Steve Denton With Ware2Go

Intro: [00:00:04] Broadcasting live from the Business RadioX Studios in Atlanta, Georgia. It’s time for Atlanta Business Radio brought to you by onpay Atlanta’s new standard in payroll. Now here’s your host.

Lee Kantor: [00:00:24] Lee Kantor here, another episode of Atlanta Business Radio, and this is going to be a good one, but before we get started, it’s important to recognize our sponsor on pay. Without them, we could not be sharing these important stories today on the Atlanta Business Radio. We have Steve Denton with where2go. Welcome, Steve.

Steve Denton: [00:00:43] Hey, Lee. Good, good to talk to you, and thanks for having me on the show.

Lee Kantor: [00:00:46] Well, I’m excited to learn what you’re up to. Tell us about where to go. How are you serving, folks?

Steve Denton: [00:00:52] Well, I think the best way to think about us is think about us like you think about Uber or you think about Airbnb. Right. We’re we’re a technology company. But instead of connecting riders and drivers or hosts and folks that want to stay in their houses, we connect merchants who have products to sell into a network of warehouses across the country that all have different capabilities and and capacity. We connect that through one single technology platform. We connect them through Tier one carriers and transportation providers and layer in enterprise quality data insights and business intelligence, so that these small and midsize businesses have really three things. One, supply chain with a footprint that allows them to offer two day delivery to anyone in the country via ground to flexibility to be able to meet the demands of today’s evolving supply chain change and three enterprise grade analytics and business intelligence so they can compete and win at today’s sales environment.

Lee Kantor: [00:01:52] Now, when you say small to midsize, how are you defining that and what makes kind of the profile of that customer that fits that, that description?

Steve Denton: [00:02:00] Sure. Our typical customer does anywhere between, say, $5 million a year in gross merchandise sales, two hundred and fifty million a year of gross merchandise sales. We certainly have clients that are are less than that that might have some specific needs or some unique challenges and certainly have many that are above that, but that’s right there in that sweet spot for us.

Lee Kantor: [00:02:20] So now what are some of the challenges that they’re facing, where you’re the right fit for them?

Steve Denton: [00:02:26] I think I think the biggest challenge is if you think about today’s entrepreneurs, you know, they’re really great marketers. They’re great at selling products, manufacturing products, providing great service and but where their challenge is, you know, competing with large enterprises on the supply chain side, right? So if you think about it, I think that digital landscape is really leveled the playing field so that companies of all sizes can compete digitally for sales, different budgets, but certainly can compete. But when it comes to supply chain, you’re shipping out of your own garage or your basement or a storage facility that you have in your area of the country. It’s really hard for you to compete for today’s connected consumer that expects access to the world’s inventory at a transparent price point. They want those goods tomorrow or the next day, and they’re not interested in paying for shipping, and they want an easy returns process. So it’s just it’s an area where you don’t have a level playing field. So for for those merchants who want to compete for global customers and want to offer the same experience to those consumers that an enterprise would offer, we help them and we level that playing field and we do it in a way that is asset light doesn’t require a capital commitment and works very much like Uber. It’s a pay as you go model. So that flexibility and that intelligence and that footprint for them tied to Tier one service providers is actually a huge way for them to win and compete in today’s economy.

Lee Kantor: [00:03:56] So now walk me through logistically how that’s going to happen. Say that I am that person you described. I have a giant warehouse or I’m using a giant warehouse in my market and I’m saying, You know what? I want to serve folks coast to coast. Let’s start with America. So now what do I have to do different? How do I kind of partner with you and how do you help me kind of solve this problem?

Steve Denton: [00:04:18] Sure. So so let’s use a real use case. Let’s say you’re based here in Atlanta and you’ve got a warehouse here and you’ve got thirty two percent of your customers on the West Coast. So those West Coast customers really now have a ground option of four day delivery, four to five day ground, or you can send it air. Either one’s going to either drive a lower customer engagement score because I’m not willing to wait four to five days for that or two. You’re going to have to eat it in margin because you’re going to subsidize it because I’m probably not interested as a consumer paying for air when I can just get it delivered to me in one or two days from somewhere else. So what we would do is we take a look at your sales history or technology, a technology platform called Network View and analyzes your sales. It looks at your sales projections and maps it out and says, Hey, let’s keep your warehouse in Atlanta, right? You own that. That’s your asset. Let’s subsidize that with the warehouse in Sparks, Nevada. And with that new footprint, you’re going to be able to offer eighty eight percent of your customers today or less ground delivery. We figure out the technology figures out the percentage of the inventory and the SKUs based on your sales and your projected sales to play some forward stage and sparks Nevada.

Steve Denton: [00:05:33] That’s a simple technology integration. We’re connected to see you’re on Shopify, that’s your cart. So it connects to your Shopify cart or distributed order management system routes the orders either to the Sparks warehouse or your Atlanta warehouse. They get shipped out either from you in Atlanta or our team out in sparks, and then we close the loop. Are you with your accounting system and your CRM so that you can email when the tracking number and we close it out financially in your QuickBooks or whatever financial application you’re using? So it’s relatively straightforward set up, it’s all done through technology. And the nice thing about it is you’re getting involved and you’re paying as you go. If you ship 10 packages, you’ll pay for 10 and you’ll pay for the labor for 10. If you ship two hundred, you pay for the labor for two hundred and the shipping for two hundred. So in today’s economy, right, we’re warehouse workers are really hard to find and you’ve got a labor shortage there. That flexible labor model labor model works really well for you and allows you to execute against that in a way you couldn’t do it on your own.

Lee Kantor: [00:06:34] So now if folks aren’t kind of leveraging your platform and are kind of doing it by themselves, is that really contributing to some of these supply chain issues that you’re hearing so much about nowadays?

Steve Denton: [00:06:48] No, I mean, it would be it’s hard to do it on your own. But most of the supply chain issues that that are happening today, it’s not really a function of folks trying to do it on their own. You really got three three pinch points. They’re one. Manufacturing’s been online all year, but the ports are jammed up. I think recently I read an article there’s like seventy two container freighters out in the Port of Los Angeles, right? And just starting to work around the clock. And so you’re having trouble right now getting goods into the country. So that’s creating a pinch point. The other side of that is you’ve got more inventory in this country than you’ve had previously. So you’ve got a ton of inventory in this country right now that didn’t sell last year. So depending on where you were from a good standpoint on the side of the pandemic, if you were selling exercise equipment or you were selling consumer products or health care equipment or Home Office goods, things like that, then you probably made out pretty well in terms of sales. If you were on the other side of that, maybe apparel and things like that, you’re sitting on a lot of inventory right now. So you’ve got record levels of inventory in this country, record levels of inventory coming in and about five and a half percent vacancy rates in the warehouses. You combine that with the port congestion and then the shift of B to B to B to C or as I like to call, I call it business to everyone. You’ve got capacity issues in the transportation providers. That’s what’s causing your biggest pinch points right now. Those three things.

Lee Kantor: [00:08:24] So how does this get resolved?

Steve Denton: [00:08:27] Well, I think one, you’re going to see the holiday season start early, right? So retailers right now are concerned about having enough inventory for the holiday season. At the same time, they’re sitting on a decent amount of inventory. So I think you’re going to see holiday promotions moved away early this year in order to do a couple of things. One, clear out old inventory. So I think you’re going to see a lot of buy one get one and the get one is going to be some inventory that needs to get moved too. I don’t think you’re going to see a ton of deep discounting, as you’ve seen in previous holiday season, just because the lack of inventory that a lot of these retailers and merchants are going to have. And then and then lastly, consumer behavior, right? I mean, I think you’re hard-pressed to ask anyone that, you know, did they receive or ship a holiday gift last year that got delivered late and most of them would probably raise their hand and say yes. And I think from a consumer standpoint, we kind of saw the impact of that on last holiday season. So I think there’s a good opportunity to shift consumer behavior and pull it forward for the holiday season this year.

Steve Denton: [00:09:37] So you you’ll start seeing holiday sales or holiday promotions like any day now it’s all going to get pulled forward. We need to drive in early quarter, get the goods cleared out of the warehouses, drive sales and and free up the congestion in the ports. And that’s why they’re working 24 seven. And and then the last thing about it is being smart about where you’re placing your inventory. It doesn’t make any sense to place inventory that’s going to sit for nine months in a in a in a warehouse that’s near Port City, right? You’re tying up valuable space and you’re paying a premium for that. If you’ve got goods that need to go into long term storage because that’s just the reality of what it is right now, it makes sense to work with a company like ours or other providers to find long term storage needs in the center of the country where you’re going to pay less. There’s more availability from warehouse space and free up that warehouse space and the port cities, which is typically on the coast now.

Lee Kantor: [00:10:34] Do you think that this is going to create some scar tissue for some people that used to maybe doing things like just in time? And then now they’re saying, look, we’ve got to hold on to some stuff because we can’t trust this supply chain anymore.

Steve Denton: [00:10:49] Yeah, just in time has been really hard. That’s been a. Hard way to execute for the last two years, right? The lean process is really smart, but it’s been hard to execute just for the unforeseen. So you’re already starting to see those shifts, right? I mean, you see right now the number of electronics, whether whether they’re cars or exercise equipment that are just sitting because they don’t have the right computer chips. We see a lot of goods coming in for our customers that are coming and it might be missing two or three items. So it’s creating this whole new economy. Lee, around different service providers that are actually installing these in the warehouses or the distribution facilities when it was actually happening previously at the manufacturing center overseas. So. So I think from a scar tissue standpoint, it’s the diversification of the suppliers and and spreading that out over the year and building a little bit more buffer in your inventory, which ultimately is just more costly. We’ll come through the other side of this. I mean, last year, there were issues that challenge last year. This time was manufacturing had been offline, right? So the big issue was cargo jets being able to get the inventory into the country this year. Manufacturing’s been online, so it’s the cargo ships that are having trouble getting into the country and it’s just a longer transit time. So definitely scar tissue built up. It’s having people rethink their supply chain, especially from the manufacturing side, and carrying more inventory than they normally would carry, which is again, why you’re seeing more inventory coming into this country right now.

Lee Kantor: [00:12:24] So now, as part of where to goes kind of scope of service, are you seeing that adjustment in that side as well? Like, you’re kind of putting the last pieces of the pie together for some folks?

Steve Denton: [00:12:36] Well, it’s interesting because when we started the business right, our our offering really started once you got the goods into the country, right? So we would inbound your goods from whatever port you were bringing them into in the country. Or maybe you had brought them into a staging warehouse and then we would take it from there into our network and and we would do the warehousing in the last mile as as times have changed, right? And more and more of these customers or clients need need more help. We’ve expanded our services to actually start working directly with the manufacturers and importing those goods from from overseas destinations and getting involved early and often just because our technology provides better visibility into it. And then frankly, as part of being a UPS company, we’ve got access to resources and assets that a lot of our customers don’t, so we can bring those to bear for the benefit of our clients and and their consumers. It works out good. So we’ve had to expand our offerings to move further up the food chain to provide a more end to end experience versus just final warehousing and last mile.

Lee Kantor: [00:13:49] So now what advice do you have for folks that are selling in multiple marketplaces and sales channels for the holiday season? Is it is the diecast already? Is there anything to be done?

Steve Denton: [00:14:03] Well, I think I think look, digital channels allow you a lot of flexibility and you know, more often, you know, you can turn the dial up and turn the dial down. With with with a lot less lead time right than traditional sales channels. So as more and more of merchants and retailers and manufacturers are selling digitally and selling more and more digitally, the nuances of that really come around. The first one is around inventory, right? So the first the first thing a lot of folks need to think about is fencing their inventory. And what I mean by fencing their inventory is, let’s say you’re working in multiple marketplaces, you’re working on Amazon, maybe you’re working on eBay or Wayfair and you’ve got multiple marketplaces where you’re working. You need to be able to fence your inventory and say, Okay, I’ve got just make up a number. I got a thousand units, you know, I don’t want to make the entire thousand units available to all the channels equally, because you might have different margins and different channels. You might have different price points. There’s different levels of expectations. So the first thing you need to be able to do is fence your inventory. And so I’m going to make four hundred of these available on Amazon. I’m going to make 200 available on eBay, and I’m going to reserve some of this for direct sales, right? The folks that are directly navigating to my site, people that are on my email list, consumers that I have a relationship with directly versus just through marketplaces. So fencing the inventory is one of those things that a lot of folks learn the hard way, because if you’re if you’re in one of these channels, right, and they run a blow up sale and and things go gangbusters, you can quickly find yourself out of inventory, which seems like a good idea, except for those consumers that you’ve built a relationship that are on your email list and they’re coming directly to your site, navigating and finding that.

Steve Denton: [00:15:50] Promoted, but you don’t have the inventory, so fencing that inventory is really critical. And I always like to pass that on. It’s just a digital sales best practice. And then I think on the supply chain side is really having a diversified footprint, right? Because you’re going to be able to get these goods in the hands of your consumers because I think you’re going to see if you’re not going to see discounting. As deep or steep as you’ve seen it in previous holiday seasons, then the consumers then are going to be looking for fast and free delivery. And recently we ran a study and it shows like seventy two percent of the merchants are planning on free and fast delivery this holiday season, where 36 percent of them only do it year round. So I think you’re going to see a premium on that and then you’re going to see a premium on easy returns. Right, and if you can’t compete there, it’s going to be really tough, so venture inventory? Have a diversified footprint. And free and fast shipping, easy returns, and then the last piece is you’ve got to go early. You can’t wait. Right, because if you wait too late, you’ve just you’ve got to pull it forward and it’s going to give you a better experience.

Lee Kantor: [00:17:03] Well, good stuff. Congratulations on all the success. If somebody wants to learn more, have a more substantive conversation with you or somebody on your team. What’s the website?

Steve Denton: [00:17:11] Sure, it’s WW w where to go, and that’s where are the number to go. And we’d love to have a conversation with you.

Lee Kantor: [00:17:23] All right, Steve, thank you so much for sharing your story today.

Steve Denton: [00:17:26] Thanks, Leigh. You guys have a great week and thanks for the time.

Lee Kantor: [00:17:29] All right, this is Lee Kantor. We’ll see you next time on Atlanta Business Radio.