Our team at Fulfill has hand-selected top owners and operators from the Fulfill 3PL Network to interview.
The goal? We want to look beyond the shipping metrics and learn more about the people behind these impressive organizations.
Why did they start their company and how have they grown so successfully? What makes them different from other 3PL organizations?
This interview series is a great resource for:
1. eCommerce companies looking to learn more about the people behind the shipping operation AND
2. 3PL owners looking to learn best practice on creating a best-in-class warehousing and fulfillment operation
If you would like to nominate a great 3PL to be featured please contact us to apply.
Without further ado, we present you this week's interview with Steve Schlecht the CEO of Outbound Fulfillment.
Hello! Who are you and what company are you building?
I’m Steve Schlecht, and I am the CEO of Outbound Fulfillment, which we consider ourselves the experts in CPG Logistics. We provide services for DTC fulfillment, retail logistics, OTIF management, and more.
Our specialties
We specialize and only take on CPG brands or brands with a shelf life. We operate on a very different model than other 3PLs or warehousing companies.
1. DTC to Retail Program
We believe the holy grail for CPG brands is retail. Our ecosystem is designed for helping brands get ready and scale from DTC into retail channels, and then manage their shipping programs like OTIF once they get there. If you’re in retail, you are probably aware of the hefty chargebacks if it’s not done correctly.
2. Retail Consolidation
We consolidate smaller private label brands on a full truckload vs. an LTL shipment, which lowers our client’s total delivered cost which is a win-win for both the retailer, us, and our clients. Other entities may ship a retail order via LTL, but we try to avoid it at all costs by shipping your goods through our network or a partner network that has available capacity on a full truckload going to the same destination.
Success to date
Our collective and current experience includes shipping over 1,000,000 retail and DTC orders for both large and small brands while maintaining a >97% OTIF score. Retailers we have direct experience with include Walmart, Kroger, Target, 7-Eleven, Dollar Tree, and Whole Foods.
What's your backstory and how did you come up with the idea (or who came up with the idea and how did you become part of the vision)?
I previously worked at PepsiCo and as a Consultant running operations as a 3PL would or managing / selecting 3PLs for a variety of brands like Starbucks, Gatorade, Sol Cuisine, and Quaker Oats.
What I didn’t know at the time was that we had very high standards and processes in place, which I thought was the industry standard at the time.
One position that I was moved to while working at PepsiCo was managing and turning around a 3PL that ran a part of our business. The 3PL was a complete disaster. They were not equipped to manage food and beverage based products. Nor could they hand goods with a short shelf life and the standards/protocols necessary to ship into retail as we were getting hefty chargebacks. At the end of the year, we threw away $1.2MM in product from inventory that was either damaged, expired, or lost.
This started to become a reoccurring theme when I became a consultant working with other Food & Beverage based brands and seeing a lot of other 3PL operations. Eventually, I realized that there was a very addressable problem in the market for brands with a shelf life and our experience could directly solve it. With that said and our 10+ years of experience running operations as described, we launched and would we like to think we can provide an unmatched offering to CPG brands both large and small for their DTC and retail logistics needs.
Describe the process of launching the business.
Launching the company, I was still working at a full-time job in consulting and doing this on early mornings and weekends. To me, it was a safe environment to still figure out what was going to work and how to get customers. I would advertise to European clients so I could wake up early and take the call before my work day started.
The way I got my first few clients was that I leveraged social media channels and my past network. We used a keyword search using F5Bot to search Reddit anytime this keyword was in a post and it would then send it to my email. We would jump into the conversation, provide value, and landed some of our earliest clients that way.
I was in consulting at the time and had people pack my boxes (1-3 orders a day) for me while I was gone. I had a reasonable-sized small brand that I landed while I was on a project in Providence, Rhode Island. I put my 2 weeks’ notice in on my flight back to Chicago and went all in.
Traction started after 6-9 months once our message was starting to get out. It takes time but if you do the work, it will come around.
Financing – the company is entirely bootstrapped. I used about $6,000 of my own money to form the company, deposit for the small warehouse space, and necessary administrative items to get started. It can be done cheaper but don’t let this stop you. Eventually, we will probably have to raise some money to execute our vision, but for now, I own 100% of the company.
Biggest lesson – Just start. You’ll figure it out on the way and that’s the fun part once you start getting a few wins under your belt. You will not know what to do all the time and make some mistakes, but that’s part of the process.
Since launch, what has worked to attract and retain customers?
What’s worked since launch
Frankly, and there’s no incentive for us to say this nor were we asked, but Joe Spizak, the Fulfill team, and the content they are putting out there has been incredible. It’s helped us with us developing our marketing efforts and narrowing down what works. We are operators at heart, but Joe and his team has really helped.
Breakdown of marketing channels that have worked:
1. SEO: We have written articles for Logistipedia, which is the WebMD of logistics, and that’s driven traffic.
2. Conventions: In-person is still alive, and I would venture to say is one of the best converting methods of sales for us.
3. General networking: Networking within the CPG industry, competitors, vendors, and CPG community events in Chicago. There’s plenty of business out there. We try to go in with the ethos of helping everyone out and making connections without keeping score at all. It all comes around in the end if you treat it that. We have gained business where we have plugged vendors or experts in an area into conversations previously and they have returned the favor. The key thing is don’t keep score and help make connections where you can.
4. Cold outreach: Hyper-targeted cold outreach on LinkedIn and email has been helpful. The new theme we’ve found in sales is authenticity. We try not to be too 'salesy' with our pitches and get right to the point. It’s typically a yes or no, and I have even gotten on a phone call where the prospective client said my 2-3 sentence long email was the best cold email she’s ever received because of its conciseness and wasn’t 'salesy'.
How are you doing today and what does the future look like?
We believe the future is bright for us. There’s a pain point in the market where the solution that we have created has a real need which lowers our client’s costs, delivers better service and expertise, and helps them grow.
We operate out of a 40,000 SQF building in the Chicagoland area but have available space to us over 250,000 SQF in our partner network with plans to bring that in-house and launch facilities on the East and West coasts by Q4 2024.
Through starting or growing the business, have you learned anything particularly helpful or advantageous?
Advice
Use your personal story to your advantage: Use your past experiences to your advantage. I have no background in apparel, but when I get on the phone with a CPG client, I can talk all day since I have been in their shoes as a brand and an operator. It goes a long vs selling something to everyone vs. something to someone.
Leverage: Leverage social media and companies like Fulfill. Get your message out there as loud as possible. Leverage other 3PLs and their space so you don’t have the constraints of 4 walls. Take bigger swings on bigger clients. They are all people just like us. You need to have confidence in your message and solution when you do that, but it’s totally possible. They are all generally winging it, too.
Lastly, and I will say it again… just get started. You’ll figure all of this out on your way and things will accelerate in the right direction once you go full-time. If you fail, you have a great story to tell vs. what the equivalent of 10 years in corporate it would take to learn, which you can leverage if it ever came to that.
Mistakes
Tax Accountants: Get a reputable tax accountant that knows what they are doing. Our first accountant would defer all questions to very junior staff, which was a red flag, and gave us wrong advice that took us several weeks to unwind. I would recommend getting a tax accountant in the local area you’re in.
Contracts: Get a Master Service Agreement (MSA) in place that’s good and solid. It’s ok to use others in the market, but get a lawyer to review it and make sure it’s sound. Fortunately, we never encountered any issues, but some gaps were not covered by the first version of our contract
Insurance: Get proper insurance to cover your building and your client’s inventory. It will make you sleep better at night and just good business practices.
What platform/tools do you use for your business?
Favorite tools:
1. WMS: ShipStation was pretty good as a first solution. We are on Extensiv for the time being and will probably transition to a WMS that can better track lot dates and expiration dates.
2. Google Drive: We keep it simple. All folders and files for clients with shareable access are stored in Google. It’s cheap too.
3. LinkedIn Navigator: Great for cold outreach
What have been the most influential books, podcasts, or other resources?
Self-help books are good to get you to the starting line, but you’ll quickly realize once you jump that there is no playbook to get you where you want to go. Try a bunch of things. See what sticks. And repeat.
One recommendation - EOS is a super good book for creating systems, processes, and defining culture once you get to a certain scale.
Advice for other entrepreneurs who want to get started or are just starting out?
Keep your day job while you’re iterating on ideas but just get going. I’ve started a ton of business ideas that haven’t worked out, but I had the safety of a salary to fund these little experiments while I figured out what I wanted to build for the next 10-20 years.
1. Morel Mushroom company: Failed. They bloom once a year.
2. Military-themed apparel company: Failed. I was not in the military and didn’t have a great story to tell about it.
3. Reverse Logistics Tech Solution: Failed. Wasn’t enough of a day-to-day consistent need.
4. Cleaning Company: Failed. Lost interest after my 1st cleaning. The first cleaning was a move-out clean and turned out to be a prince from eastern European royalty going to a nearby MBA school and he lived in filth from all of the parties he threw. I walked in, assessed it would have taken me a day or so to clean all of the filth and wine bottles that were left, turned around, and closed the business lol.
5. Marketing agency: Failed. I didn’t have a lot of experience. If I was that interested in it, I would have gone back and worked under someone for free or at a company.
Are you looking to hire for certain positions right now?
Not at the moment! We will be soon but reach out if you think you have a good skill set and there’s interest in what we are doing.
1. Sr. Operations Manager – Help with expansion plans and managing day-to-day operations.
2. Operations Manager – Help with managing OTIF for various retailers and building out our in-house solution
Where can we go to learn more?
● Website: http://www.outboundfulfillment.com
● Instagram: www.instagram.com/outboundfulfillment/
● Twitter: https://twitter.com/SteveSchlecht
● Our email: info@outboundfulfillment.com
