Ecommerce Inventory and Labor Challenges With Steve Syverson From NFI eCom - Ep. 48
In This Episode
Having worked in the logistics industry for 22 years, with 10 of those focused on ecommerce, Steve Syverson has had countless opportunities to hear from small business owners about the challenges and uncertainties they face. In this episode of Unboxing Logistics, he answers some of their most common (and pressing) questions.
Should you use staffing agencies during busy times? How can you choose the right warehouse technology? When does using a 3PL make sense? Listen to learn the answers!
How to boost staff morale during peak season
Peak season can be incredibly stressful for business owners and employees alike. The key to smooth sailing, Steve says, is finding ways to ease the load on staff. That could involve anything from pizza parties to flexible work schedules to bringing in temporary workers.
“Don't layer more stress on your teammates—they're already stressed. Your job as an owner of a brand or a business is to … figure out ways to mitigate some of that stress. Because at the end of the day, you want them to perform at their highest level.”
Common SMB inventory management challenges
Steve describes one pitfall ecommerce businesses often fall into: “What I see with SMBs typically is they tend to overbuy or overestimate demand. [This] puts them in a really tough position from an inventory perspective.”
While overstocking leads to inefficiencies in the warehouse, Steve points out the bright side: it doesn’t necessarily affect customers. Stockouts, on the other hand, can destroy the purchase experience and cause you to lose customers.
The solution? Use technology to forecast demand accurately and gain visibility into stock levels. “Without those insights, without the technology platform … you're setting yourself up for failure because you're just not going to know what you have.”
Pros and cons of working with a 3PL
In Steve’s experience, the biggest hurdle brands face when deciding whether or not to work with a 3PL is the “perceived loss of control.” However, once they make the leap, “they never look back, because now it's given them the ability to scale their business. They're focused on going to shows, to conferences, building strategic partnerships, working with new vendors, finding new manufacturers … and marketing their brand.”
Links
- Connect with Steve on LinkedIn: https://www.linkedin.com/in/stevesyverson/
- Visit NFI eCom’s website: https://ecommerce.nfiindustries.com/
Transcript
Lori Boyer 00:00
Welcome to Unboxing Logistics. I'm your host, Lori Boyer of EasyPost. Today, we are going to be diving into two of the most massive hair pulling and and just all together, irritating challenges that every single person in the industry has to deal with. But we're especially focusing today on our SMBs, our ecommerce market.
We're going to be talking about managing labor challenges and managing inventory challenges. So so important. I know I've heard from so many of you that these are just a big problem. So I have brought on Steve Syverson. From NFI eCom to teach us a little bit about what we can do to manage these challenges.
Steve, can you introduce yourself a little bit and tell us a little bit about your background?
Steve Syverson 00:55
Yeah, of course, Lori. Thanks for having me today. I'm excited to be here with the EasyPost team. So again, my name is Steve Syverson. I'm the senior director of ecommerce customer solutions here at NFI eCom. My background has been in the logistics supply chain space for about the past 22 years.
A majority of that time was with FedEx and various sales roles and specifically working in the SMB mid market space, the last 10 years in ecommerce alone. So I've got a background in launching micro fulfillment centers, critical inventory logistics, building sales teams, launching new product lines. So I've got a great background, I think, to discuss some of the challenges SMBs face today. So again, thanks for having me.
Lori Boyer 01:40
That's incredible. You should be Steve who has done it all, Syverson. It sounds like. 22 years. That's incredible. So I'm really excited for the insights that our audience is gonna be able to pick up from today. But before we get going, I just wanted to ask, we've been this season asking one question to each of our guests.
And I've gotten so many ideas from this. So, what, Steve, is your go to comfort food?
Steve Syverson 02:11
Go to comfort food. I would say my wife will kill me, but probably like a really good meatball sub.
Lori Boyer 02:21
Okay, first, why will your wife kill you?
Steve Syverson 02:24
She just probably wouldn't want me to eat it, but I would say a meatball sub, yeah. Pizza, pizza's a very close second, but.
Lori Boyer 02:33
I was gonna say pizza is always one that I can go for. That warm but boy a meatball sub sounds great. So do you like to make your meatball subs at home or would you pick one up at a restaurant?
Steve Syverson 02:43
Yeah, I have a couple go to places.
Lori Boyer 02:45
Okay, so team if you're out there, you're hitting up Pittsburgh, Steve's the guy to get you that meatball sub. I love it.
So as we dive into our topic today, I'm really excited I want to hear if somebody is listening today and they only come away with one or two or three things. What are the most important thing you would want them to remember from today's episode?
Steve Syverson 03:10
I would say at this point, really understanding their customer and demand and leveraging technology as an SMB.
I'm not even leveraging, I would say embracing technology. I would say, find, find a good peer or association group to get in touch with. And understand it will save them so much time and pain because someone inevitably has been down the path they're looking at and they know the good and bad it comes out of that. So.
Lori Boyer 03:47
Brilliant, love them. I'm going to ask you a couple of questions real quick on each of those. So you said understand your customer demand and I was interested in that. How do you feel? Is there a difference between understanding your customer, you know, just kind of their demographic and who they are and your customer demand? What is the difference between those two?
Steve Syverson 04:06
Yeah, I think you really may need to look at industry trends. So understanding their customer, they know they should know who they're going after, right? What's the demographic that's buying from them? Let's just say it's a lifestyle apparel brand. Most likely, they built their, their company around the type of individual they're looking to sell to.
And then how do they do that? So trying to forecast that demand, I think is really looking at the industry. What's happening with, if it is apparel, we use that as an example, what's going on in that industry. You know, right now, the biggest thing going on is the three, two, one. And the conditions by the current administration, what's happening there.
So if I'm an apparel customer that greatly impacts my operation, my demand what is going on with it, with that space. How it impacts me. How do I pivot? All those different things. So I think there's a lot of variability with that. But really understanding the demand from their customer. What do they see down the road?
And I think I talked about technology. Really leveraging some of the new AI tools, predictive analytic tools that are out there to help them doing that. Looking at historical data from sales. Why are customers buying? Why are they winning? So all those things factor in and help them kind of understand what the demand would be in the future.
Lori Boyer 05:25
Okay. I love that. And I thought it was interesting how you switched from, for your number two, you said it was about technology and you kind of switched from leveraging technology to embracing technology. How do you see those as different?
Steve Syverson 05:38
Yeah. So I think it's, there's, there's a lot of really cool tools out there and platforms. And I think people want to, they want to adopt them, but they don't really know how to use them effectively and what's the best fit for their company. You know, there's so many different features of service, but likely SMBs don't need all of those. So I think establishing what you're trying to accomplish with that tool before you actually go out and implement or adopt a platform makes a huge difference.
And there's, there's opportunities plenty out there providers, but really what's the best fit for your business? How do those align with your goals? And what you're trying to accomplish with your brand.
Lori Boyer 06:18
And so it sounds like one of the things I'm hearing from you is you've really got to understand yourself, understand your customers.
You just have to have a really good knowledge. Some people get a little bit of the surface level and kind of take off and, and that runs into problems. Any suggestions around those peer groups how to develop those relationships? Cause I completely agree with you, especially if you're talking SMB, this is critical.
Steve Syverson 06:43
Yeah, great question. So, you know, there's a number of ways you can get involved in those. LinkedIn is always a good platform to try to find out like like minded businesses or groups that you can associate associate with. So I wouldn't say join some of those, get involved with those. Also, conferences are a great way to meet people that are doing something very similar to you.
I leverage those quite a bit in our business, and a lot of those just become relationships over time. A lot of these strategic partnerships that you form or alliances over time make a huge difference for your business. And again, goes back to a lot of people have lived through maybe what you're experiencing for the first time, and they can share that, save you a lot of time and pain.
And they can share best practices as well. Peer groups are a great platform to do that, but I would say conferences and LinkedIn are, are a great way.
Lori Boyer 07:32
Yeah, and just reach out to people, you know, you're, you may be surprised. There are times when you can shoot an email to someone that you've seen on LinkedIn or you can send them a message and they may be happy to, to chat with you and mentor.
So just don't be afraid. I love that. So let's talk about growing. So I think for this audience in particular, growth is a constant battle. You know, they may start small and they may have, you know, grown. Hopefully their goal is to grow to the point where they're, you know, established and larger. What are the, some of the biggest challenges that you've seen over the last 22 years of especially when it comes to logistics, that's a really big pain point for our SMBs.
Steve Syverson 08:16
You know, today we're talking about labor and inventory. How do you, how do you, those are really big hurdles for SMBs in this space. So you know, I'll give you some of the challenges first, and then maybe some of the ways to get around those. From a labor perspective, it's very hard to hire people, especially in today's climate.
So, how do you do that as you're scaling your brand? You know, I would say, if you've got your teammates and you have a kind of steady state business, you're looking to grow at that point. I would consider using agencies or looking to outsource because you can really extend your team quite a bit and overwork them. So I would look at vetting agencies.
Lori Boyer 09:02
Is there a point, Steve, where you feel like, okay, this is the tipping point of maybe when I should start looking at agencies and outsourcing?
Steve Syverson 09:08
Yeah, I would think when you, when you get a sense that your staff is, is overworked. Too far, when you have people doing multiple jobs, they tend not to do each one of them very well, or at the highest level.
So, I think as a business owner, a brand owner, you need to, you need to be involved and understand is my staff now stretched too thin? Am I exposed? What kind of risk do I have if people get sick? If the new DC opens in the same area, are they gonna pull staff away? All those different things. So that's certainly a big one.
On the technology front, there's, there's so many different platforms you can have to increase efficiencies to, to make sure you're managing labor effectively, using predictive models to create efficiencies to increase accuracy. You know, your overall goal is to create a positive customer experience for the person that's on the end getting that package. So how do I do that? What are the things I have to do internally? Manage. What kind of risks do I need to mitigate to make that happen? I always focus on the CX, the customer experience. Everything I do behind the scenes, they don't see. They just know that they got the right item.
They got the right order when they wanted to have it, and it was a great customer experience. And you want them to buy again. So. I think there's a lot of variables that come into play with that.
Lori Boyer 10:28
So I know labor is just a big challenge in general. So I'm going to kind of back it up a little bit with our labor.
So do you have suggestions for, first of all, how to create, especially, I think, Steve, as we're into peak season and stress goes up and customer expectations, this is something for our, you know, Unboxing Logistics family out there. I hope you know that during peak season, customer expectations actually rise when it comes to shipping and logistics and everything. So during your most stressful time is also the time when people have the highest expectations for you to be performing well. All of this leads to a lot of stress and challenge on your workers that you do have. So do you have suggestions for kind of keeping morale high?
Or for, you know, creating a good work environment first for the labor that you have. And then we'll talk a little bit more about, you know, the labor you don't have, the outsourcing and whatnot.
Steve Syverson 11:25
Yeah. So I think there's a number of ways you can do that. I mean, the things that we've done here at NFI as well.
So you want to create an environment where everybody feels they have an opportunity to be successful. So you also want to create an opportunity for bonuses. Maybe there's some merit based opportunity. Maybe you have some in house parties. You have pizza brought in. You have a cookout. You just create a little bit different environment that feels outside, especially during peak, feels outside of what the normal day to day is.
Because there is an increased demand, there's increased stress. We've offered flexible work schedules to people if they need, maybe not during that time, but post peak. If you do this, then in January or February, we'll give you an option to take, you know, a day off for an extra weekend or things like that.
So I, you know, my message would be be creative, don't, don't disrupt your operation, keep everyone engaged, but create an environment where they're all working towards the same goal. They feel good about it. They feel like they're part of the team. And that offers some different creative ways, different options for them, either a flex work schedule or parties or bringing in food.
You know, we have customers every year during peak that host host food for us and they'll pay for it.
Lori Boyer 12:39
We all love food, Steve.
Steve Syverson 12:41
Yeah, we'll have pizza days, we'll have a cookout and a lot of our, a lot of our clients will, will pay for that. They'll cover. Because they know that our teammates are going above and beyond and I've done that with other companies.
So I would say get creative. Think differently about it. Don't don't layer on more stress on your teammates. They're already stressed. I think your job is as an owner of a brand or a business is to kind of carry that and figure out ways to mitigate some of that stress, some of that pain. Because at the day, you want them to perform at their highest level because your customer is what matters.
Lori Boyer 13:17
That brought a thought to me, Steve, as you said that about, you know, you want to make sure that you're creating, as the owner, as the, you know, driver of this business, the right atmosphere. I think sometimes as the owner, we get stressed out.
And that may convey down as well. What are your thoughts on, I guess, how, how does the owner themselves impact the morale based on when they are stressed out?
Steve Syverson 13:46
Yeah, I mean, and I've seen this, you know, the, if you're the leader, I think you need to be the calm person in all of it, even though you may experience a storm yourself. So.
Lori Boyer 13:58
Inside you're freaking out!
Steve Syverson 14:00
Well you know, my advice would be, and this is really pretty obvious, but don't, don't put that on your team. They can't feel that. They need. They should feel the opposite. They should feel like we're, we're succeeding. We're doing a great job. The business is growing. This is great.
Long term opportunity for all of us. But I would say as an owner, like take steps before peak to mitigate some of this risk. Develop relationships with suppliers, with agencies that gives you flexibility. So, when you need to call or ask for a favor or for options with your supplier or any of the local vendors, you have that option to do that.
You can't, you can't do it during peak. You've got to put that before.
Lori Boyer 14:47
Almost upon us. We're here in, in Q4. So let's say we're, you're going about your day, you have a fantastic sale or even just a surprising spike. This is going to hit over into inventory as well, but you, you've got a big sale that happened and wow, sales went through the roof.
Some of your best people are suddenly sick. You know, what are your suggestions? You mentioned creating relationships. Just how do you manage this when you've suddenly experiencing a labor shortage?
Steve Syverson 15:19
Yeah, I mean, I go back to, again, you have to have some, you have to take some steps in advance of this. If you haven't done that, that's what you're asking.
Now, now I'm stuck, right? I've got a product that just went viral because some influencer wore my hat and T-shirt at the beach. You know, with your current staff, you have some people out. You're gonna have to ask them to maybe work a weekend. You're gonna have to pay them a little bit differently.
Again, get creative with options. If you work this weekend, two weeks from now, you can take a three day week or whatever it may be. But I would say effectively communicate early and, and follow up on what you say you're going to do. If you're going to get, if you're going to be flexible with them, make sure you follow up and do that.
Don't extend promises you can't keep. And again, if you have to go to an outside agency, I would stress vet them before, make sure they're reputable. There's a lot that aren't unfortunately. Some of these smaller staffing companies. I would keep a short list as you go throughout the year, make that part of your planning, create a short list of agencies.
Staffing companies that you trust that are vetted that you can go to. In this scenario. Hopefully you can call him and say, I need 5 people for a Sunday. What can we do? How do I do that? But again, without, without the advanced work, it's it's it's a challenge for sure. So these are assisting staff. I go back to technology.
This is why you need technology. You need to leverage that. That will create efficiencies, reduce errors. It'll be predictive for you on on shipping, on anything like that. Leverage automation anywhere you can. Reduces the amount of staff you need. You know, there's no magic bullet for I need 10 people on a Sunday. That just isn't get creative and leverage what you have and try to create an environment where they feel like if they do X, they can get Z at some point.
Lori Boyer 17:18
Yeah, I think that so you touched on a couple of, I think, really key things there. Technology. Automation, that really can be your best friend. When it comes, it doesn't mean you have to fire your staff or that you need fewer people, but it makes their jobs a lot easier and it's a lot easier to handle. You know, they don't mind.
Technology doesn't mind working 24 hours a day, seven days a week. But also it reminded me when you said, you know, the peer networks that you mentioned earlier, this may be the time if you don't know a good agency, if you, you know, haven't developed those relationships. Steve is so on the nose that you need to do this before peak. If you haven't, if you're listening today and you haven't done it, as soon as this episode ends, please start reaching out to your network, figure out what agencies you're going to use. Put into place whatever you can right now to develop that. But I think reaching out to those peers, again, is important.
As you said, they've been there before, they've done it. They've handled it.
Steve Syverson 18:19
Yeah. And ask them that very question, right? How are you handling this? I'm sure you've experienced this. What happened last week? I don't want to mitigate my risk. You have any suggestions. That people will jump in there. They're really supportive.
Lori Boyer 18:32
So good. So good. This is a very relationship heavy industry, and people are really good about helping one another. Steve, so I know I can just hear our community out there saying, Lori, what about cost, cost, cost, cost? You know, some of these things are sounding a little expensive. How do we balance sort of the cost management piece with your labor?
Steve Syverson 18:56
You know, I would again go back to technology. You need to look at what your historical sales are and what you think your demand will be. That really helps you plan your labor. Make sure you're paying competitive wages but not overpaying. Make sure you're not, maybe it's, maybe adding one additional teammate versus having everyone work overtime on a consistent basis is a better option for you. Again, go to your peer group and say, how are you handling this? What is the right time to add additional staff? Or is now the time to adopt a technology that will help me create efficiencies, increase accuracy look for redundant tasks that I can automate?
Maybe I don't need an additional person. Maybe I just, I invest in this technology and it helps me leverage that to do things, you know, there's a lot of redundant tasks within a warehouse in the fulfillment center that you can automate. So again, ask people, how are they doing it? You know, if you're, if you're starting to entertain a technology platform a warehouse management system, an order management system, that's a little bit more robust than like a ShipStation, for example, and your business starting to scale.
Really look at what features are important to you, and and see how those align with your business growth goals. Because there's a lot of feature rich platforms out there, but you don't need all of it. And maybe you can phase that in, right? Talk to the provider and say, you know, is this a cloud based solution first and foremost? Does this provide me scalable, flexible solutions within my network? How does it integrate? Is it scalable? And what is the cost to do that? And then what kind of support network do you have for this for this platform? I'm sorry. Thanks.
Lori Boyer 20:41
Yeah, absolutely. I love the I just can't say this enough for this audience is looking at technology that will grow with you, that has the features available you'll need in five years, but also you don't necessarily need to pay for them now.
You know, all of that, that it's gonna just scale and grow with you. I also really loved how you mentioned in the warehouse. Talking to people about bottlenecks. Because I feel like sometimes we forget, you know, especially you're the owner and you're busy and I heard someone call it once the staying in the ivory tower a little too often.
And sometimes we need to be boots on the ground in the warehouse looking for those bottlenecks. And where are those slowdowns? And where can you automate? And where do you need to train people? The people in and who are there doing it every day are the ones who know.
Steve Syverson 21:31
Yeah, I love that. I am a huge proponent of walking the floor, being out there. You know, if you're an owner of a brand, if you don't know every process, from receiving, put away to then the order fulfillment, then pack out, and the shipment of that product and then the reverse returns piece, you're doing yourself a disservice. You should know everything from A to Z in your operation.
Talk to your people, as you said. Create a feedback mechanism. Meet with the teammates monthly, understand what's going on in your operation, because the easiest thing to say is, I just need to add staff. I need to add, throw labor at it. That is normally not the best thing to do. Almost in every scenario.
That's probably the last thing you should do. Look for opportunities to gain efficiencies within the existing operation, listen to your teammates. And embrace some technology to do that. What's the right fit? So really, I look at what the problem is. What's the root cause? And then I start to align. What is the solution for that?
What's the best solution today? And then how do I scale that over time?
Lori Boyer 22:35
Oh, that was so good. I, yeah, I love that. The whole blurb from Steve of, you know, just throwing new employees at the problem is not usually the answer. Almost never. Sometimes it exacerbates the problem instead. So totally brilliant.
Let's talk inventory, Steve. Why is inventory management specifically just such a headache for those in this kind of sphere?
Steve Syverson 23:02
Yeah yeah, this is such a broad topic. Really if you know, and I'll tell you on my experience. What I see with SMBs typically is they, they tend to overbuy or overestimate demand.
Which puts them in a really tough position from an inventory perspective. And I think what goes along with that, some of the overbuying, the drivers for that are just the per unit cost. If I buy a lot, I pay less per unit, it helps my balance sheet, things look better. But now, I've overestimated demand and I've overbought and I only have a 5, 000 square foot space.
What do I do now? Now I put my employees in a position where they're moving boxes around to get to another box and it becomes a checkerboard, which is never good. Creates a whole host of issues and inefficiencies. But it's really, it's overbuying or overestimating demand and then not having an inventory tracking system, or at least an effective one through technology to manage my inventory. So to meet this ability and insights are absolutely paramount into your inventory. If you don't have that, I find it hard to believe you'll succeed long term. And I've seen so many just negative impacts from someone not having an inventory management system, not having a warehouse management system, not understanding what they have, you know, you have scenarios where you you have stock outs, or you've sold items you don't have, and you may not even have them ordered yet.
Technology provides a stopgap for that. You know, when I, when I set up my WMS, I have my entire product catalog, my inventory within that system, and I can set alerts or parameters. When it hits a certain inventory level, it'll auto reorder, or there'll be an alarm, or someone gets a message. Down to 100 units, time to reorder, anything. Without those insights, without the technology platform, some mechanism to track all that, you're setting yourself up for failure because you're just not going to know what you have.
And again, going all the way back to the CX, if that's not creating a bad customer experience, I don't know what is, right? As a consumer, you order something and you expect it. It's not showing sold out or back order on a website. I expect it in a few days. Now I have to go back to the customer. That's costing me money.
I have my team calling a customer. It's not a positive experience. And I can, I get to tell them, hey, I won't even have it for a month. So now you've lost customer longterm. So some of those things sound a little bit simple, but things like stockouts are absolute nightmare.
Lori Boyer 25:38
So Steve, then I, I, so stockouts, huge challenge, but on the flip side, you said one of the biggest mistakes you see is people overbuying. So how do you, I guess, which is worse in your opinion, first. Overbuying or having a stock out? Put that on you.
Steve Syverson 25:56
Yeah. So obviously they both impact your balance sheet, but I would say I think having a stock out is probably worse because my customer doesn't know that I overbought. That's a bad decision on my part.
Now I just had a look. But to me, I, again, everything on the customer, that to me is more of a negative. If I didn't see, if I see something available on your website, I expect that I'll receive it. Overbuying, that's, that's inventory. Now I have to figure out how to manage that. Again, go back to tracking. Now I have extra touch points within my warehouse or my facility to move things around. If it's seasonal, what do you do with that stuff? If you over bought it now, you have 10,000 extra units that summer. Now, you're going into fall. Now, you're going to hold that for a whole another year. You know, I've seen SMBs and say, oh, my God, I just put down a 20 by 20 storage unit for excess inventory that I'm paying 250 a month for. Again, not cracked.
I don't even know what's really in there at this open up boxes and do that. So there's just so many issues without it. And, you know, my, my message is leverage some sort of tech platform to do that. If you want to scale your business, if you want to grow your business effectively, efficiently, I would suggest, you know, investing in that or for working with a 3PL that has the technology in place today.
You know, leave it to the experts, you know, you know. I talk to brand owners every week and none of them say I really love the process of receiving goods, putting them away and then fulfilling orders and shipping them out.
None of them ever say that. If they do, I probably wouldn't believe it. But I say leave it to the experts. Leave it to the people that have the buildings that already have technology in place, that already have a staff that's trained, that understands it. You benefit from the economies of scale within those fulfillment centers.
They also have preferred shipping rates. Which you probably can't get on your own. So.
Lori Boyer 27:56
Yeah, yeah, for sure. There are a lot of options out there that small businesses don't realize. You can use others and lean on. Again, we talked about those peer groups, but there is a lot of expertise out there that can help you.
One of the things that I was thinking of as you were talking was about inventory accuracy. So, you can have all the technology you want, but if it's not accurate. So what, what tools, I guess, would you suggest early on, let's say that Steve decided to set up his own business, you had a somewhat small warehouse, what tools, what ways are you ensuring that your inventory counts are accurate?
Steve Syverson 28:36
Yeah, I I would again, get get a technology platform that is very good at that. I'm not going to name specific companies or commercials, but anybody can follow up with me. I'd be happy to have a one off if they want to talk through those. But you know, it's really capturing that data on the receiving end of it.
Because if it doesn't come in and it's not captured correctly, the rest of it is really garbage coming out. It's never going to be accurate. As a, as a business, or I would say, focus on the intake, the receiving of those goods. Make sure your vendor is delivering what they said, make sure it's marked correctly.
So you think you're putting away a certain style size, make sure that's what it is. Check your, check your inventory but make sure your tabs showing the right information on the receiving piece of that. And then that's being logged in. So whatever mechanism you have, it's a barcode that you're scanning.
If it's something that you've already set up in your system and your product catalog is already established. Those SKUs and number of units need to coincide with what you receive. That's the only real way to capture that on the front end. If that's not right, then the rest of it's going to be a real challenge for you.
Lori Boyer 29:50
I love that piece of advice to focus on the receiving. Because sometimes people do get confused, and when should I be paying most attention? Okay, so we've talked about, you know, contracting out, you know, moving things over, using a 3PL, for instance. What? So let's say that I think, okay, you know, or Steve had his amazing business. You're now thinking I need help. This is a lot of work. What things should kind of the SMB type size business be looking for when they're going to a 3PL? Contracts. What is I guess what is common in the industry? What should they expect?
Steve Syverson 30:28
Yeah, so I think I'll kind of go to the front end of this and say, as a brand, kind of what they see, the biggest hurdle I see is the loss of control for an SMB. So they've typically homegrown this business and they have it, you know, maybe by their house or within a couple miles, somewhere they can drive to every day and look at that inventory.
Lori Boyer 30:50
They can go at night and pet their little stuffed animal. It's, it's, it is, it's hard to let that go.
Steve Syverson 30:57
Completely understand. So that loss of control, perceived loss of control, is a big hurdle for brands to get over.
Based on my experience, once they do that and they make that leap, they've identified a 3PL or a partner that they feel good about, that they trust, that's established, that has a great reputation. They are so happy, they never look back, because now it's given them the ability to scale their business. And they're focused on going to shows, to conferences, building strategic partnerships, working with new vendors, finding new manufacturers, all those different things they should be doing as a business owner, and then marketing their brand.
And growing that. So, you know, I always say the 3PL, whoever your partner is that you choose, they should be almost invisible to you. It should be. I just know my inventory is going there and my orders are being fulfilled accurately and on time. And they're, they're, you know, they're providing a service that I feel really good about at a competitive rate.
That's the way that relationship should be. Flip side of that. The 3PL or partners should be very proactive. So as you're looking at different partners, find one that has a track record that has history of being proactive with their customers and then ask them to kind of demonstrate that. Help me understand how you've done that for a brand.
Let me talk to them. Do you, do you simply just push out information, but you don't offer any solutions, anything forward looking? That's always a problem. And I hear that quite a bit.
Lori Boyer 32:24
So they're okay saying to the 3PL, hey, can I talk to some of your other current customers and see what their experience is? You recommend that?
Steve Syverson 32:32
Let me, let me talk to some companies that are my size. What have you done for them? You told me you do all these things. Now, help me, help me talk to someone, right? Help me, help me get in touch with them. I think that's always good to do. And if a 3PL is resistant to that, there's normally a reason, like, like any buying decision.
So, but things I should look for, what technology platform that they're on today, does it, does it align with the goals? Is it overkill? Is it not enough? What kind of support do you have for it? Where are your locations? How many locations do you have? What capacity are you in today? For example, if you talk to a 3PL and they have one location in the middle of Arkansas and your customers are all over the country and they're at 85 percent capacity and you have a growing brand, it's probably not a great fit for you.
Lori Boyer 33:21
Okay, so location, number of warehouses capacity that they have, the type of capabilities, the technology they use. The custom, you know, being able to talk to other customers. These are all really good specific things you should look at. In addition, Steve, what about customer support? So not just if you as the SMB have problems, but if your customers have problems with their package, like what is typical for a 3PL to offer?
Steve Syverson 33:53
Yeah, so some of the smaller ones, even the larger ones, you'll find a customer success manager and account manager. Typically, they won't be a one for one scenario, but an account manager or someone assigned to your account will have multiple accounts, and they'll support it. What my advice would be is do not have an expectation of brand that they're going to do everything for your account.
They're not going to manage your business for you. They're likely not going to track packages for you. I think there's opportunities where brands say I can just outsource everything and they're going to do everything because I did. That's typically not the case. You know, they're going to offer solutions for you.
They're going to be your liaison between operations in your business. They're going to make suggestions if there's some efficiency gains. If there's opportunities to change packaging change shipping methods, things like that, they'll make recommendations and they will help you resolve issues.
But I wouldn't, I wouldn't consider them your outsourced customer service person.
Lori Boyer 34:51
Okay. So you are still, you need to still own that customer. You know, it goes back to what you were saying at the beginning, Steve, understanding your customer demand, understanding your customers themselves. All of that is still and forever and ever going to be a crucial part of running your business.
Steve Syverson 35:06
That will never change. Absolutely. And you know, they're typically not going to talk directly with your customer, nor do you probably want them to, right? They're not, they're not your brand. They work for the 3PL. Their job is to make sure things run efficiently in the operation and make recommendations to you to help facilitate that.
But you want to keep that brand connection. That's the, that's the company.
Lori Boyer 35:29
Okay, so let's just talk really quickly. Future trends. What do you see? Steve looks at his crystal ball. You know, what do you see coming down the line when it comes to labor, inventory management? What do you predict for the future?
Steve Syverson 35:43
Yeah, I mean, we've had this, we've had this flexible workforce, I think for a long time now. People are getting used to that. So I think that the evolution of that is more regional type players that are doing that in market. Seeing some of that, I'm seeing a big push for automation and AI tools to do this advantaged labor and inventory.
That really comes down to understanding your data. It's all about trying to be predictive of what's going to happen. And that's such a buzzword, right? How do you do that? Nobody can really predict the future, but you can leverage data. And there's platforms that can help you do that. To help you help you understand what demand is.
How do I plan for this? But I go back to this is not technology based, but developing those relationships in your slower periods. So now, as you get into your fat, your peak periods, your high volume growth periods, you've got the relationships, you've got your short list. But now I'm also leveraging data AI tools to help me plan.
All those things together work really well. I, you know, I cloud based technology for flexibility. You need to be able to access this data anywhere. So if anyone's trying to push a solution that is an on prem type solution, it's not cloud based, cloud based. It's not on handhelds. You can access it anywhere.
I would probably shy away from that for so many reasons. But yeah, I mean, I think those are the big ones. I think AI tools, predictive analytics, look into those things, use use technology as an ally, don't be afraid of it. Don't be afraid to embrace it. But again, go back and ask people, go to chat forums, go to these groups and say, who's used this?
Has anyone used this platform before? What kind of gains did you see in your business? What kind of challenges did you have? You'd be doing yourself a disservice if you don't do that.
Lori Boyer 37:35
I love that. The two biggest takeaways I got from you today that I am going to remember for a long time. Number one, we've got to use technology in order to be able to efficiently scale.
But also the human relationships are just as important. And so to be focusing on both those soft skills and the technical skills at the same time is really going to be super important. So that is awesome. We've learned so much. I want to hear, though, before we go, because we're just about out of time, a little bit about NFI, a little bit about NFI eCom.
Can you tell us, Steve, what NFI is, what services you provide?
Steve Syverson 38:15
Sure, be happy to. So NFI Industries is a 4 billion company. Privately held. About 92 years old at this point, headquartered in New Jersey. You know, we, we have about 73 million square feet in the U.S. and Canada. So I think today we're the fourth largest 3PL in the country.
Of that 4 billion, our distribution, warehousing and ecommerce is about 1.4 billion of that. So it's a significant piece of the business. We work with some of the largest retailers, global brands in the world doing warehousing, distribution, ecommerce fulfillment. And reverse logistics as well. We also have a large port services group.
We've got cross docking teams. We have brokerage teams. We do a lot of ocean freight, air freight as well. We also have an in house real estate group, so you think about 73 million square feet. Someone has to manage that. Someone has to constantly look for new cases. And I should say, you know, as as a brand part, if you look to partner with someone, look for someone who has a footprint, somebody that can scale your business.
I like to say all the time that it would be impossible to outgrow NFI for any brand. We go from 3 million to 500 million. That customer journey would be with NFI without without hesitation within our network.
Lori Boyer 39:36
I love that infrastructure. That's, having that infrastructure in place is huge.
Steve Syverson 39:40
Yeah. NFI eCommerce, you know, we focus solely with NFI has large global brands that we do that for, but NFI eCom and my team focuses solely on the SMB mid market space. My entire team has worked in this space for 10 plus years. We know our customers very well. We know this customer segment very well.
We're extremely proactive. In the brands we work with. We'd love to help them scale. We'd love to be consultative. Such a fun part of this job. And provide solutions. It makes sense for them, you know, being privately held, we make decisions on what's best for our customers, not shareholders or bankers.
So it makes a huge difference. And we are, we're a very hands on company. Our leadership team, incredibly involved. You can ask any of my customers today. They've talked with our CEO, CFO before many times so we we love our customers. But yeah, great great company. Love to help anybody out that might need an option for fulfillment.
Lori Boyer 40:39
Awesome. Thank you so much. So Steve, if they do want to reach out, if they're interested in connecting with you, maybe just getting insights, you know, following you, if you're on LinkedIn or something, or, you know, if they want to learn more about NFI, how can they, how can they connect with you?
Steve Syverson 40:56
Sure. You know, you can find me.
It's steve.syverson@nfiindustries.com. This is my email, LinkedIn, just search my name, Steve Cyberon under NFI. I do a lot of work on LinkedIn. Or check out our website, nfiecom.com.
Lori Boyer 41:12
That sounds perfect. Well, thank you so much for being here. We've learned so much and it's been a, just a fantastic time.
I appreciate you being here.
Steve Syverson 41:20
Thank you, Lori. Appreciate it. Thanks for having me.
Lori Boyer 41:23
See you everyone.