Ecommerce sales companies often are great at marketing, but can fall short on packing and shipping.
Rick Nelson, founder and owner of The Fulfillment Lab Inc. in Tampa, has developed technology that helps ecommerce sellers present a more complete package to their customers.
Like other fulfillment companies, The Fulfillment Lab provides warehousing, picking and packaging, shipping and delivering to the end consumer, using FedEx, UPS, the U.S. Postal Service and other carriers. But the Fulfillment Lab uses proprietary software to customize the packaging and increase brand awareness, which Nelson said allows ecommerce sellers to develop stronger relationship with their customers.
“When consumers buy things, they want to feel good about them,” Nelson said. “For our clients, this helps them retain customers and hopefully get some repeat business.”
The Fulfillment Lab has been largely under the radar since it was launched eight years ago by Nelson and a former partner, but now is ready to market itself more widely in the $55.6 billion fulfillment services industry.
In 2012, Nelson and his former partner were working with manufacturers who made products for ecommerce sellers. They saw that the sellers were always running out of products.
“We started looking at the software. We found the software was written for many different types of fulfillment centers to fit their models, but it was not written for many different types of clients,” Nelson said.
Nelson started looking at fulfillment technology that would be client-centered.
“We didn’t want to do an out of the box solution, so we started writing it and developed standard operating procedures of how to do fulfillment internally. We wrote that one way and once we did that, we were able to create flexibility around it to be able to do anything customers wanted,” he said. “We can do very custom development projects for one customer, and it doesn’t break our process.”
The fulfillment process starts when orders come in from the shopping carts and customer relationship managers on ecommerce sellers’ platforms. The information is then distributed to a fulfillment company for shipment.
“We validate what they are shipping, which warehouse has inventory and makes sense to ship from based on their end destination, whether they want a faster solution or a less expensive solution. The software will automatically do smart routing for them,” Nelson said. “The unique piece is the ability to not just take the address information but any marketing information they have collected about the buyer – their state, their age, their birthday, if they are repeat buyers — and we can set up shipping profiles and we can make specific decisions about the packaging to better relate to that end consumer. That’s where that perceived value comes in. The consumer feels better about what they bought because the packaging relates to them.”
The Fulfillment Lab grew quickly. It was on the Inc. 5000 for two years, in 2016 and 2018.
Now it’s ready to expand more. Nelson, a third-generation Tampa resident and Cuban American entrepreneur, bought out his original partner and is the sole owner. He expects to add a warehouse in northern Kentucky or Ohio to the U.S. warehouses he already has in Tampa and in Salt Lake City.
“That third warehouse will cover the northeast U.S. and improve delivery time, so we can do one-day or two-day shipping everywhere in the U.S.,” he said. “Right now we can do three days and under from our two facilities, so it lets us get close to the one-day and two-day deliveries.”
The company also has several international warehouses run in conjunction with partners who use Fulfillment Lab software.
Employment fluctuates, with both permanent and temporary employees, but in any given month there are about 70 workers. About 30 are full-time Fulfillment Lab employees and the rest are part-time or come from temp agencies, he said.
In the next three months, Nelson expects to launch an affiliate program for companies that are offering services that complement those offered by the Fulfillment Lab. Potential affiliates are customer service centers who handle calls for ecommerce sellers, manufacturers and social influencers who help small business owners get started in ecommerce.
“We’ve built a portal on our software that allows them to get a code. They can send it to their customers and if those customers sign up, the system tracks that and they get compensation,” he said.
Fulfillment is a capital intensive and volume-based business.
“With high volume you are fine,” he said. “Fortunately warehouse space is not retail, so from a square foot standpoint you get a good price point because its industrial space environment, rather than commercial, so it can be off of the main path.”
Nelson said he has funded the company on his own and the Fulfillment Lab has no debt.