John Melizanis believes third-party logistics charges typically produce shock fees. Per-item pricing for picks, packs, and receiving can flip an anticipated $1 per order charge into $2.50 or extra, he says.
John is the co-founder of ShipDudes, a New Jersey-based 3PL launched in 2020. His firm makes use of flat-rate pricing for pick-and-pack and warehousing, and no markup for delivery. “Manufacturers recognize understanding their precise prices,” he instructed me.
In our current dialog, John addressed the origins of ShipDudes, in-store retail, warehouse automation, and extra.
The complete audio of our dialog is embedded under. The transcript is edited for readability and size.
Eric Bandholz: What do you do?
John Melizanis: I’m a co-founder of ShipDudes, an omnichannel achievement firm in New Jersey. We assist ecommerce manufacturers ship worldwide and break into bodily retail. We’re the behind-the-scenes engine for a lot of firms offered in Sephora, GNC, and Vitamin Shoppe.
Past delivery, we assist manufacturers with EDI integrations, labeling, and compliance, important for shoppers getting into retail for the primary time. Retail logistics could be demanding; missed labels or late deliveries may end up in chargebacks. We’ve constructed programs to deal with these challenges each operationally and technologically.
We serve three major channels: direct-to-consumer, marketplaces corresponding to Amazon and Chewy, and in-store retail. Our tech stack integrates throughout all of them. We initially developed customized software program, however now make the most of a white-labeled platform that we’ve closely custom-made.
I started fulfilling orders in a storage, utilizing delivery software program Pirate Ship and dropping off a whole lot of packages on the publish workplace. As we developed right into a full 3PL, it turned clear that some achievement platforms fall quick when it comes to stock monitoring and order verification. Our system tracks every little thing — choose, pack, and ship — right down to barcode scans.
Bandholz: How do you deal with customized packaging?
Melizanis: We perceive that some manufacturers require customized inserts, folded bins, or extra intricate packaging. Internally, we group shoppers into three phases: startup, scale-up, and enterprise. It’s not nearly dimension but additionally how operationally mature the model is.
We assist complicated packaging wants but additionally provide steerage on methods to simplify with out sacrificing model id. Some manufacturers comply with our recommendation, others don’t, however we at all times provide it.
Bandholz: What about worker coaching?
Melizanis: All of it begins with a course of. If the method is strong and an worker nonetheless struggles, he’s seemingly not an excellent match.
Each pack station has printed normal working procedures in English and Spanish, with visuals — key for our Spanish-speaking workers. We emphasize the significance of their work: “Somebody paid $100 for this order. How would you’re feeling getting the unsuitable merchandise?”
We instill that mindset every day to construct pleasure and possession. Cameras at every station present accountability. If there’s a buyer concern, we assessment the footage. If it’s a recurring mistake, we coach, revisit SOPs, and retrain.
It’s not excellent. Some hires received’t work out. However we give everybody a good shot. If they will’t comply with the method, they’re not proper for the staff.
Bandholz: What’s the way forward for robotic choosing?
Melizanis: I’ve seen hybrid programs with robots retrieving from bins like large merchandising machines. They’re not as costly as you’d assume and might run 24/7. We’ll seemingly put money into one thing like that for choosing within the subsequent few years.
Nonetheless, individuals aren’t going away completely. A lot of our shoppers anticipate a high-touch expertise, together with customized tissue paper, inserts, and folded bins. That degree of care nonetheless wants a human. I see automation dealing with repetitive duties corresponding to choosing, whereas packing stays extra guide for manufacturers that worth the unboxing expertise.
Selecting is a serious expense. In a 50,000-square-foot warehouse, strolling from one merchandise to a different provides up rapidly. Automation might considerably scale back these prices.
However packing can be costly, particularly for premium manufacturers. It requires somebody who understands the model and packs thoughtfully. Ever get a small merchandise in an enormous Amazon field? That’s what occurs when automation replaces human oversight.
Automation can optimize choosing, however people stay very important for packing, particularly when presentation issues.
Bandholz: How can manufacturers scale back 3PL and delivery prices?
Melizanis: It begins with product design. Measurement, weight, and fragility all influence expense. Larger gadgets price extra to ship and pack. Manufacturers with low SKU variation and easy merchandise are far simpler and cheaper to meet at scale.
The perfect ecommerce product is small, light-weight, sturdy, and suits in a bubble mailer. That minimizes achievement prices and maximizes margins. Not each model can try this, however for those who’re creating merchandise, it’s price giving critical thought to.
As for delivery prices, we use completely different carriers for various wants. For small, light-weight, sturdy merchandise, DHL and regional carriers corresponding to Lone Star In a single day, TForce Freight, and OSM could be cost-effective.
For bigger or heavier gadgets, USPS has sturdy applications, and FedEx and UPS provide strong, dependable service, though they are usually costlier. For buyer expertise, FedEx or UPS Floor might be your finest guess.
Folks typically neglect about injection factors. The place your package deal enters the service community issues. A rural USPS drop-off may be slower (or sooner) than one in a metro hub, relying on the quantity and routing.
There’s no one-size-fits-all. It’s worthwhile to match the proper service to your product kind, ship-from location, and buyer expectations.
Bandholz: Does ShipDudes use itemized pricing like most 3PLs, or flat charges?
Melizanis: We keep away from itemized pricing. Most 3PLs have a number of charges — picks, inserts, receiving, spot checks. Manufacturers generally assume they’re paying $1 per order however find yourself paying $2.50 or extra.
We use a flat pick-and-pack charge. Multiply your orders by that charge, and that’s what you pay — no surprises. We calculated it primarily based on the typical variety of picks per order.
We deal with storage the identical method: one all-in pallet charge, no added spot examine or counting fees. We’re not the most cost effective or most costly, however we’re the best. Manufacturers recognize understanding their precise prices.
We additionally eradicated the standard 3PL communication mess. Each model will get a devoted Slack channel with on-site assist and account managers.
Transport is our third and remaining billing merchandise, and it’s a pass-through. We negotiate aggressive charges, calculate all surcharges, and go them alongside immediately. It saves shoppers time, cash, and confusion.
Bandholz: How can individuals join with you?
Melizanis: Our web site is ShipDudes.com. Take a look at our podcast, “New Cash Talks.” I’m on LinkedIn.
