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Unprepared Ep 11 - 3PL's, Ecom Growth and Understanding Your Customer with Casey Armstrong

Timestamps

  • [00:00] - Intro
  • [00:47] - What is 3PL?
  • [01:33] - When should someone look into a 3PL?
  • [02:21] - How 3PL helps with customer service
  • [03:47] - Impact of the pandemic on businesses
  • [05:43] - Advice for the direct consumer in Ecom
  • [07:46] - Expectations and changes in the future

Resources:

Key Points:

  • ShipBob is a tech-enabled 3PL (third-party logistics). They fulfill Ecommerce orders for direct-to-consumer brands.
  • ShipBob stores a customer's inventory, pick it up, pack it, and ship it to the end customer. 
  • When a customer wants a custom boxing, they compile all that they need in one place and ship it. 
  • For example, their customer manufactures in the US, they can just ship it directly to their 3PL and the 3PL will take care of all the transactions so there's no need to touch the goods. 
  • Using 3Pl will depend on each business and operator, but it is best to look into partnering with 3PL like ShipBob before things start to impede your business growth. 
  • ShipBob does return and exchanges, but not actual customer support. 
  • ShipBob's partners provide them with historical data depending on their size which helps them identify how the inventory should be distributed. 
  • Identify where your customers buy, and where should you split your inventory to get your products to the customer faster and more inexpensively.
  • There was a slight dip then a massive surge when the pandemic happened across ShipBob's customer base. 
  • Apparel, beauty products, and food picked back up while jewelry is declining. 
  • More people are shopping online for entertainment, beauty, apparel, and food. Meanwhile, jewelry sales are declining. 
  • Understanding your customer as well as possible is the core basics of all of them. Having an understanding relationship with them is important now more than ever.
  • There's a shift in people moving from Amazon to buying directly from brands because they can also provide the same shipping experience.
  • People can also get the same level of shopping experience since brands are running mobile-optimized and easy to purchase systems via digital wallets. 

Transcript

Chase Clymer  

Hey everybody, welcome back to another episode of Unprepared. I finally figured out how to make this thing work again. Took a few days off. 

So now that we've got it working, I would love to welcome to the show, Casey Armstrong. Casey is coming to us from Sunny Orange County, Orange County, California. No edits in this one, just going raw. And he works...he's a CMO at ShipBob. Welcome, Casey.

Casey Armstrong  

Thank you very much. Unprepared. Perfect name for this.

Chase Clymer  

Yeah, You see normally I take the towel off my door, but it's gonna be in this video so who cares?

Casey Armstrong  

Perfect.

Chase Clymer  

Awesome. So ShipBob, for the folks that are unfamiliar, what does ShipBob do?

Casey Armstrong  

We are a tech-enabled 3PL. And so what that means is we provide that one day, two days, and three-day shipping and fulfillment experience for direct consumer Ecommerce brands.

Chase Clymer  

Okay, so explain a 3PL for some of our younger entrepreneurs that are just getting into the game

Casey Armstrong  

Perfect, 3PL. Third-party logistics. And so we actually store your inventory and we pick and pack and ship it to the end customer. And then also, let's say you have custom boxing, different types of kitting needs that you want custom inserts, we compile all of that in one place and ship it out. And so let's say you manufacture in the US or you manufacture in China, you can just ship directly to your 3PL, and take care of all that for you so you never actually even have to touch the physical goods.

Chase Clymer  

Awesome. So here's the question that I want to get from you. So one question I'm gonna have that I actually had prepared, which is when as a brand...when is it necessary or not necessary, I say when should it be a good idea to start looking into a 3PL. 

Obviously, there's probably a range where it doesn't make sense. So what are the kind of metrics or KPIs that I should be looking at within my Ecom business? Where it's like...what it might be the time to make the jump over and connect with a partner such as ShipBob?

Casey Armstrong  

I don't think there's like a specific number. I think it depends on each business and operator. But once it starts to impede on the growth of the business and what you do best, so let's say product development, marketing and sales, so running your actual business and driving revenue, I think then that's when a little bit before you get to that point is when you should start evaluating a 3PL partner.

Chase Clymer  

Gotcha. And now with a partner, do they help with...I think a lot of the stuff that happens on the back end with logistics, almost goes in with customer service as well. So are there some relationships that also help with customer services like returns and exchanges and wrong sizes and whatnot?

Casey Armstrong  

So we do returns and exchanges. We don't do the actual customer support. You know, there's great technology out there focused on Ecommerce in general for support. There are outsource support companies as well. From returns and exchanges and all that. And then also additional things, before people start with us, they'll often provide us with historical data depending on their size, one to six months of data. And that helps us identify where and how they should distribute the inventory as well. 

So right now we have nine fulfillment centers across the US, one in Canada, just or early next month, we're launching one over in Europe. And so it’s identifying where your customers buy, and where should you split your inventory. And that's important because then you can get your products to the customer faster and more inexpensively as well.

Chase Clymer  

That's awesome. So I launched this six or eight weeks ago, I don't know I've done a lot of them. And it was because of what's going on in the world with the pandemic and how it's impacting the economy and specifically Ecommerce. 

So now that we're into the new normal, I hate to say it, but it's where we're at. What have you seen on your end of how it's affecting Ecommerce businesses or maybe even just the businesses that you work with?

Casey Armstrong  

We've seen...so once the Coronavirus I think really started to hit within the US, and not hit as like when the virus came in, but when people started to realize the impact it was going to have in the US and globally. Across our customer base, there was like a slight dip. But then since then, we've just seen a massive surge. There are certain verticals that are overachieving, there are some that are down. 

For example, apparel was down for quite a while and we've seen that pick back up. Items like jewelry continue to be on a downtrend from what we've seen. Some that you would just intuitively expect to be on the rise such as food, we've seen a great increase as well. And then there are some that I'd say somewhat unexpectedly, we've seen do quite well, such as beauty and wellness brands as well. 

But especially since we can't go into physical stores, naturally, people are looking to shop online. And so it's interesting where it's been this accelerant on Ecommerce which has been growing extremely well, year over year for the past, let's call it 20 years. 

And I think this just really poured fuel on the fire. Another thing that's been kind of interesting as well is because people can't go to see sporting events or to the movies or to the bars or really, honestly, outside to do things with their friends. I think Ecommerce has also become a way of entertainment for people as well. And so people are just purchasing a lot online.

Chase Clymer  

Yeah, it's been a wild ride to watch it from our end. We've got a few customers, clients actually, in the beauty space, and those sales are just out of control right now. So as a CMO. Everyone likes marketing advice, you know what I mean? So I guess what would you say is...

Casey Armstrong  

To give marketing advice via, keep going.

Chase Clymer  

I mean, I can offer...all the advice I give is straight-up just an amalgamation of every book I've read in every interview I've done, and just every person I've talked to. So with that in...what is the piece of advice that you think is super impactful for the younger direct consumer in Ecommerce brands?

Casey Armstrong  

So with my role, you know, we're growing ShipBob, and that's more of a b2b business. A lot of those same things can be applied to, let's say, direct to the consumer where you're sending someone more to them, because at the end of the day, though, is to an individual. And so I think understanding your customer as well as possible, it's just...that's just like the core basics of all of it. And I think especially during these times, having that relationship and understanding your customers better and cultivating them more...there's never been more important than now. 

But that same idea is going to persist and that's never going to go out of style. And so I think that that's where people should always start. And people I think often start looking at different tactics or hacks are things they can do to grow, let's say top of the funnel and maybe get a lot of different vanity metrics. But you need to understand your customer first and foremost, and then everything else will become a lot easier.

Chase Clymer  

Yeah, that's great advice. It's usually...I found a product half the time, they haven't really seen if they have product-market fit, which is something you should definitely do. But by doing that, it's like interviewing actual customers. 

But people immediately want to go like, "I can make a million dollars on Facebook ads right now". It's like, yeah, but you don't understand your customer, you don't understand they actually want this product, you don't understand the values and benefits and features that you are featuring on this product actually matter to the person you're trying to sell it to. The only way to get that information is to talk to your customer.

Casey Armstrong  

Mm-hmm. 100%. 

Chase Clymer  

So, Casey, we got about two minutes left here. Is there anything that I haven't asked you today that you think would be worthwhile to share?

Casey Armstrong  

So obviously, I don't know what the future holds. But I think what's going to be extremely interesting for us in Ecommerce and the direct to consumer space...will the end consumers become more receptive and open to buying directly from these D2C brands versus larger marketplaces such as Amazon or Walmart or Target? 

And from our view, you see, and like I ordered something on Amazon. What was this... back in March. And Amazon is just one of the most well-run companies out there. And it said this product will be delivered between like May 24, and like June 15. And I'm like, what? This is Amazon. And they've also stopped allowing people to send nonessential, they're starting to open some things back up a little bit more. 

But we've seen a shift in people moving off of Amazon started buying directly from the brands because we can still provide that Amazon level shipping experience. And so what a lot of these stores have been able to do through technology such as let's say Shopify and Ecommerce, and they've got their stores up and running mobile-optimized easy to purchase, then you've got the digital wallets, PayPal one click, Shopify payment program and Amazon's one click. And so you're getting that full Amazon level purchase experience upfront. But it was always that fulfillment aspect which is broken. And so you checkout in two seconds, but then it's going to take two weeks to get there. That doesn't make sense. 

But there are a lot of these brands able to bridge that gap now. And so as we see people, one wanting to look for small businesses more. And then also, I think becoming more familiar and comfortable buying directly from these brands versus from Amazon or the large marketplaces. I'm very interested to see, even if it's just a slight uptick if that helps accelerate the growth from these direct consumer brands.

Chase Clymer  

Yeah, I'm super excited to watch what happens in the next couple of months and years. Casey, thank you so much for coming on the program.

Casey Armstrong  

Yes. Thank you.

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A few weeks ago the world changed forever. Every business, every entrepreneur, every single person was unprepared for the sudden change we'd all experience. I'm going to use this time to create content focused on what you can do right now to help your business grow. We're all in this together, we're all unprepared.