AS 72: Where should I store my inventory? Choosing a warehouse with Tim Werkley
09 Nov 2016
Today I had Tim Werkley on the show. Tim Werkley owns Swan Packaging Fulfillment located in Wayne NJ. Swan provides multi-channel pick/pack order fulfillment and FBA prep and support services, they were established in 1986 and operate a 125,000 square foot facility with 60 employees.
In this episode, you’ll learn:
- How Tim’s warehouse scaled from a small warehouse to the operation it is today
- Where to store your inventory if you are a private label seller, fba seller, wholesaler
- Best storage practices
- Rates for current warehousing solutions
- How Tim uses technology in his businesses
- The state of fulfillment with Amazon, and where it is going
- How the inside of a warehouse operation looks like
- Issues I have with warehousing and Tim’s answers
- Machines in warehousing from carton labeling, to sealing machines
- Different solutions for different sellers
- How to optimize your supply chain and logistics
- How you can multi-channel fulfill with a 3rd party storage provider
- The evolution of Swan Packaging Fulfillment
- How to handle wholesale orders
- How Amazon acquiring businesses affects fulfillment businesses
- IT side of business
- How to choose a warehouse
- Where to store your inventory
And lots more!
Get in touch with Tim:
AS 72: Where should I store my inventory? Choosing a warehouse with Tim Werkley
DAVID ALADDIN: Great to have you on this show Tim.
TIM WERKLEY: Thank you David, good morning? How are you?
DAVID ALADDIN: Great, so you have a 125,000 square foot warehouse 60 employees, let’s go back to the beginning where you just have one employee, what happened?
TIM WERKLEY: Sure so we were established in 1986 which is 30 years ago this year. We started in Roselle Park New Jersey with about 25,000 square feet something like that. It is a family business. I’m very fortunate to have parents who started the business and I’m the only child so taking it over was a great honor and privilege that they gave to me and they’re great teachers and mentors and growing the business and helping to perpetuate it. So I do thank them.
So yes they started it in ’86, we had a small facility, we did what’s called one-shot fulfillment. So we were packing books into boxes for one customer really and sending them out to consumers in the public and over time that evolved into other kinds of fulfillment as well as packaging.
So we did a lot of things like kit assemblies and shrink wrapping, different kinds of contract packaging services and then I’d say in the mid-nineties we started getting into order fulfillment. So storing inventory for some of the same customers and picking and packing and shipping orders and then as e-commerce grew and the services to support that became more popular to outsource at least we really convert away from the packaging business in primarily into the order fulfillment business.
And at this point we have about 125,000 square feet and about 60 employees. We ship thousands of orders every day across somewhere around 40 or 50 customers and it’s a very behind-the-scenes industry that nobody knows about unless you are somehow involved in this for some reason but it’s you know it’s an important component of the e-commerce industry and a support network that allows packages to be shipped to consumers homes.
DAVID ALADDIN: Interesting so in the nineties and actually like while you’re growing up you’re working it was your dad’s business when he initially started right?
TIM WERKLEY: That’s right, yes so he actually started a company called Swan Packaging in 1980 which was a packaging brokerage company and then he met a guy who owned a fulfillment center in the lobby of a shared customer and then he brought some business into that fulfillment center and then ended up sort of buying his way into it and then bought that person out of the company. So that’s sort of the origin of it. But you know he found it and my mother worked in it as well and grew it and then I came in 1998 and then they retired in early 2000s and that’s sort of where we are today.
DAVID ALADDIN: What was. . . I’m curious, what was the reason why he purchased the other business partner out of it?
TIM WERKLEY: Opportunity I guess you know the American dream right, you know he brought a big piece of business into it and just bought into it. I think the other guy had some health problems as well and you know unfortunately but that probably was the reasoning that it happened but nonetheless you know it gave him an opportunity to own his own company.
DAVID ALADDIN: Many times I here like you know the partnership itself that doesn’t work but I can see how healthy could detract from the operations of the business and want someone to get rid of their vest in share in the business.
TIM WERKLEY: Yeah.
DAVID ALADDIN: So during the nineties; so you transitioned in 98 so about two… was 18 years now that you’ve been running…?
TIM WERKLEY: We are aging maybe yes.
DAVID ALADDIN: WOW! Okay so when you inherited the business it was at 25,000 square-foot or was it bigger at that point?
TIM WERKLEY: No, I think we’re at about 60,000 square feet and since then we have grown it up to about 125,000. I think that we took over additional space in 2009-2010. So we stayed in the 60 for a period of time and then you know the growth into the larger space is really a function of more customers, more inventory needing to expand the footprint to accommodate the growth.
DAVID ALADDIN: Awesome so you’ve doubled the business at least and in terms of square footage. It is not in terms of profit or revenue. Are you guys leveraging the entire space? Who is this looking on your side?
TIM WERKLEY: Yeah I mean it’s a warehouse facility with offices, so it’s primarily a combination of operational space for receiving and product handling. You know a receiving dock environment, a pallet racking where we store bulk inventory and then picking locations where we replenish from bulk to forward pick locations and people are picking orders from those locations. So it’s sort of a blend of different types of storage fixtures to support the operational process and you know we have a lot of people, a lot of four clips driving around. So it’s a high you know high movement, high product in-product out type of the building.
DAVID ALADDIN: What is a 125,000 square feet look like? Like I’ve lived in like a 3,000 square-foot house you know that was pretty big.
TIM WERKLEY: Considerably bigger and higher roof and you know it’s essentially a big box and you fill it with racking and equipment to be able to store as much inventory as you can and move it around efficiently and effectively and you know the design of your facility has a lot to do with your ability to be efficient and thus have lower costs. So you know we try to set things up both globally and at a customer level to make ourselves efficient. So it does evolve over time you know we change the layout of the racking and the setup of things to make it work for the kinds of customers we have, the kinds of products that they have and what we need to do with people in an assembly line or production type of environment.
DAVID ALADDIN: Speaking of people; you guys have 60 employees or how’d you guys scale employees like who’s doing the higher . . .
TIM WERKLEY: So you know we try to hire and promote from within so we bring people in at a lower level and then as they gain skills and experience you know we try to allow them to progress in the company and you know it’s probably…. there’s probably a core group in the warehouse side of about 10 or 15 people- 20 people who have been here for a long time. Then we have 10 or 15 people who on the supervisory and executive level who have been here but up to 25 years some of them. So we have a lot of 10 years level of experience in our management and that goes a long way in terms of running a good operation and having a positive working environment and so.
DAVID ALADDIN: Yeah I like how you mentioned running a good operation because one of the hardest parts of our businesses is scaling the right team and it seems like you’ve put the right people in places. You’ve got an executive team managing the warehouse staff, the logistics of all these different businesses important goods into your warehouse. You know how many containers are coming in every day?
TIM WERKLEY: It varies widely you know we’ll get in a combination of full loaded containers from overseas, truck delivery, some palette deliveries of full trucks or individual pallets LTL it’s called. UPS and FedEx small package deliveries, the inbound really fluctuates considerably day-to-day, week-to-week, season-to-season depending on the customers inventory and their market and who they are selling to and what they’re selling. But you know we’ll go from no trucker or container deliveries to five containers in one day. So it is just really depends.
DAVID ALADDIN: I’ve recently had this problem, I get a lot of wholesalers asking to sell my brand you know products from within my brand and do a lot of like your customers handle wholesalers this way they ship them into this warehouse and then from there you guys take the orders from all these wholesalers and send the goods over. So how does this whole system work?
TIM WERKLEY: So most of our customers are a blend of multi-channel marketers in one way or another. They are selling products generally to the public you know to consumers in the public with some degree of business to business requirement and they typically will have their own website where they sell products direct to the public through shopping card program.
They may have an Amazon presence where they’re selling the same items through FBA or through different methods of Amazon that we support, we’ll get into that later and then other marketplaces you know eBay, Walmart.com, and you name it. So they will typically have you know one or multiple channels that were fulfilling on a concurring basis and the inventory is stored in our facility and can be used to support all of them and you know so in terms of how they manage that there’s a lot of software options to facilitate it multi-channel aggregation systems and the ability to report and unify those things together and then other customers just integrate to our systems independently for each channel and we fulfill the orders independently.
So there’s a couple of different ways to approach how we manage all of the sales channels and that’s really just a function of what the customer needs to do. So in some scenarios were only shipping product to FBA. So we are doing a lot of FBA prep. So the FNQ labeling, poly-bagging kit assembles and set building and then other customers’ will you know need those services in addition to fulfilling on the other channels at the same time. So it’s sort of a mix of customer types and sizes.
DAVID ALADDIN: You know I just realized during your time the whole Amazon situation happened. So you started ‘98 and then Amazon kind of crept into your space you know how did it and you guys reacted, you guys to this changing landscape; how did this whole thing happen for you like what year did you see FBA and Amazon customers started coming into your business.
TIM WERKLEY: Yeah so it’s an interesting story; so Amazon is an interesting company to work with as a service provider and also work with on behalf of our customers who are the sellers on Amazon. For our experience or our story with it is I’d say in 2000 early 2000 I don’t remember 2002 or 3 maybe, Amazon bought one of our customers which is a company called Audible.com and you know at the time I said okay well you know it happens you lose customers one way or another and then not too long after that they bought a division of a different customer and then I started competing against FBA soon thereafter.
So I started to see the writing on the wall that you know Amazon is not going away I’m not going to beat them at least in this game you know and they have their own sort of monopolized market place where they can create an environment of requiring you to use all their services one way or another and there’s no way that I can you know prevent or compete with that. So it’s really a fork in the road of either trying to just stay away from people that sell through Amazon or on Amazon or embracing it and trying to work with it.
So we chose the latter and you know we started getting into primarily FBA preps or getting product to FBA facilities in concert with customers selling the same items on their own website and then as the marketplaces expanded you know you start to see a lot more competition to Amazon now with particularly WalMart purchasing Jet and you know putting a stake in the ground and saying Amazon’s not going to rule this landscape we’re going to have some competition which I think is healthy and then Amazon sort of comes back and doesn’t allow you to use unbranded packaging in their multi-channel fulfillment anymore.
They start hiking up their long-term storage fees so you know it’s really quickly evolving and we’re trying to stay at the forefront of it to support customers that really sell on a multi-channel environment.
DAVID ALADDIN: Yeah because I feel like it if I was running a warehouse and then these new guys came into town and then they started taking over all you know a lot of the fulfillment of products and you mentioned that they were acquiring businesses that were going through your warehouse. Are you able to mentions how much they acquired particular businesses for?
TIM WERKLEY: Oh I don’t know what the purchase prices were I mean Audible you probably heard of it, its started like you know the book on tape type of company and they were based on the same areas as we were and we were doing device fulfillment for them. So the concept was you get a device when you sign up for the service and we’re fulfilling the devices. We where shipping thousands a month, it was a nice piece of business and you know eventually the device market became saturated everybody had a device so they didn’t need to entice you to sign up for the service by giving you one so that diminished.
But you know the pieces of business that they took from us you know that particular one had had shrunk so it wasn’t related much of an impact but thereafter the next one was larger and then you know losing business to FBA became more of an issue. So that was really the time when I started to need to reevaluate the approach to Amazon.
DAVID ALADDIN: So it’s like a two-sided war you’ve got us like you know products that are entering, it becomes competition and they start taking market share on your side; you know Amazon buying a business that is provided a significant amount of revenue coming in you start to lose a lot of money if your shipping hundred. It’s totally at a different perspective.
TIM WERKLEY: They’re beasts I mean you know they I don’t sell anything on Amazon, I mean we are strictly a service provider to the market but you know my customers tell me that they’re your best friend, they are your worst enemy they’ll go take your listing over if it’s a good product and good you know doing well and they have the ability to shut you down immediately if your metrics fall below the requirements and so like in anything else diversification is important you know and having other sales channels available and supporting your business to make it more stable and healthy is a good idea.
You know and particularly with they said the change with the WalMart.com that’s it’s sort of the foreboding of the future of you know the landscape is now going to be a little bit different. Amazon is, I think the pace of their growth and their domination is going to slow down a little bit and you know a lot of it has to do with sellers not liking how Amazon treats them I mean from what I’ve heard it’s very difficult you know they’re not very flexible the response is not great but they’re the 800-pound gorilla so you have to sort of play with them right.
DAVID ALADDIN: You’re actually a super on point they don’t be mean I they don’t treat us as well as they treat their customers don’t CSS customers so you definitely on point in that regard.
TIM WERKLEY: Yeah I mean it’s very clear that it is a customer-centric company, you know they care about having the confidence level with the customer general public who is buying from them and that is at the expense of the seller and you can choose to go along with it and you know support that or you cannot sell on Amazon, you know they said it’s an internal monopoly that they have with you and your options is just not used not work with them. So it is what it is. I can’t blame them for growing in that way and you know Jeff Bezos did a pretty good job I guess right, but nonetheless you know if you’re a seller of product in the e-commerce market you know Amazon is a required piece of your of your portfolio.
DAVID ALADDIN: I’ve been actually going into like some businesses and just some retailers refused to go on Amazon or they refused to sell on Amazon for whatever reason but let’s talk about savings like let’s say we start using a fulfillment center outside of FBA; what type of savings do you see on Amazon seller saving?
TIM WERKLEY: So it could take a lot of forms, I mean storage is the most important one right, you know they recently up their storage charges considerably particularly around the holiday seasons. So long term storage is a, you know can really kill your business quickly and that’s a function of them growing the FBA business in their e-commerce monopoly very, very quickly and the inability to support that structurally.
So they say you know we need to force out all of the inactive inventory and slow the growth of our infrastructure build and that’s why they introduced seller fulfill prime as well you know which we’re getting into as well to support for customers. It’s very interesting to see how this is progressing and trying to stay in front of it you know it is challenging but I think we’re doing a good job at it.
DAVID ALADDIN: The crazy thing is like if you spend I mean if you have your inventory longer than six months they start charging even more money and so it’s like they have so much inventory in their warehouses that they just don’t even want it anymore you know it’s almost exact opposite of you know you guys want more inventory in your warehouse.
TIM WERKLEY: Yeah I mean you know it in some ways we have a similar attitude about slow moving inventory like we don’t want to bog down our facilities with product that doesn’t move that we. . . . our revenues and our businesses based on active product flowing through the building you know our service fees are generated by touching the product essentially and so in that regard you know we sort of a similar approach.
I don’t act upon that approach in the same way; I don’t penalize customers you know immediately if their inventory sits for a period of months it doesn’t operate like that and relative to your prior question which I sort of got off of you know cost savings the stores is one factor, any large sized items over sized products is treated differently in the FBA model both from a storage and fulfillment perspective.
We tend to be substantially cheaper than multi-channel fulfillment with lighter items. So anything under a pound when it can ship at a flat rate across the country with very low shipping rates and they’re sort of on par with Amazon shipping rates. So you know when there’s a lot of throughput of light product the fees Amazon assesses where they embed the shipping into it is a sort of similar to our fee.
So you avoid the necessity of getting the product to FBA, the time lag and the carrying cost of that product there. So there are a lot of savings opportunities you know in the nature of the storage and lighter product being fulfilled directly from our building that’s where seller fulfill prime also comes in when you just start shipping from your own facility as opposed to putting product into FBA you know that there’s a whole savings of transportation, the time loss and if you’re purchasing the shipping through FBA or through Amazon you know that the cost is effectively the same.
DAVID ALADDIN: I want like if possible can we deep dive into the actual cost savings like do you think we’d save like 10 maybe 20% versus if we went straight Amazon in terms of warehousing?
TIM WERKLEY: Very hard to say you know if it’s very much at a product level even it’s not just like company or customer level, it is a product level. So if you have an item that is very large you know you’re going to save proportionately more whereas if you have a very small product you know in our facility, we are charging you very little to store relative to what Amazon is. So you know the mix of your inventory and the kind of product you’re selling has a lot to do with the degree of savings related to storage and as I said lighter non-media product you know can be cheaper to be fulfilled from our facility.
We have a harder time competing with the shipping rates from Amazon on things that are over a pound. So you know they sort of own the shipping industry in a lot of ways and building their own you know network of planes now and you see the Amazon trucks delivering packages all the time so you know the shipping component of it is a little harder to compete with for the larger heavier product but you know as I said I think the future of it when you talk about where this is going as opposed to where it is right now is that sellers are really going to be a lot more places than just Amazon and you know the ability to support all those channels concurrently as important both you know the new ones as well as continuing to support Amazon.
So getting product into FBA, potentially doing seller fulfill prime doing FBM so shipping from your own warehouse and not being on prime. We also vendor central, so if you sell product to Amazon you know just getting it there and complying with everything but you know diversifying and having those other channels is really the direction that things are going and you know trying to set up the infrastructure to accommodate that sooner than later is a good idea.
DAVID ALADDIN: I feel like there’s like this whole love-hate relationship between you know the warehousing industry, the shipping industry with Amazon. They’re stepping on everyone’s toes. When will it stop?
TIM WERKLEY: I mean look you know they provide a. . . I don’t know what the percentages is but a large percentage of the revenue for companies like UPS and you know to some degree USPS as well in the blended postal products that they use. So I think you’ll see you know them get further into the shipping business as time goes by. I mean they’re going to. . . particularly in urban areas you know so building out the infrastructure to allow them to deliver packages from the source to the destination without needing another carrier.
Now you know you say okay what is that going to do relative to their relationships but with the carriers and the pricing they have based on entire volume they give them normally you know I don’t know that, that’s way over my head but the I think the future and the reality of it is that Amazon will you know they already own the logistics side of it relative to the product storage and handling and certainly the marketing and selling but I think you’ll see them get considerably more involved in the delivery aspect of it you know the next two day Prime; the next day; the same day delivery for urban environments and you know do you need to get the that product this afternoon if you order this morning maybe – maybe not.
So it sort of depends on what you’re buying as to whether or not it is even applicable or useful but you know they will be in the logistics business more and more overtime.
DAVID ALADDIN: What do you think about their. . . they are coming out with these airplane drones that would deliver it lightweight items to your house?
TIM WERKLEY: You know that was a couple years ago right when I think they did it before Christmas so to some degree I think that was a bit of a marketing gimmick you know to get you to say go Amazon-Amazon and then coincidentally now I’m Christmas shopping and you know I’m thinking Amazon still so but it you know is that out of the realm of possibility? No, right I mean they’re talking about Uber with the self-driving cars now and you know you talk a lot more remotely controlled or smart devices moving product around, I don’t see the sky being filled with thousands of drones delivering packages at the degree to which they ship packages now but I think it has its place probably in certain applications sure.
DAVID ALADDIN: I’m just thinking because that would eliminate a lot of package deliveries from USPS and UPS if they just limited that section out of the game.
TIM WERKLEY: Yes it’s a lot of. . . you are talking a lot of volume of packages though so you know that drones got to make a lot of trips back and forth.
DAVID ALADDIN: You guys wouldn’t need to open an airplane bay.[Laughs]
TIM WERKLEY: [Laughs] We will put a drone landing site on our roof.
DAVID ALADDIN: Make a little square right there and cut it up and it would be kind of cool. Okay so I recently had a 40-foot container get quoted in California by my freight forwarder and they said it was I think it was about $400 a month for storage per month at a storage facility is that quote kind of on par?
TIM WERKLEY: Well so if you have a 40-foot container and you know presume they’re stripping it, they are unloading it and then putting it into storage and giving your storage rate based on the yield of pallets storage that comes out of that container, the number of pallets that you produce will be a function of how high you stack the pallets and the size of the boxes. So if you have very large bulky boxes and you’re putting them in racking where there’s not a lot of height then you know you’re going to produce more pallets and conversely if you have a lot of small boxes you can customize it better and fit proportionally more product. So little hard to say whether that’s a good rate but usually you’ll get between 30 and 50 pallets out of a container depending on those factors that I mentioned out of a 40-foot container at least. And you know so if you say . . . what did you say $400?
DAVID ALADDIN: $400 a month for a 40-foot container.
TIM WERKLEY: So would be about $10 per pallet per month if you put in the middle of the patent number of pallets it yields. So it’s not out of the ballpark no, I don’t think so.
DAVID ALADDIN: Solid response I didn’t expect that detailed of an answer [laughs].
TIM WERKLEY: It’s all about numbers.
DAVID ALADDIN: For sure! Let’s talk numbers, like what keeps you up at night every. . . you know running this fulfillment center.
TIM WERKLEY: Well you know people outsource the operational management of their business because they don’t want to have employees, they don’t want to have a big facility, they don’t want to stay current with their systems or need to stay current with their systems related to logistics, they don’t want to negotiate shipping rates with carrier. So you know everything that these business owners decided or uses the reasons for outsourcing become my problems right. But when you do that collectively across 40-50 customers it takes on a different approach.
So you know those are the thing that keep me up at night but that’s the nature of our business right. I mean that’s what we are as a company and the service we provide to other businesses. So but you know besides that I mean managing 60 people, there’s a lot of politics you know you have a bit of a he said – she said type of thing coming up a lot, you know and that’s just the nature of having employees and you take it as it comes and you deal with it the right way and you treat people with respect and have a positive healthy working environment and you’re going to have as good of an operation as you possibly can.
Aside from that you know staying ahead of the curve with the e-commerce landscape and particularly technology side of it is challenging. You know trying to be aware of what the trends particularly related to Amazon and adapting to them and having solutions in place to address them for customer proactively as opposed to reactively you know that is what I don’t know what to say keeps me awake at night but that is something that becomes you know large focus of my time.
DAVID ALADDIN: Let’s talk about technology; I noticed you guys mentioned you’re doing a lot of automation within the warehouse. Can you go more into detail about that?
TIM WERKLEY: Sure so you know you see a lot of videos and pictures of robots and machines doing everything in a warehouse and I mean we don’t have that. I think there are facilities that do that. You really need to have a very consistent workflow with consistent product for automation to make any sense and you know so we have people doing the vast majority of tasks now the qualification to that is that we try to put as much automation around them as we can.
So yeah to take the decision making, the description area part of it out of the mix, simplifying the process and the workflow and introducing you know physical automation where it makes sense financially and logistically. But things like carton sealing machines, we have you know auto bagging machines to make mailing bags essentially and print labels to the bags, different kinds of machines and things related to adhesive so you know presenting labels and taped to the workers in an automated way.
So it’s really it’s like an economy of motion study where you set up your operational space in your workflow to have the least number of steps and decision-making points involved and that is what makes you efficient and makes you able to use the same process across 40 or 50 customers and not have to specialized it uniquely to each customer. You know so part of our business or our ability to be efficient is having certain standards of how we operate and then applying those standards across many customers but our ability to get and retain customers is the necessity to customize those things to each customer’s needs and nuances and that’s sort of the challenge you know to make both of those work together.
DAVID ALADDIN: You have like a different perspective because you see all the sellers and what they’re doing. What are sellers doing very well that you see?
TIM WERKLEY: What are they doing well? I think most sellers now are pretty strong on the. . . I don’t want to say the IT side but the product presentation side right. So getting products served up to customers whether it’s on their own website, Amazon or any other marketplace, you know providing detail, managing the feedback, managing the customer issues related to it you know so the customer facing side I think it’s done pretty well now and there’s a lot of tools associated with . . . that assist in that which is why I think it’s better than it ever was and you know it does put things on a level playing field so you know you don’t have to be a huge brand to present your product professionally and sell it and compete with a large brands.
You know it does enable customers to be a virtual company you know have an office with a couple of people, buy product overseas, source it effectively, you know and if you if you’re good at outsourcing like what we do, you know you can outsource everything. I mean you can be what really is a virtual business by outsourcing your every aspect of your business you know using software that’s so far as a service to page a go and you know utilizing the new trends and the new technologies to make yourself appear like a very large company that has a lot of a history and you know quality and support behind it.
DAVID ALADDIN: I feel like you’re like describing me. I’m technically a one-person team and I have virtual outsourced a lot of the work and you know I matched up against corporations right now and performing better in some keywords and what not in a lot of the guards.
TIM WERKLEY: Well you probably pay attention to it right? And when you outsource everything you’re only focus is on procuring product and selling it and the marketing associated with it. So you know when you’re a large brand you have a lot of turnover, you have departments that do different things, you’re probably coming out of a you know historically retail facing environment and getting into e-commerce you know so the culture and everything that is behind the history of the company is not necessarily modern you know but that being said companies with billions of dollars tend to find talent and do things well too, but obviously you are doing something right.
DAVID ALADDIN: You know I feel like people that have a strong technology background are going to have a way bigger advantage than the traditional retail kind of vision for it. I think the e-commerce landscape is changing drastically. I have a feeling e-commerce is going to dominate the playing field it maybe not in the next five years but over the next 50 years your warehouse will fly scale up in equivalent to the amount of . . . I see you smiling over it . . . in direct correlation to the e-commerce growing because people are going to be buying more online and it’s our generation that’s kind of . . .
TIM WERKLEY: No doubt, I mean you know you see the reports and the data about e-commerce growth and the history and the projections and you know it’s no, they’re not making it up. I mean it’s here to stay and you know everything it probably represents the fastest-growing segment of our economy right?
I mean just e-commerce in general which is a broad statement obviously a broad term but you know people there’s a degree of convenience to not going to the store you know as the technologies improve you get to really sample or see products differently and better than you ever did so instead of you sort of taking a guess as to what you’re getting you know you’re now able to get 360 degree views of the product you know reviews that are theoretically not painted or you know seeded at least and you know that the retail experience is being replicated in a lot of ways that wasn’t done before because it couldn’t be you know and so when you can get the logistical side of it done effectively and cheaply that’s where you’re displacing the retail right.
So you’re getting product into people’s hands in one or two days, you’re replicating the retail experience with shopping by being able to see it and touching and feeling it without touching and feeling it, return it easily, have a good experience you know they want to buy from you again and there’s no reason why it doesn’t extend into many different things you know that being said I probably wouldn’t buy like a refrigerator online but you know there’s a lot of things that I wouldn’t have thought I could buy online 10 years ago that I now do buy online. So it certainly is… it’s not going to be going in the other direction so.
DAVID ALADDIN: I agree with . . . I mean I bought about my car online.[Laughs]
TIM WERKLEY: There you go.
DAVID ALADDIN: It was risky.
TIM WERKLEY: You proved me right.
DAVID ALADDIN: You guys store cars over there? [Laughs]
TIM WERKLEY: [Laughs] Unfortunately no, maybe matchbox cars.
DAVID ALADDIN: We got about 15 minutes left I want to talk about things that I’ve missed out in this show. What have I missed so far?
TIM WERKLEY: What have we missed? Well you know the if you talk about you know the Amazon experience versus everything outside of Amazon and if we take a step away from Amazon and say you know what are you trying to be as a seller to your to your customers. What is the experience if you’re trying to create a brand for your company you know how do you do that?
And you know from a logistical perspective which is the thing that I can’t really comment on you know the good experience in shopping is important. So that you know what does that consist of it’s the website, it’s the ease of making the transaction, it’s the experience you have when you get the package which is a function of the packaging materials, that degree of branding, the presentation of the product.
You know I always liked the Amazons frustration-free packaging, I thought that was a great concept and tend to buy things that model as much as possible because it does you know I don’t want to have to rip open the clamshell packaging and cut my fingers with the knife to get to the product that you know is inside of it because the clamshell and those types of packages are meant to be put on a retail peg or shelf so that you can see them but an e-commerce you see them on the internet you don’t need to see it that way and in the delivery.
So you know doing things like that to where you create that positive experience. You know some of our customers take it to a very high level with dressing up the whole thing you know I could particularly subscription box type companies where there’s you know this whole WOW factor of opening the box and tissue paper and labels and stickers with the brand and all the little sizzle paper and just really sort of making a gift to yourself you know in a lot of ways. So you know the combination of all those things are what make a brand successful by retaining customers and yeah you know being able to grow into different product lines as well.
DAVID ALADDIN: I suppose you see a lot of packages every day and I liked how you were talking about what other sellers are doing in terms of our packaging. Let’s go more into that. What are some awesome ways to package our products that you see working well?
TIM WERKLEY: So you know the answer to that sort of depends on the seller and the product and the price points. So if you’re selling a very inexpensive product and your engagement with the customer from at the packaging material level doesn’t necessarily need to be you know very polished or appear very well. You know you can really send things out very inexpensively ways. So I mean we have automated bagging machines to put products into mailer bags and print a label on them and get them out the door you know and that doesn’t convey you know branding parse but it gets there easily and inexpensively and then conversely if you have products that are getting very high intrinsic value and you know electronics or anything really branded then you know you want to prepare them and pack them in a way that the customer experience is very positive and it costs money and it cost across time and it cost materials to achieve that but again it’s really just a function of what you’re selling, who are you selling to and the value of the product and then what you can absorb in all those cost to get it there that way.
DAVID ALADDIN: Yeah I agree. I’ve purchased some of my competitors’ products just to see how they package their products and everybody does it slightly differently. Some people go all out you know create the matte black look and like you’re saying the tissue paper and opening the box. Actually you know a whole community of unboxers will analyzing how well you package that product, very cool. I know we’re running out of time; how can people reach you?
TIM WERKLEY: So our website is a www.swanpackaging.com like the bird and my phone number is 973- 7908-417, my email is Tim@swanpackaging.com and I’m always happy to talk to sellers interested in our services or you know in what we do it’s often a consultative nature as well to assist them to figure out what direction they should be going with a lot of things related to logistics and then ultimately putting together a you know program for them that leads them in the right direction as well. So but yeah that is how you can find me.
DAVID ALADDIN: Awesome, it was a pleasure having you.
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