Today’s episode is about going from running your business out of your home to a warehouse. We have our own growing pains stories on this topic, so we hope we can help those of you ready to move.
The key factor to maintaining a warehouse is efficiency. A lot of things go into making sure your operation is efficient. You need to make sure the items are safely packed for shipping (which is harder than you expect) and that your inventory can keep up with demand. We’re going to share with you some of our fixes for these problems. As well as what has worked for us, and what hasn’t.
Topics we discuss in this episode:
- Grant’s trial and error experience with packing his cutting boards.
- The importance of keeping shipping damage low
- Mike’s decision to move into FBA through Amazon
- Working with Amazon
- Finding a good fulfillment software
At the end of the day it comes down to what you need to make your business work. Some of our suggestions are pretty pricey for a start-up, but for middle tier outfits it might be a solution. Efficiency is the keyword today and hopeful we have given you some great resources.
Resources Mentioned During Today’s Episode:
If you have any questions or anything you’d like us to discuss on the podcast please go to ecomcrew.com and fill out the contact form. Also we would really appreciate if you would leave us a review on iTunes. Thanks for listening!
Full Audio Transcript
Mike: Hi, this is Mike.
Grant: And this is Grant.
Mike: And welcome to this week’s episode of the EcomCrew podcast. First off, want to apologize for missing an episode here. Grant and I have been doing a lot of traveling and our ColorIt brand’s been exploding in a good way and it’s just been absolutely crazy so we did miss an episode so we apologize about that but we’re back on track here and hopefully over the next several months, we won’t miss an episode. We have a really fun topic this week: the evolution of going from your garage to a warehouse and beyond. Grant and I have been doing ecommerce now for about three years and we’ve gone from doing just pure drop shipping to running our initial ecommerce stuff out of a warehouse and then a small shared office space that we had and then going from it to another warehouse then to another warehouse. And then Grant also has a warehouse up in Seattle. So we thought this would be a fun topic to talk about this week because I’m sure some of you listening to this podcast are in the middle of “I need to move” and things to be thinking about. So with that, I’m going to turn it over to Grant, let him kick it off this week and we’ll go from there.
Grant: Okay. Thanks, Mike. Yeah so this topic’s near and dear to us because, as an entrepreneur, I believe everyone at some point has started off working at home or literally in their garage in most cases. And in ecommerce, it’s such a tempting, tempting business model because your garage is essentially almost free room and board for all of the products that you store, and for a lot of companies you don’t need an army of inventory taking up 2,000 square feet. If you’ve got 500, maybe even 400 even 200 square feet in your garage, hey, that’s a little opening to get started. So there’s definitely a massive jump in the level of, I would say, competency it takes in order to learn how to properly do inventory management when you’re just shoving stuff into a few racks in the garage to actually running a true, real warehouse.
And Mike and I have both really evolved from that stage and with Treadmill.com, like Mike said, it was really a drop ship operation and it was really nice and easy minus the customer service and everything like that because we didn’t really have to control that much inventory. And Cutting Board was really, I would say, our first experiment with now having real goods. But Mike actually did have a pretty good eBay business back in the day and what did you get, Mike? Like a container of poker chips or something like that?
Mike: Yeah, we had a container of poker chips delivered to my townhouse once upon a time, which was an interesting day. With no lift gate, yeah, it was interesting. It was supposed to get delivered with a lift gate and palletized, but they actually just dropped off a tractor trailer not even a container on the ground. It was a very long day, let’s just put it that way, getting that thing unloaded and stressing out about the HOA flipping out about having a business running in our townhouse.
Grant: Oh my God. Yeah, that actually reminds me too of my days back in the poker day when I ordered something like 10,000 books and, yeah, same thing. I didn’t know anything so the guy didn’t even show up with a lift gate so I had to take 10,000 books off the back of a truck. So I gave that guy like $40 to not get yelled at by his dispatch or whatever. So –
Mike: Books don’t seem that heavy until you like throw 50 of them in a box.
Grant: Oh no, man. They seem heavy after the first pallet. I was crying a little bit.
Grant: So yeah, we actually decided to go with this topic because I just most recently had a phone call because I managed to order my very first container and it was a bit of an evolution from getting up from just pallets here and there. And I literally had this call saying, “Hey where do you want your container delivered?” and I said, “You’ve got to be kidding me? I’m only able to take pallets.” And it was a long string of errors that got me to that point. But it was one of those things where everybody kind of learns a really hard lesson at some point and really the only way that you learn is from that lesson. So stepping backward to talking about where our main topic began, which is the evolution of being essentially a small-time guy to running and operation.
So talking about some of the things that we are really learning is one, the warehouse is going to be organized, but really the number one thing that you’re trying to do is keep a very efficient operation in terms of getting things in and getting things out the door. And a lot of people worry about where to stack things, where to put things and I think Mike can get into that. To me, I tend to think that the number one thing to really worry about is how does your warehouse help reduce your shipping cost? And to me, everything is all about getting the right size boxes, the right size type of containers, and right type of packing materials too. And I can only speak for Cutting Board because Mike’s got a very different business with the ice wraps and ColorIt, but with Cutting Board, we actually thought when we were getting into this we were going to get a product that couldn’t really be that easily damaged but the reality is that it can be damaged quite easily. It’s a heavy item and it’s made of wood and there’s a bunch of soccer players that work at every shipping company that we know of. So –
Mike: Yeah, it was definitely a little wake-up call when we were originally doing the shipping for Cutting Board. As you were saying, man, you think it’s a heavy, solid block of wood but the reality is is that if you drop it from 10 feet up on concrete, it can dent the corner or crack it even, and somebody buying a $100 cutting board isn’t going to stand for a chip in the corner, which is really frustrating when you’re making 50% margins and 25% on top of that to ship is and what do you do then? It’s like a bad problem to have when you’ve gotta like take it back or send another one. You’re going to absolutely lose money on that. It’s pretty frustrating.
Grant: Mm-hmm. Big time. So one of the things that we’ve really done is the warehouse is that we’ve taken a really big step toward carefully packaging everything. And I don’t mean like going through every inch of the board and making sure it’s completely well-packed, but for example, when we first started off – this sounds almost absurd but because there’s so many different sizes of cutting boards, we had sheets of cardboard and they would be cut to size and the boxes would be built and they’d look very nice and pretty, but it simply took a lot of labor and a lot of time. It didn’t scale. So at one point, I went to U-line, got a bunch of standard size boxes that were going to be about $1.50 to $2.50 apiece that could adequately fit a cutting board. Got those and got a big roll of butcher paper that I could use, wadded up the paper. It takes a lot of butcher paper to wad up underneath a cutting board. I mean I’d be rolling out like 20 feet at a time jamming it in there, put the board in there, jam a bunch of paper inside, put the butcher paper on top, and then actually to be fair, it actually had a very low damage rate. But it probably took a good four to five minutes to pack up every single box. And when you’re a small operation and you’ve got multiple shipments going out per day or during the holidays, we’re talking dozens upon dozens, you can’t spend 5 minutes per box.
So the overall cost was low in terms of material, but the labor cost was high and you’re spending a lot of time, which is a complete no-no. You’ve got to scale. So the second evolution of that was, “Let’s go with the foam corners that you use for picture frames and whatnot.” So we got foam corners and they took up a lot of room because they’re three-dimensional objects and they look just like if you took a cube and cut it diagonal down the side. So it protected the corners pretty well, gave a lot of decent protection, and they were about $1 apiece, so the cost went up quite a bit but all I do is I grab a set of four corners, I stick them on the board, shove them in, add a little bit of wadded paper and voila. It’s done. I found out though, especially during the holidays, that there’s a lot of crush weight that happens. So the foam corners prevented boards from kind of rocking back and forth and having impact damage, but because it created a little bit of elevation underneath the board, if the box had anything that was what I’m guessing is over 200 pounds because that was the weight limit on the boxes, it just got crushed and broke it in half.
Now, of course, we could fill out a claim with UPS but that literally takes about 30 to 40 minutes to get this done, going back and forth to the UPS and finding the invoice and printing things out and it was a complete waste of time. And I hate working with UPS in terms of getting claims done. It’s just maddening. I think Mike would agree from the treadmill business. Like how much time did you think we spent on that, Mike?
Mike: I mean it’s probably like 20 to 40 hours, and I’m not even exaggerating, like per claim. And that was through UPS Freight but I mean they make it impossible on purpose. You know, they basically want you to give up. I mean every single time it’s like, “Oh, we didn’t receive your fax. We only received part of your fax,” or, “This field wasn’t filled out properly,” or “You’ve got to show us a receipt of some sort from the manufacturer from the original time. You’ve got to show us the original BOL,” which like obviously they have the BOL. It’s their freaking BOL. I mean it’s just like always something and it’s like, “Oh, this is in such and such department but we’ll follow up on that for you,” and if it wasn’t a $3,000 piece of machinery that we were trying to follow up on, we would’ve just given up on it but yeah, they made it really difficult and it’s one of the reasons why I appreciate now selling cheaper items. You know, a $15 coloring book that costs us a fraction of that, it’s like, “You know what? I’m just going to throw it in a trash can and not worry about it or move on.” But it’s hard to do that with cutting boards. I mean it’s kind of over that threshold of, “Ah, I don’t really care.” So it’s not the best of positions to be in.
Grant: Yeah. And this is actually one of really the new paradigms that I’ve been kind of experimenting with. I’m actually kind of taking a little bit from the Nordstrom mentality and the Zappos mentality and applying a little bit of business logic to it, but like Mike was saying with cutting boards, when you’ve got a $100 board, you kind of don’t want to just give up on an item that gets damaged for example or that somebody wants to return. But I’ve kind of realized like when I take into the account all the customer service times that it takes – and I’ve got an employee that sits here and answers customer service questions and everything but the guy gets paid about $16 to do customer service and if it takes him an hour to go through – you know, we’re talking complete, start-to-finish emails working with UPS and all of this to resolve and issue, it’s like $16 plus taxes and everything and then no one’s really happy at the end of the day. The customer’s not happy, we’re not happy, and our margins at the end of the day are only around 20% so it leaves us with like 4% margin.
And at some point you think, “Well, maybe I just ship out another item and be done with it.” I mean that’s not a great answer, but at some point I’m not making money by trying to save money if that makes any sense. And it’s something that we’re really trying to grapple with and I don’t have a firm answer but I’m really starting to lean toward the point of just offering somebody the free item if it gets damaged in shipping or whatever for that reason; that it costs us too much time and effort just to deal with it that we just give them another one. And I know a lot of very service-oriented businesses think that way because the time and effort it takes for you to deal with it is just not worth your time.
So going back in terms of packing: so we’ve gone from foam corners (because, again, they caused split boards) to completely wrapping them in bubble wrap. And we use very thick bubble wrap. We just wrap the hell out of it. It’s faster than the butcher paper but it’s around the same cost as the foam so it’s kind of the worst of all worlds. Not worst of all worlds, I should say. It’s expensive and it takes a little bit of time but it provides the highest level of protection and I think at the end of the day, if it saves us from shipping claims in the future – and it can’t permit everything but if it saves on a lot of claims – it takes a lot of hours out of the day on the back end. And this won’t apply to all businesses. Like for Mike’s business, I don’t know what your damage claims are, Mike, but I’m imagining it’s pretty low?
Mike: Yeah, on Ice Wraps, we basically never get a damage claim. I mean they’re just hard to damage. And on ColorIt, I should say we do have every now and then because we have those metal bindings (it’s a spiral binding), those’ll get dinged up. And we do the bubble wrap thing as well. It depends on the shipments. So if we ship one book, we have a box that actually will fit three up to three books. So if we ship one book, we bubble wrap it because it kind of can jostle around inside that box, but if we ship two or three books, we just stick it right in the box if it’s good enough in there that it holds up pretty well. And then the box that we use it’s a flat box, but we have to kind of assemble it by folding it in certain ways if you can kind of envision that, and then it has a lid that lifts down, but on the sides, it’s actually like quadruple corrugated cardboard because the way that the side folds over, you actually end up with like quadruple corrugated cardboard on the sides, which is exactly where the spiral binding is.
Mike: So it takes a lot to damage it but it does happen and obviously if someone’s buying a $16 coloring book and they complain that it’s damaged in any way, we’re just going to send them another one, which hurts, but it’s such a low instance of that that it’s not even worth talking about almost at that point.
Grant: Mm-hmm. I think that’s actually one of the great parts about having a high-margin item, which is that you can do that and not like think about it and just go, “Okay I make so much profit that I’m just going to send out another one.” And with Cutting Board, like I was saying we’re really moving toward that route just so we don’t deal about it because at the end of the day, really what we figured out with the warehouse is that in order to scale your business, a lot of people are going to let the warehouse get in the way because they’re going to try to figure out ways of saving money in the warehouse, whereas your true goal – and I say with a little grain of salt depending on where you are in the progression of your business, but my true goal right now is for the warehouse to be as fast as humanly possible. And I don’t want to spend any time in the warehouse. I want to go in there, tackle all my stuff, and have it out the door as fast as I can, as safe as I can so that I’m not hit up with customer service issues later.
And that’s also why I used a 3PL on the East Coast. It takes almost half my orders off my hands because if I’m going around trying to save money by packing boxes myself instead of having my employee, I’m not growing my business. Or if I’m trying to like save by using butcher paper maybe I save $1 per box and it takes me five minutes more. If I’ve got 10 orders during the day like that I’m using butcher paper on for cutting boards, like what am I doing? I’m just trying to save a little bit of money by having an employee do it? Like no, me and my employee, we’re trying to grow the business.
So I’ve been doing a lot of talking, but I’m going to hand it over to Mike because Mike’s been growing by leaps and bounds and he has his own opinion on this too.
Mike: Yeah, I mean we’re obviously trying to do the same type of stuff as you, Grant. I mean we’re trying to be as efficient as possible and we’ve got a lot more sophisticated with it. I mean we’ve brought in a lot of different box sizes, for instance. We sell these therapeutic helmets that are square and they don’t really fit into any USPS boxes so we’ve bought boxes off of
U-Line just like you have for those and try to get as efficient as possible. We’ve also got our shipping cost down as much as possible by using the best size box and things of that nature.
But the thing that’s probably made us the most efficient this year as we move into a new warehouse that’s twice the size of our old one (we’re in 3,000 square feet now versus the 1,600 square feet we were in) and the biggest efficiency we’ve picked up is just not having to move stuff just to like move stuff again. You know, so we would get a shipment in and it’s like, “Oh gosh, we’ve got to get this stuff off of the pallet, up on a shelf just so we can get stuff off of the shelf and onto a pallet,” you know, because we didn’t have room to stage things. And we’re sending about three pallets a week of stuff to Amazon right now. Two or three pallets a week on average to Amazon depending on the week and that stuff takes up a lot of room. And now, with the extra room that we have, we basically just have pallets all over the place in the warehouse with stuff on top of them and we have a pallet jack now so we move – you know, our books are really heavy and take up a lot of room so we leave them just on the pallet instead of having to like take them off the pallet, put them up on shelves just to get room.
So the space savings has made things efficient, but one of the biggest things that’s happening right now we’ve been shipping 200, 300 orders a day, especially on a Monday now. It’s actually even – I think this Monday we had almost 400. And we’ve really just exhausted the manpower that we have in our facility is really what it comes down to. And we’ve really made kind of the bold decision to move to FBA fulfillments. Realistically our business is not fulfilment. You know, it’s not what my core competency is. I would say my core competencies are marketing and SEO and PPC and Facebook ads and building a website and customer service. Those types of things are the things that I’m really good at and shipping out individual items is not really something that I would say that I’m good at. I’m not going to be as efficient as Amazon’s going to be in their warehouse. I mean they’ve spend billions of dollars in infrastructure, hundreds of millions of dollars per facility to be as efficient as possible, and we just can’t compete with that.
So what we’re going to do is just move all of our fulfilment off to Amazon and turn our warehouse into that cross-dock/staging area for when things do come in from China. We’re also going to be doing some assembly unfortunately. Not something that we really wanted to do, but it’s something we’ll talk about in a future episode. It’ll be a hair-scratcher for everybody but we have a couple containers, a 40-foot container and a 20-foot container, coming in that we have to then assemble the items and get them out to Amazon or to a fulfilment center and we’re going to just use our facility to do these types of things instead of trying to deal with the transactional, one-at-a-time, getting stuff out of the warehouse. I think we’ve kind of outgrown that and the reality is is that we’re in a very high-rent district in Southern California and employee costs are also incredibly high down here, and for us to continue to do it ourselves, the only answer is to hire another employee right now and eventually, the next stage would be we would have to move, and we just signed a two-year lease with a two-year option and my goal was to stay put. I don’t really want to have to move again.
So the reality is is either we’d have to like renegotiate with our landlord to move someplace else in this industrial park or break our lease to go to another one and that could be like an every 6- to 12- month endeavor. That’s one of the challenges when signing a lease as an ecommerce business. Like you hope to grow, you hope to get bigger, but these leases are – I can’t negotiate a lease for less than 12 years. Maybe someone else out there is a better negotiator than I but if you want a decent rate and you want the stability to have a warehouse, they’re going to want you to sign at least a two-year lease. Really three years is the real minimum that you’ll hear out there, but we always can seem to get it down to two but I just don’t wanna be moving every couple years and the reality is is that we can I think work smarter and more efficient here in this office, in this operation, by doing FBA fulfilment.
And the good part about that for us, there’s actually other efficiencies and things that come out of it. I mean number one, we’re already selling all of our products on Amazon anyway so this consolidates our inventory pool. And right this minute actually we have an issue where we’re out of pencils, our coloring pencils, in our California warehouse and we have plenty of books here, but we have no books left at Amazon right this minute because we were having some inventory constraints supply constraints, so we’ve actually outgrown our supplier and they’ve had to hire some more employees and get another printing press to keep up with us. So we ran out of books at Amazon and we ran out of pencils here. So when someone orders books and pencils together, now we’re sending two shipments out. Incredibly inefficient. So if we have all of our inventory in one pool at one time, it obviously can help not have that problem and hopefully long-term this’ll be a really good thing for us.
And just one final thought before turning it back over to Grant: the other thing it’s going to do for us is just consolidate our shipping cost. I mean instead of the supplier sending it to us and then us sending it to Amazon, or the supplier sending it to us and then us sending it to the customer, we’re going to have the supplier send it directly into Amazon and we actually already have 4,080 books – I know it sounds like a weird number, but that’s just how they come case-packed. So we have 4,080 books that are on the way to Amazon right now as I speak and it’s a much cheaper endeavor. We’re sending directly in there and then amazon actually ships them cheaper than we can ship them ourselves. I mean the only real downsides I can come up with for doing FBA, fulfilment is A: we can’t put our own invoice and collateral on the box, which does frustrate me. But we’re doing a good job with email marketing and communication that way so not having the receipt in there is something I’m willing to give up. And the other downside is Amazon can take 24 to 48 hours to get you a tracking number, and that’s something I’m having a hard time getting over because people don’t like waiting for our tracking number. they think that you’re not shipping their item. And the way that we’re getting around that, we’ve already updated all of our emails that go out. We’ve made it really clear to people that actually do read. That’s always a challenge. But if they do read –
Grant: Oh yeah.
Mike: Grant knows what I’m talking about.
Mike: I’m sure everybody listening to this podcast knows what I’m talking about, but they do read the email and we put it up in the top of the email that your tracking number could be 24 to 48 hours from now and we’ve increased the expectation on our shipping times to 4 to 10 days for free shipping, which is quite a while, but we realize that A: you know, people are willing to wait for free shipping because it’s a product that you just can’t get anywhere else. We’re not selling the same [inaudible 24:24] cutting board, for instance, that Grant might be selling where people can go buy it faster from somewhere else. We have that luxury and we do offer an upgraded shipping speed so if the person wants it they can pay and get it quicker but we’re just trying to set expectations properly with our customers. And the thing is Amazon actually gets it to them quicker than when we ship it. Like the total time between when we place the order with Amazon and it gets to the customer because they’re shipping it from a local center.
So yeah, I mean it’s going to be a big transition for us. It’s another part of our evolution. We’ll see how it goes but after evaluating several 3PLs in this situation, we kind of landed on Amazon FBA and Grant, maybe you want to talk about – I know you’re doing some 3PLs to kind of augment your business as well and I know that helps with efficiency as well for you.
Grant: Yup. And with the 3PL, we chose somebody that was a little bit smaller. Me and Mike both had done some investigation with some of the bigger companies out there like Shipwire, and then another one, I think it was Webjistics. Sometimes with the bigger 3PLs, I mean you get a lot of benefits because they might hook directly into Shopify or Bigcommerce or whatever backend you use, and I’m going to talk a little bit more about that too, but I ended up choosing a kind of smaller but not medium-sized 3PL on the East Coast that was essentially willing to do like custom whatever I wanted them to do because I had specialized shipping needs. And a lot of companies will tell you, “Yeah, yeah, yeah. You know, we kit and bundle, we do whatever specialized needs that you have.” I’ve talked to a lot of those companies and a lot of them are just – you know, it’s kind of lip service. Nobody really actually does it, and those that do often charge a very, very stiff premium or they need like a high minimum so I kind of lucked out, I thought, by finding this company.
And so they ship the boards just the way we want them. They put a packing slip in there, which, to me, is very vital. I put like a coupon code in there for a second shipment, or a second order rather, and everybody in the industry knows your reorder rate should be at least 25% if not more. I think Mike with ColorIt – I mean it’s such an emotional attachment item that it’s probably much, much higher than 25%. I have products that are used for maintenance, such as board oils, so it’s very valuable to have that. So I actually have a very nice printout that comes with every order talking about how to take care of your cutting board with directions on there and it says how to do it with the oils and it kind of almost is meant to make you feel bad that, “Hey, I didn’t order any oil with my board. Maybe I should. Maybe there’s a coupon here. Ah, that’s a good idea.” So it’s a really, really important part of remarketing to your own customers, which is a massive, massive marketing cost savings because it costs so much to acquire every customer that you have, so you should really take advantage.
And so for me, the reason I don’t really use Amazon is one: Amazon is very bad at not damaging cutting boards. They have a lot of damage. I wish I could get into details, but Mike’s seen my Facebook posts where I just go off the handle with pictures of thousands of dollars’ worth of damage. And that was my Amazon FBA experiment and my answer is don’t ship anything that you don’t think and survive a good kick in the side on Amazon unless you wrap it first in your own product. And I actually have future plans to go back onto Amazon, but it’s going to be with very, very industrial production on my stuff.
Mike: One thing that we’re lucky with, just real quick, Grant, on the FBA thing, I mean Amazon obviously got their start doing books. And they, first off, have cheap rates for any type of media item, which obviously, our book qualifies as so we get these incredibly cheap shipping rates. But they have like special packaging, if you will, for books. Like I actually have ordered one of our books off of FBA just to see how it comes to make sure that it can’t get damaged and they like put it in this like special kind of book box that gets shrink-wrapped internally and then there’s like a cardboard around all that so that it’s almost like an air pocket inside the box, which really protects our books quite nicely, which is nice. We’ve kind of lucked out from that perspective.
Grant: Mm-hmm. I wish they had that for cutting boards.
Grant: Life would be much easier.
Mike: I know how they ship a cutting board. It’s in a box that’s like 3,000 times the size it needs to be and they put like two pieces of that like bubble thing in that that crushes and pops the second the cutting board ships and then the thing shows up all banged up.
Mike: That’s probably how I’d expect them to ship a cutting board.
Grant: Yeah, that’s exactly how it works and I actually have a bunch of – like a random item that I had was some marble paper towel holders and the listing actually got cancelled off of Amazon because the breakage rate was getting close to 70%, which is frustrating to me because that means I couldn’t take it off Amazon safely because I knew that if I even tried to send it back to myself so that I could at least try to salvage it on eBay or something, 70% of them would probably come back to me broken as well so I just took $500 of inventory and just hit the “Dispose Of” button and so Amazon charged me to dispose of perfectly good items because they weren’t well-protected. Lesson learned.
So going on, there is another major savings on the warehouse side, which is getting fulfilments [software? 30:02]. And both Mike and I know this pretty well. We both operate multiple stores so if you’ve got a single store, it’s not a big deal. You know, you print off a packing slip at a time or an invoice at a time. You most likely use either the built-in shipping manager or maybe you use ShipStation. And both me and Mike have used ShipStation and we both have really, really good things to say about it. Even if you only have one store and you’re just printing one label off at a time and one invoice, ShipStation really does save your time. I don’t get paid by ShipStation to say this and it costs $20. It is very much worth your time.
The second evolution, we used Stitch (StitchLabs, that is) and it consolidated a bunch of orders. Your POs, what it does is that you can enter in purchase orders. It updates your inventory on the backend through Stitch and then it pushes the inventory up to your website, so that way you’re not going into Bigcommerce or Shopify or wherever adding inventory one at a time or exporting a CSV, going through there and changing the CSV and uploading it again. Everything is automated so that start saving you a lot of time. Now, if you’re small and you’re like, “Hey, I don’t really want to pay $200 a month,” and Stitch just went up to $499, I think, for their medium plan. I think it might be $80 for the small plan. And we actually just wrote an article on EcomCrew.com. Make sure to check it out. It’s under Resources and it’s the Inventory Management Comparison. It actually does a huge comparison, and I spent three weeks working on this, of all the major inventory management packages out there. And these really do save your time.
A lot of people don’t want to spend the money thinking, “Well, I only paid $50 for Bigcommerce or Shopify. You know, why should I pay another $50 for inventory management?” My answer is, “Well what is your time worth?” If this saves you 10, 20 hours a month and it costs $100, is your time really $5 an hour? And if the answer is yes, I’m going to say you’re not using your time right. like I said, you should always be growing your business. That’s not to say you just spend money here and there just trying to “save your time” if you’re sitting around doing nothing a lot of the time. But for me, it’s been a huge cost savings when we starting using StitchLabs. Now, that said, Mike’s going to laugh because the lawnmower just started so that means the – we always get the lawnmower on our calls.
Mike: Podcast day.
Grant: Yeah. Exactly.
Mike: That’s one nice thing about being in a nice, quiet office over here.
Grant: So most recently – I’ve been talking about this in the past – I just switch to Skubana. Again, full disclosure: I’m not being paid by Skubana. We just talk about what we use. That’s what we do on EcomCrew. Switch to Skubana, I feel like life is getting a lot easier after a very long learning curve. Do not recommend Skubana – and not being paid so you can see why they’re maybe not going to enjoy me saying this but it’s a very steep learning curve. If you’re not a middle tier ecom company doing at least 20 shipments a day, Skubana’s probably going to be overkill for you. It’s not meant for you. It also costs $500 a month right now, so most likely, it’s not meant for you. But –
Mike: And that’s a minimum of $500 a month. I mean for me, because we’ve been looking at it, it’s closer to $1,400 or $1,500 so it’s pricey.
Grant: It’s pretty enterprise-grade, but the great thing that I love about Skubana is that before, I had to go into Bigcommerce look at my orders. I’ve got two warehouses so I kind of look at an order and if it’s from Idaho, I go, “Well, I’ll ship it from Seattle.” If it’s from Texas, I’m like, “Well, maybe I ship it from the East Coast, or maybe I ship it from here.” With Skubana, like everything’s getting automated. It just sends it to the right place. It can do kitting and bundling. A lot of my orders are a bunch of things shoved up together. I’ve got like a maintenance kit, for example, that’s three bottles of oil and a condition and a do-rag. You know, I need to be able to send that somewhere and have the inventory know what it’s going to do and Skubana just simply takes care of it. So no longer and I just entering orders into a 3PL over here and checking on whether or not it has enough inventory before I enter it in or this and that. It simply knows if I have inventory routes it to the correct place, and it makes life really easy.
It also supports drop shipping and I do a decent amount of drop shipping with some like custom work that I do on the commercial side, so I can route that to the right people. So I simply log in, I can do my POs in there just like with Stitch, and everything gets routed. So it saves me a lot of time. That said, I’ve probably put at least 60 to 80 hours into it just to get it to a functional mode. I’m probably going to put another 20 to 40 to get it into really automated mode, but at the end of the day, it saves me a lot of time so it’s worth it. So when I first started off, I wouldn’t dream of every using it because I’m trying to save money, I don’t really have that much stuff, but these are the kind of things that you should be looking at for getting to the next level. And I know Mike, you’re looking for – did you ever figure out what you are working on now for your backend?
Mike: Yeah, it’s pretty frustrating. I mean I guess we’re getting kind of short on time for this episode and it’s something I probably want to like use a whole episode to talk about. I mean we are on StitchLabs right now. We have some limitations that we’re dealing with and I’m looking at. I’ve actually installed every single one of these pieces of software over the last I guess five to seven days, just like desperately looking for a solution and the only one that we’ve found so far that actually does what we want is Linnworks but the interface is so doggone awful that we’re still looking for a better solution. So that’s kind of one of those I’ll get back to you guys on that, but I mean StitchLabs has done great for us to this point. The technicalities that we’re having right now is moving to FBA fulfilment is where StitchLabs starts to have some functional breakdown that it only allows you to ship one speed by default and it doesn’t do bundling for FBA. So if you have a bundle, if you want to do exactly what Grant was just saying, if you have a maintenance kit that you sell on your website and you want to send that off to FBA, buh-boom. It breaks. So that’s kind of where we’re at with that, Grant.
Grant: Okay. Yeah, I came across the same conclusion with Linnworks after we both kind of said, “Wow, this looks great.” And I even had the PC download and I put it in and I was like, “Well…”
Grant: “I can learn this, but I’m not going to train somebody else to learn it,” and that’s what it kind of comes down to. I was actually just in Atlanta with another company and they were using Stitch and we kind of got to “Why are you on Stitch?” and I was the, “I can train everybody in the office to use Stitch. I can’t train everybody else to use something else.”
Mike: Yeah. And I’ll tell you how desperate I am. You’re going to appreciate this, Grant. I mean I was using the web version of Linnworks and I was so desperate to find a solution here that I actually installed Windows.
Grant: Oh my God.
Mike: And the PC version was just as bad. But we’re still contemplating using it because it is the only thing that does what we need at this moment, but I’m still looking. I’m still looking. Skubana’s like another possibility that we’re looking at as well but yeah, it’s probably another podcast topic.
Grant: Yup. So if there’s any inventory management, ERP, CRM type guys out there listening and you want to get featured on the show, contact Mike because he’s seriously in need so…
Mike: Yup. Cool. All right, well, like I said, we’re kind of hitting the limit for the time on this episode, so thanks, everybody, for listening this week. Hopefully you found this stuff helpful. Couple parting words I always mention every week: if you have time, leave us a review on iTunes. We’d really appreciate it. And if you have any questions or anything that you want brought up on the show, just head over to EcomCrew and hit us up over on the contact form. Be happy to bring up any topics on the show. We love answering user questions. So with that, have a great week, everyone, and we will talk to you next week.
Grant: Okay. Take care.
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