#14 Casey Armstrong: When is the right time to outsource fulfilment for your ecommerce brand? (ft. Shipbob)

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Where to find One Circular World:

Shipbob - Website

Where to find Casey Armstrong:

Casey Armstrong - Email: carmstrong@shipbob.com 

Links Mentioned in Episode:



Krissie Leyland  0:00

Hello, and welcome to the MindfulCommerce Podcast, a place where we talk to ecommerce brands and service providers and developers who care about protecting our planet. I'm Krissie

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Krissie Leyland  0:18

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Krissie Leyland  0:35

Hello, everyone. Today, we'll be speaking to Casey, who is the CMO of Shipbob. We will be discussing when if ever is the right time to outsource warehousing and fulfillment for your ecommerce brand. So welcome Casey, it's really great to have you on here. I've wanted to for ages because you are one of our very first community supporters. So thank you so much for that. Would you like to just introduce yourself and tell me a bit about shipbob? And why Shipbob exists?

Casey Armstrong  1:09

Yes. Well, thank you very much for having me. You know, we're very happy to be part of the MindfulCommerce Community. We take the carbon neutrality and everything very seriously over here at Shipbob, which I know we're gonna dive into. We are a global fulfillment platform. We serve and are partnered with over 5000 brands. We ship millions of items every single month. We actually are up to almost 25 fulfillment centers, including one in the UK, one in Canada, one in Ireland, one in Australia, which we just announced last week, and about 20 in the US. So, I'm very happy to be here.

Krissie Leyland  1:51

Wow, that's amazing. That's a lot. I was actually gonna ask you how many fulfillment centers you have but you just answered that question. It's great that you've got one in the UK. So in your opinion, when is the right time for brands to outsource their warehousing and fulfillment to companies such as Shipbob?

Casey Armstrong  2:13

There's no hard answer where it's like, "once you're doing 100 orders a month." I think it's when you start seeing that the time it takes you to fulfill,and ship items starts to impact the time that you have to focus on sales, marketing, community development & product development, because that's what's actually going to drive your business. I know a lot of entrepreneurs are kind of hesitant to like hand things over. Unless logistics and operations is your differentiator from your competition... I think it behooves a lot of founders to hand that off sooner than not so they can focus on the right things, logistics, and fulfillments, very time intensive, which is often your most valuable asset. If you're staying up till eight o'clock at night, midnight, 2am, during peak season to pick and pack boxes, it's probably not the best use of your time.

Krissie Leyland  3:18

There are brands doing that.

Casey Armstrong  3:20

Oh, we hear that all the time. It's honestly the catalyst for [almost all of our customers] to reach out to and start working with us rather quickly. They start seeing the time that they're spending on it. Sometimes, even worse is subconsciously, they're purposely thwarting their own growth: "I want to double my sales. I want to double my business but that means I'm gonna have to ship twice as many items. I don't want to stay up for an extra two hours or four hours every single day to pick and pack boxes." Then if you're gonna start hiring people, why wouldn't you hire more people maybe for marketing or product development, or somebody to help on the entire supply chain versus just packing boxes? So it's something that we hear rather often.

Krissie Leyland  4:14

Yeah. I mean, that's definitely not why they would have started their business. The first thing that came to my head then was like thinking of when they reach that specific moment, they might also be thinking about internationalization. So do you help brands with going global, because you have these big fulfillment centers around the world and what does that look like?

Casey Armstrong  4:41 

We don't handle the freight, per se, but we have partners that can help with that (with duties, taxes and everything like that). We can also ship globally, just from the United States. Something that we do with the majority of our customers, is we do what's called a "time in transit analysis". We'll help you understand what is the best and most effective way to distribute your inventory, whether that be just in the United States or whether that be globally. It's all based off of your historical data on where your customers are purchasing from. We definitely help with that. Then within Shipbob as well, there's our analytics reporting tool which updates in real time. There you can start toggling on and off different fulfillment centers to start seeing what type of cost and time saving you'd actually have by you know, let's say distributing some of your inventory overseas.

Krissie Leyland  5:32

I'm also thinking of, if they do see... for example, if they're in the US, but a lot of their customers are in Europe. It might make sense to have a fulfillment center in Europe. It might be about cost, but if you're shipping at a less of a distance, then it's probably better in terms of your emissions and your carbon footprint.

Casey Armstrong  6:02

Yes, it's much better for the environment. Then also, sometimes there's marketing arbitrage opportunities overseas, where maybe that type of product, or just in general, some of the customer acquisition costs might be lower. You might say, "Well, I don't have a lot of sales in this region" but maybe that's because you're focusing all of your paid efforts in the United States, but there could be opportunities in the UK, across Europe, or somewhere like Australia. So obviously, once your inventory is there, there's less impact on the environment. It's also faster and more inexpensive. Sometimes you can even test it by marketing in those regions, before you start to distribute inventory. Just to see what type of opportunities are there, both from a demand side, but also the costs.

Krissie Leyland  6:51

Definitely. On the subject of cost... it might be a good question to ask: On average, how much are brands spending with Shipbob in terms of just handing over their fulfillment to you?

Casey Armstrong  7:09

There isn't a hard dollar number or pound, but what I'll give is a percentage. At Shipbob, we do the receiving, we store your inventory and then we do all of the fulfillment. So, the pick pack, the packaging & the actual shipping label. What we typically see is that it often ranges between about 8-15% of your of your total sales goes towards again, all things included within fulfillment, including the shipping label.

Krissie Leyland  7:47

Awesome. That's not that's not too bad. I was expecting more to be honest.

Casey Armstrong  7:51
It can go up at times. Again, it depends on how efficient brands are with their inventory: both the amount that they that they order & keep on hand, how quickly they can replenish it, and also how quickly they can sell it. I'd say typically, it's in that range.

Krissie Leyland  8:12

Do you help with knowing how much stock to bring in? So for example, you know, if they've run out of something... you mentioned that analytics part. Do you help with brands knowing "Oh, I need to order this much of this product"?

Casey Armstrong  8:30

Definitely. Yes, we do. You can start creating notification rules within Shipbob when you're getting low on certain inventory. We're going to continue to invest heavily there to help our customers be smarter through technology. We also have some partners that help with inventory tracking, inventory, planning, order replenishment, and pushing that back up to their manufacturers as well.

Krissie Leyland  9:01

That's really good. I can see that saving a lot of time and money as well. You know, knowing where to spend your budget, and what what's selling more than other products, etc. That's cool. Let's get on to the exciting bit. So how did you become carbon neutral?

Casey Armstrong  9:22

This was something that we'd been talking about internally for a while. As we thought about it as a company, businesses and businesses like Shipbob need to lead, not just follow. We were actually talking about this with some of our partners a couple weeks ago where consumers are pulling and governments at times will push but the businesses have a responsibility to be ahead of the curve, and do what's right long term. So we need to put our money where our mouth is and lead by example. We can't solely look to, let's say, policymakers or some macro level decisions to force us to do what we actually should be doing. And as we get bigger, there's an additional responsibility for us as well. A couple years ago, we were obviously much smaller. We only had locations in the United States but we've become this global platform. We work with 1000s of brands, soon to be 10s of 1000s of brands, so we need to lead by example. What's important there is that similarly sized companies or smaller companies, and maybe sometimes even larger companies, will hopefully, see what companies like us are doing and then proceed accordingly as well. It's something that we were really excited about and we felt it was our responsibility as somebody who's a global player in the space, and especially such a fast growing space like ecommerce. It was very well received internally, of course, by our colleagues, but by our customers as well. So we wanted to make our entire fulfillment network carbon neutral, and then also allow for an easy option for all of our customers so that the merchants or the sellers to make it so all of their last mile shipments are carbon neutral as well.

Krissie Leyland  11:15

That's amazing. That's so good. I was gonna ask about that. So the fact that you're carbon neutral, does that then mean that your customers' shipping is too?

Casey Armstrong  11:27

Right so what we did is that we made it so all of our fulfillment centers, and our HQ, and all of our operations are carbon neutral. All of our customers get the benefit off of that. Then through our partnership with Pachama, we allowed for a very easy way for all of our customers to easily activate it so their shipments are fully carbon neutral as well. By Shipbob being carbon neutral that way, at least all of this part of their supply chain, and everything that we can control is carbon neutral. We are looking into ways to help impact things higher up in the supply chain, such as before items hit our docks. But at least for now, you know, we wanted to make sure we took care of everything that's that's in our control.

Krissie Leyland  12:20
Wow, that's cool. Do you say that your customers say at checkout, or just before the shopper makes a purchase, does it say "this will be shipped to you in a carbon neutral way" or anything along those lines?

Casey Armstrong  12:37

A lot of brands will leverage that. If I recall, the stat correctly, I think it was close to 92% of consumers so that they're more likely to trust a brand that has ethical sustainable practices. A lot of brands truly believe that and some of them are just capitalizing on it. But regardless, it's for the better so that's fine. A lot of brands will, will promote it but some also like to do it behind the scenes as well. So it depends.

Krissie Leyland  13:09

Yeah, definitely. I think it's really good to talk about it wherever you can, and like you said, being a global player, it's really important to build awareness & for you to do the right thing to then influence other people too. Then if your customers are doing the same, it just goes round around like a nice little circle of positivity. So one question I did have actually came from the community. So before we organized this, I did a little poll in the Facebook group. One thing that they said about the possibility of outsourcing fulfillment, was that they would be worried that they would lose the personal touch or the customer connection. So for example, they'll do handwritten notes and then carry on the conversation on social media. How can you reassure them that you would be able to keep that when they outsource?

Casey Armstrong  14:12

So there's a handful of ways and I totally get that. At the beginning if you do some of the fulfillment yourself, that's probably the smart move. You get to understand the the the mechanics of what actually happens on a very small scale within the fulfillment centers, such as waiting to store your items where you're gonna store your boxes, how are you going to pick and pack it most efficiently? How are you going to actually package it? How are you going to wrap that up? And when are you going to hand it off to the carriers and doing timely manner. So I think that way, again, at some level of scale, you start to understand what what actually goes into it and that will allow you to be more informed when you're having conversations with your future fulfillment provider, versus just maybe outsourcing it on day one, which is which is always an option as well. From the customization standpoint. I totally get that. You need to think through costs and time efficiency though as well. Like you mentioned, like custom handwritten notes. If you're doing it that yourself, you know, how long is that taking you to actually write that and put that in there? At the beginning, it maybe makes sense but once you're really starting to, let's say, sell 1000s of items every single month, that becomes rather laborious. So thinking through where should you best spend your time, maybe it is there? Anyways, back to to answer your specific question... We offer a handful of ways for people to still provide levels of customization. You can have custom boxing and custom polymailers. With some of our partners, like noissue and others, we have green options for those those custom boxes and polymailers. Also, we actually very recently started rolling out gift notes as well. So they won't be handwritten notes but that's something that we're evaluating for later this year, early next year, but we do offer levels of customization.

Krissie Leyland  16:09

That's really cool. I was envisioning how you could write the note, and although you can't put the name of the customer, you can still write it and then just have a digital version of it. Like you said, when you're scaling, you can't write a personalized note to 1000s of customers. That totally makes sense. It's good to know that you can still have some kind of personal touch. Oh, I've run out of questions, that's not normal for me but did you have anything that you'd want to share outside of that?

Casey Armstrong  16:52

Our mission at Shipbob really, is to democratize fulfillment for brands of all sizes around the world. So whether you're just getting started, or you're doing 10s of millions in revenue every month, you know, we can flex up and down and help support brands. Especially as we start to go more and more global as well, location becomes much less of a barrier. We already work with brands from all over the world. So all I say is, you know, don't hesitate to reach out. Worst case is, you get some of your questions answered in advance so when you are ready to move over to a fulfillment solution, like Shipbob, you're a little bit more informed. So again, I'd say don't hesitate to reach out.

Krissie Leyland  17:38

Yeah, it could be in the roadmap for when they do reach that level, they know who to go to... and it will go to Shipbob! I guess the only other question actually would be around the process of becoming carbon neutral. Do you have any insights that you can give? What does it take to become carbon neutral?

Casey Armstrong  18:03

A lot of what we did was through credits & through different programs, such as supporting like the Amazon rainforest forest. The reason why we did that is we wanted to be able to take advantage of something that was available immediately, versus something that would take a much longer time. While we know that that option is not perfect, per se, we knew that that'd be the fastest way that we could start being proactive in our ultimate goal of being carbon neutral. A lot of that comes from calculating "Well, what are offsets? What is the energy used across our company?" All of our employees, travel packaging, what's actually happening in the HQ and at the fulfillment centers. And then making sure that with the trial months on some of our partners that we were selecting the right projects and everything to support to make sure that we were putting back in as much as we were taking out as well.

Krissie Leyland  19:08

Thank you for that answer. That was really, really great. I think there's gonna be lots more to come in the world of Shipbob and I'm very excited to see what comes next! So thank you. Thank you so much, Casey, that was a really good conversation. I hope that everybody listening got something from that and if you'd like to learn more about Shipbob, please head to mindfulcommerce.io/directory/shipbob and you'll find everything you need to know and links to their website, their social media, and our little MindfulCommerce summary. I hope you enjoyed the episode, and I'll see you next time. Thank you!

Rich Bunker  19:51

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Krissie Leyland  19:58

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