on, and that is shipping.
Nicholas:
So especially in the U.S., when you think about shipping zones and all of the complexity with that, and then you’re like we’ve got to figure out which warehouse to put things into, if you have multiple warehouses. So we’ve really focused specifically on the fulfillment service of doing a distributed model where we’re forecasting where our inventory needs to be, we’ve cross-stocked, we’ve put that inventory into the different locations. And the whole idea of it, is essentially to localize your products. So when you’re thinking about distributed inventory, it could be because you want to build resiliency, could be because you’re using different services.
Nicholas:
Another reason, which I think is going to become more prevalent as time goes in, is being carbon conscious when it comes to how your packages are being shipped. So a big thing that you can do, is just not fly things to places. Planes are very carbon costly. I’ve been spending way too much time reading upon this stuff, as we’ve been launching a service. But yeah, that’s another thing to think about when it comes to a distributor fulfillment, is if you are building your own network, or spreading, you’re essentially load balancing across your network, you can actually model it, and Flxpoint does a really good job of this, you could really model it where you’re actually able to bring down the cost of shipping. Imagine that, so you’re not doing zone seven, eight, you’re sort of typically averaging zone four, zone five, which is fascinating. So that’s something that we were really focused on.
Travis:
And Nicholas, I wanted to bring up that marketing question, because one thing that we determined when we were talking last week, is we realize that having a ShipHero WMS in your own warehouse is a great, easy, quick connection, but you guys launching into marketplace allows you to now easily connect to any 3PL that is on the ShipHero platform. So we always get people to say do you recommend a 3PL to use? And now because we’ve built this integration, now we’ve gotten used to the 63 different warehouses that you connect to and can easily find here. So I thought that was helpful, because I wasn’t even sure about that when we initially talked, if that was the case, but it seems like it is and it definitely helps with that. If you want to go international, or if you just need a west coast location to decrease that carbon footprint, you’ve got it right there by a quick and easy integration.
Nicholas:
Yeah, and I think this is the radical change that we’re seeing. So what we’ve seen over the past several years, is the emergence of SaaS products, but you still have the old school players that are in the space, they’ve been doing it for years, they have their lingo, they have their words. But many of us, we don’t have the comfort of saying we’re going to use this company, and what’s the integration? Let’s figure it out. It takes six months? Great, you just don’t have the time. So you need to be able to move fast, and in some cases it’s also an experiment. There is no done. We’re all trying to figure stuff out that’s flying at us, and we’ve got to be able to rapidly adapt to all the stuff that’s changing.
Nicholas:
So to your point, we’ve seen a few merchants who have actually used our software, where they do no fulfillment themselves, but they’re using 3PLs that use our software, and they’re building their own fulfillment networks, which definitely when we started this seven years ago, I never imagined that, but it’s amazing where things go. So yeah, it’s a good point.
Travis:
Did you want me to make you the host? Are you able to share-
Nicholas:
Sure.
Travis:
Let me see where this should be. Let me know if it doesn’t allow you.
Nicholas:
Look at that ginger face. Let me see. All right, let me know if you can see that?
Travis:
Look at that, seamless technical transition. Look at that.
Nicholas:
Wow, that’s amazing. The internet will break in three seconds. Okay, so yeah, I’ll give a brief overview. So what we’re looking at here is ShipHero SAS, so this is if you’re using software to run your own warehouse. So there’s two sides to our SAS product. You’ve got access to everything, so your probably an operations manager, or running the warehouse, you need to be able to connect carriers, configure carriers, configure your shipping, all of that stuff. When we were talking earlier about roles, so with ShipHero being so focused on eCommerce, things like B2B have not been our focus. Our focus is you’ve got orders coming into the system, how do they get prioritized, what are we figuring out in the shipping, and they better get picked and packed accurately, and they get out the door.
Nicholas:
That is our focus, and we can do that in one warehouse or multiple warehouses. So really, when you’re thinking about how the systems work together, we haven’t tried to figure out everything that you guys over at Flxpoint have figured out. Precisely all these things that have happened in the warehouse, and that is enough. There’s so many things that you need to get right in a warehouse, especially when you’re doing volume. So, us trying to take on the world and solve everything else, and do it poorly was never a decision of ours.
Nicholas:
So the idea here is that I’m in my dashboard. I could, for example, so we talk about the automation or routing that happens at different nodes. Once it gets into a node, you can then do automation within that node, so how the order is treated, prioritized, set a shipping method, send a message, flag an order if you’re detecting something wrong. So you can set those automation rules, but this interface here, is really for someone who’s managing everything. The interface, I’ll show you the warehouse allocation stuff in a minute. The interface that your pickers and packers are going to be seeing, is more like this. So it’s just laser focused. I see the orders, so this is the packing screen. I see my orders, I’m scanning a barcode, and I’m able to… let’s see if I can load one of these up.
Nicholas:
So I would scan the barcode of the total that’s been picked into. Obviously, my test store has socks because I’m British, besides that Aster Martins. And I’m able to scan those items, it’s figured out, it’s going to Michael Cain, of course. It’s figured out the shipping label, and I’m just using a barcode scanner and I’m scanning an instruction to print the shipping label. That’s going to send that information back to the source store, in the case of it coming through Flxpoint, that’s going to go back to Flxpoint, Flxpoint is going to be communicating that.
Nicholas:
And then the final thing I’ll show before everybody falls into a deep coma, is what we call multi-warehouse allocation. So we’re not as fancy as you Travis, we don’t have fancy names, unfortunately. So the multi-warehouse allocation is simply you have multiple warehouses, how are you allocating orders to those warehouses? So me and Travis were talking about this the other day, we’re like there are some areas that both ShipHero and Flxpoint, they both do the same things. So obviously if you’re implementing both systems, one of the things to keep in mind, is the solutions team members on both of our teams are going to be very aware of the overall setup, and how best to utilize both systems for where you should have allocation rules, and routing rules.
Nicholas:
So in the case of ShipHero, we have these multi-warehouse allocation rules specifically for our customers that they’re connected directly to the store, they’re doing some dynamic allocation between maybe they have two warehouses, or maybe they have their own warehouse and they’re using a warehouse that’s using ShipHero. It’s very ShipHero focused, and it’s very similar in terms of what Flxpoint allows you to do. We probably don’t have as many bells and whistles, but it’s the same sort of rules. You have your conditions, you have your actions, it’s figuring out which warehouse to go to.
Nicholas:
With Flxpoint, when we were looking through this and saying if I’m looking at this as a solution, what is the difference? ShipHero is just about ShipHero. So Flxpoint is going way beyond that. So for example, ShipHero does not have a native EDI connector at this point. We have enough customers now with all the pandemic stuff that are demanding that we add EDI, but we don’t have a lot of the things that Flxpoint has outside of the world of ShipHero. So thinking about how the systems work together, you have drop shippers, suppliers, different nodes, different networks. You would use Flxpoint to essentially be the connector, and router, and the logic with what’s happening based on what order came in, or what inventory’s being managed, what store is connected. And ShipHero really is that laser focused, okay the order’s in, we’ve got to get it shipped. And I need to know in real-time when the item, or when the order has shipped and it’s being communicated back to the system as soon as it happens. And yeah, that’s it. Obviously I could talk for 16 more hours, but I’ll stop there.
Travis:
Appreciate it, thanks for kind of clarifying how the two systems set up, and really the big thing to takeaway from that is our team is familiar with ShipHero, ShipHero’s team is familiar with Flxpoint. Our teams will work together to get you guys setup, and there’s a lot of value in having a collaborative team like that, versus picking one solution, picking another solution, and then going from there.
Nicholas:
Yeah, and we won’t take six months to do it either. We’re very straight. There’s so many things out there that are made so bloody complicated, and it doesn’t need to be. So the idea is sort of first off, understand the rules, understand infrastructure, where there could be potential opportunity in terms of additional nodes, and then it’s ultimately laying out the let’s create the automation rules and the routing rules, which don’t require coding. It’s kind of refreshing.
Travis:
For sure. So we do have questions right now, we’ve got about nine minutes left if anyone has questions, feel free to just pop open the Q&A right there in Zoom. We’ll wait for them to come through. The one piece to hit on, that Nicholas you mentioned, we don’t plan on building a WMS. I don’t think ShipHero plans on building a logic engine, like [inaudible 00:51:21] managing system. So we really were excited through showing these two solutions together, how they are plug and play, and they really do focus on us kind of being that central hub, and that routing logic inventory management system, and then ShipHero really doubling down and being the best WMS that they can, as well as now even added value in the fulfillment side. So if I think there’s anything to take away from it, you’re kind of getting the best of both worlds, with a seamless integration, versus bloated ERP or something like that, where it does a little bit of everything, not so great, which we’ve seen traditionally.
Nicholas:
Yeah. And I would say something else as well, so we’re noticing more companies that are cross border. I know that’s a whole topic to get into, which we won’t. But we have a lot of customers that are trying to figure out cross border, and thinking about international shipping. So we do see a trend where companies are obviously not going to just go into a different country, or different geographic region and go out and get real estate and set up a warehouse. So you’re going to see more of this play, where it’s like we see companies out there that are using these technologies, or will use these technologies.
Nicholas:
And what we can focus on, instead of thinking about integrations and building a stack, if say you’re a 3PL or an eCommerce company, you can just think about how can I utilize infrastructure that’s out there, this technology that’s really quick to implement, and just have it solving… we see it a lot on the international shipping side where it’s being used, and cross border is a lot more complicated. But we’re seeing customers that are trying to figure out international shipping in the U.S., thinking about Australia, or Australia thinking about Europe. So that’s another area where this system can really come into play.
Travis:
Yeah, certainly. All right, we’ve got a couple questions coming through. So one of the first ones is will your platform support a marketplace that hosts multiple vendors? So certainly, that’s definitely the idea of distributed fulfillment, and having multiple vendors that can fulfill on a given order, or are just on your website. We see a lot of that today, where someone wants to build an Amazon type model where they don’t really actually warehouse much, they are basically just a marketplace. So Flxpoint would definitely handle that multi-vendor configuration. And then what we see a lot, is as you start gaining, like Amazon does, really, once you start getting data and understand what’s selling, unlike Amazon you can maybe work well with your partners and say I’d like to buy wholesale from you, versus white labeling or whatever it might be. But you can actually then say I’ve got this marketplace, it’s a quick, easy, cost effective, low risk way to get up and running. I’m gaining some traction, I’m gaining an audience, and now I see that I’ve got a lot of sales in clothing, or in shoes or whatever it might be.
Travis:
And then you can go to your vendors in those departments, and you can warehouse them, get more margin, probably get half of what it would cost to get dropped shipped, you can now get your own warehouse. So then that’s where you implement ShipHero. So we definitely do support that, that is part of kind of the Flxpoint standard configuration. For Nicholas, we’ve got one here from Marty. It says if I have my own store platform, how would I integrate marketplace products into it? So from two different people, it looks like similar kinds of questions, but how would I integrate marketplace products into it from their own store platform?
Nicholas:
Yeah, there’s an open API, so I think Developer.Shiphero.Com, if you’re looking into what your integration options are with ShipHero. It’s graph QL, and it basically allows you to do everything around inventory orders. You can use routing, and there’s web hooks for when an order status, or an order ships, there’s web hooks that you can find off there as well.
Travis:
Okay, we’ve got another that just came through. So, would you set up everything for us on Flxpoint and ShipHero so that we just run the routine? So yes, this is actually a great question. I know on our side, we have recently rolled out professional services packages where our team, that’s all they do everyday, is help configure merchants with the drop ship capabilities on our Flxpoint platform, which is helping them integrate new drop shippers in general. They’re really just kind of being experts in that, and kind of do it for you type package. Nicholas I’ll let you speak to your guys’ services if you have them, around kind of a setup?
Nicholas:
Yeah, so we typically charge a million dollars a day for setup. I’m kidding. And everybody leaves. Setup for us is just part of the process. I think it’s very important, and that’s how our teams work together. It’s very important to focus on making sure we understand what it is you’re trying to do. One of the things we’re also very good at is telling people that are looking at our system, if we’re actually fit or not. So you could have someone coming in, or you’re trying to solve a problem, maybe you’re on this webinar, and you’re trying to solve a problem. You could do that with Flxpoint, you could do that with another system that’s integrated with Flxpoint. It’s not necessarily, do you need ShipHero to do it. So we’re very mindful of making sure we’re a fit, just because no one wins when you’re trying to use something that doesn’t do the things that you need it to do.
Travis:
Certainly. Okay, so we can definitely share the presentation, we’ll be sending out an email with the recording to this. We will also send out, asking for steps on what it takes to get started. We’ve got two domains here, our two website URLs. So Flxpoint.Com/Contact, and then Shiphero.Com. Feel free if you’ve got specific questions to reach out there. We’ve got both our emails up, we can definitely help with any questions you have. I know I’m more than happy to take those emails to get you in touch with the right person. Nicholas as well, I don’t know if I just put his email up there?
Nicholas:
I can recommend good teas.
Travis:
So yeah, if you have any good tea recommendations or requests, he’s got some for you.
Nicholas:
And I just want to add Travis, that I don’t want to put you on the spot or anything, but I feel pretty bad that Eric’s picture is not up here. People are going to have to stare at my ugly face.
Travis:
You did put me on the spot.
Eric:
I’m just an example.
Travis:
He’s here in spirit. You guys can shoot us emails, you can shoot Eric an email, I’m going to put his email in right now. And so if you have any questions, we’re good there. You mentioned currency. So we do have a currency, we support Canadian currency, Canadian dollars, things like that. We’re about up, but we can run over if anyone wants to attend past the four o’clock eastern.
Nicholas:
Embarrassing questions are good as well.
Travis:
Yeah, more embarrassing. Now we’re past-
Nicholas:
Now we’re in after hours.
Travis:
Now we’re in the after hours. Yeah, exactly. We’ll grab that whiskey here in a second. Currency, do you guys have that come up at all? I know we do have the idea of setting yours in a certain currency. We don’t have the conversion yet today. Do you guys ever have to touch on currency at all, Nicholas?
Nicholas:
So we’re essentially… yes, so we have different currencies. We’re only showing the numbers that come in on orders. We’re not an accounting platform, so we do things such as cost of goods, sales by SKU, dollars spent on shipping. But the currency is something that you set, but it’s not like I think the same as what you’re saying. We’re not doing any conversions. And as far as [inaudible 00:59:59] as well, so there is no French version. Unfortunately at this point, it’s American/English only, so even I get confused at times.
Travis:
So Zs, no Ss.
Nicholas:
They say things very weirdly.
Travis:
Cool. So the last question we’ve got here as of right now, I’m new to ecommerce, been drop shipping a little bit on Shopify. Really at what order threshold should I adopt this software? So if you’re not warehousing anything, then obviously no need for WMS. From a Flxpoint perspective, we typically say, just internally if you’re not doing 100 orders a month, it might not make sense. With that said, if you are doing 50 or 60 orders a month, and it’s too much to handle, then there’s the possibility that you could use it. But it really starts adding a ton of value at 100 orders a month. We have customers doing tens of thousands of orders a month, and they get a ton of benefit out of the platform, obviously, in automating those orders.
Travis:
But I would say don’t pay for anything you don’t need, until you get to the point where really, I think both our software platforms are all about helping you scale, and so when you get to that point, that’s when you’d really want to kind of reach out and get a demo, or whatever it might be.
Nicholas:
Yeah, and I would add that ShipHero, it is really comprehensive. So there’s economies of scale, and also it’s not as cheap as ShipStation. So if you’re doing lower volumes, I’d say don’t consider ShipHero as your warehouse management system, if you’re doing typically under 50, 60 orders a day. Just because maybe at that scale, especially if you’re using Flxpoint, there’s a lot of stuff that you’re already figuring out, and automating, and again it can come down to the complexity of the orders, but you may not need the dynamic slotting, and all of the bells and whistles that our WMS provides. And we speak to customers, we speak to people that are trying to figure this out, and we’ll be very honest about it. So feel free to reach out, we can chat.
Travis:
And if you’re just starting, like Nicholas said, there’s great platforms like ShipStation. Inventory sources are our sister company, it’s really for the more S to B, just getting started. So inventory source plus ShipStation integration is probably more suitable if you’re in that low order volume. And as you scale, as you get up to these higher order volumes, looking at Flxpoint and Ship Hero kind of configuration, probably makes the most sense.
Eric:
I would just like to chime in too. You guys are correct. However, it really depends on what your goals are as a business owner, too. If you’ve got deep pocketbooks, and you’re hiring employees, and you’re throwing a bunch of money into marketing, if you can afford it, and you think you have the market, and you’re going to be able to get the revenue eventually, you can go for it and see. Because that’s going to give you the best chance of success, and there’s nothing wrong with just trying it out, and seeing if you can get there. And then going back to something less expensive, if it doesn’t pan out.
Nicholas:
And so I think the good point that you have there Eric, is if you have employees, so that’s really… We have regular conversations with people that come into this and say what’s your price? Why are you so different than Shipstation? And I always, as a founder of the company, and we’re building all this functionality, and we’re looking at these very expensive platforms, and we think we’re competitively priced. But it’s a good question, but I always had difficulty answering it. It was like I don’t know. The economics of building a team, and building a company. But I think to your point, definitely looking at how much you’re spending in terms of labor, and infrastructure, and sort of general operations. And then looking at these tools, and doing that analysis. And a good example is for 3PLs.
Nicholas:
So we have a billing functionality software for 3PLs. So because everything is happening digitally, everything gets tracked, and you put fees to everything. That’s how 3PLs work. If you pick something, if you pack and ship, there are fees for that. One of the most time consuming things for 3PLs that we came across, was you had someone that had to figure out from spreadsheets, and all sorts of different data sources what the bill was going to be, what the invoice was going to be for each one of the customers every month, which we found very fascinating. So, by automating that, you have a person instead of being super slammed for two weeks of the month, now they’re super organized, the system is automated, they’ve got all the invoices out within a few hours, and now their focus is maybe they’re doing relationship management.
Nicholas:
But you definitely have the ability to look at a cost model and say what am I spending? How much productivity do I have with my employees? If I need to grow, do I just keep adding more employees at the same rate, or can I grow without having to spend over here? That is a good point that you bring up, yeah.
Travis:
Certainly. Well, I appreciate everyone’s time today, for joining the webinar. It will be recorded and sent out if you want to share with any of your team members.
Nicholas:
Did you see that? The question that Jamie has. Sorry Travis. So tax, first off he shouted that, so it sounds more like a statement, and we all have to deal with it. So I know that in ShipHero again, we track all the information on the order that comes in, so it’s a line item, we’re tracking that. If you’re creating purchase orders or anything like that, you can add that information. And if it’s more of a statement, yeah tax, bloody hell.
Travis:
Yeah, same here. We’re going to pull in the tax from the sales channel and pass it on through. And it can be converted through a rule at any point, if necessary, to pass it on to the WMS. Okay, great, we got tax in.
Nicholas:
Yes!
Travis:
We hit our goals. Well hey, thanks again Nicholas, Eric, I really appreciate it.
Nicholas:
You’re welcome, thank you Travis.
Travis:
This was great. We’ll send it out. And thanks again to everyone else, y’all have a great day.
Nicholas:
Yeah, thank you everybody.
Eric:
Thanks. Thanks for having me.