Rick Nelson’s 9-year-old Tampa-based company, The Fulfillment Lab, operates as a local competitor to companies such as Amazon by handling the personalized shipping of products sold online, both nationally and internationally.
Say a retailer is trying to get a blanket to a customer who purchased it through their website. The retailer can use The Fulfillment Lab’s cloud-based software to check the blanket manufacturer’s inventory, which is stored in The Fulfillment Lab’s dozen or so warehouses in the U.S. and overseas. From the warehouse, a third-party carrier such as UPS, FedEx or DHL delivers the product to the customer.
Nelson’s company has about 150 employees and more than 500 clients in the U.S. and around the world in retail sectors from clothing to electronics.
Being so tied to e-commerce helped the company thrive during the coronavirus pandemic. And Nelson, 45, expects the company’s revenue to triple in the next 18 months.
Born and raised in Tampa, Nelson spoke with the Tampa Bay Times about how he built his business. The interview has been edited for clarity and length.
How does one enter the fulfillment industry?
I realized that there was a major gap in the technology being used for fulfillment. Retailers were saying, for example, they had questions about how much product they had in their warehouses. So I have 1,000. But what does that mean to me? If I’m selling 2,000 a day, that means in 12 hours, I’m in big trouble. Or if I have 1,000, but I’m selling one a day, I have three years of inventory.
That seems very simple. But the thing is, no one was implementing that. So we took velocity, which is the number of products going out per day, tied to what a manufacturer’s lead time would be (for creating the product), and then we would calculate when retailers would need to reorder.
I had these ideas of where the big gaps were. And so I went to some manufacturers, and I said, “Do you work with fulfillment companies? How do you tie to them?” We don’t, (the manufacturers said).
So I said, what if I could have a platform that can give you insight into your retailers’ inventory and volume and velocity. That would help you better forecast and be prepared for reorders.
This is the biggest problem, where they always need it today, but they knew they needed it two weeks ago, but nobody told them.
So I started to work with manufacturers, who then said, we need to get our retail clients using you because this is going to make everyone’s life easier.
How did you build up your company to where it stands today?
Obviously, it’s always hard work. At the end of the day, it’s really surrounding yourself with good people, and to do that, everything needs to be scalable and repeatable.
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I have to have a mindset that I believe in passionately and then my mindset has to be sound, at least to the people who want to work for you. And you have to empower them, and they have to believe in where you’re going.
With that, you’re able to have sales teams, you’re able to go to trade shows, you’re able to meet face-to-face and set your company’s identity and stay true to your own integrity. We maintained our values and how we were going to communicate to customers when prospecting, onboarding them and then when their plans are ready.
What sets your business apart from competitors, especially those such as Amazon?
I really didn’t build my differentiator by looking at what Amazon did and then coming up with a concept. The concept itself, that I believed in, put us in a very competitive situation against them.
Amazon and a lot of the big companies, everything that they’re focused on is automation. ... The more you automate, the more you have to say no to my clients’ way and make them say yes to your way.
You have so many different business entities that have so much success, that have different beliefs on how fulfillment impacts their business. For example, from the types of boxes, colors of boxes, the printing on boxes, inserts, delivery times, how they want to deliver, to how they want to warehouse, how they want to be billed.
There’s all these different ways that make a lot of sense. Why am I going to make a business want to do business with me and do it the one way that I think is best?
All of that comes to the software from the beginning. When we built it, we built around a methodology that allowed each of our clients to have their own rules built into it.
Amazon is taking a lot of entrepreneurs, and making the playing field very unlevel, because as soon as there is a product that is getting traction, then all the big players see the trends on that. And then they can come over the top with economies of scale and take away the little guy.
We want to stay away from that. ... And that way, we’re going to be a part of the movement of creativity and innovation, and let the guy who has not had the success before grow into that success.
How has the coronavirus pandemic impacted your business?
It’s obviously way more costly to (operate) facilities, because you really had to space everything out. It took a lot more room and a lot more time at our warehouses.
But we were fortunate, because we were so tied to e-commerce, and the e-commerce segment eventually began to increase. We’ve been fortunate to be able to maintain our volume and actually grow our workforce during this time (by more than 10 percent).
Everything is software-based, so we were able to have a lot of our staff work remotely. It was a lot easier than I thought it was going to be to pivot.