Matt Edmundson: Welcome to the eCommerce podcast with
me, your host, Matt Edmundson.
Uh, this is a show a podcast, uh, all about helping you
to deliver eCommerce wow.
And we have a very special guest today to help us do just that.
Uh, Harry Drajpuch from Amware Fulfillment.
We're gonna be chatting about how to build a fulfillment
infrastructure that will scale
your business.
But before we jump into that, let me suggest a few other e-commerce
podcast episodes to listen to that.
I also think you're gonna enjoy, uh, check out my conversation with Justin
Smith about the perfect warehouse and how it could save you time and money
and make your life easier, which let's face it, sounds like a brilliant thing.
Right?
Uh, and also check out my conversation with Matt Barnett
about personalizing the customer journey to increase lifetime value.
You can find both these episodes along with our entire back catalog, uh, for free
on our website, eCommerce podcast.net.
Head over there.
It's easy.
It's easy to find.
You just need a web browser.
That's it.
Now this episode is brought to you by the eCommerce cohort, which helps
deliver eCommerce wow to your customers.
Have you ever found it hard to keep up with the world of eCommerce where it
changes so fast and figuring it all out can actually be a bit of a nightmare?
And that's before you even look at your.
Online business and try and figure out what you should work on.
How many of you know what I'm talking about?
Can I get an amen?
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it's a lightweight membership group with guided monthly sprints that
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know what to work on and also get the support you need to get it done.
So whether you are just starting out an e-commerce or whether like me, you've
been around a little while, I'd like to call myself a well-established e-commerce.
Which is translated for dinosaur.
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I encourage you to check it out.
Honestly, if you have been in, if you have been, if you are in eCommerce,
wherever you are on your eCommerce journey, seriously check it out.
It's gonna be great for you.
Uh, eCommercecohort.com is the website, or you can email me
directly matt@eCommercepodcast.net with any, any questions that you.
Uh, we'll do our level best to answer them because honestly,
this thing is sh amazing.
Yes, it is.
Check it out.
Anyway, all of that said, without further ado, here's my conversation
with the fantabulous Harry.
Well, I am here with Harry Drajpuch.
He is the CEO of Amware Fulfillment.
And guess what?
Right?
He's had 30 years experience in the logistics industry.
Uh, he's been an executive, uh, in the whole thing.
He has got so much experience, uh, in, in logistics, in executive management.
People, parcels, the whole deal.
We're gonna get into that, into this week's episode.
In his previous role, uh, as the CEO of Amway Logistics, he was responsible for
technology and the performance of eight nationwide fulfillment centers in the us.
And prior to that, uh, he was the president and CEO of Web Logistics
where he had 3PL responsibility for 15 distribution centers, uh, and
a large regional truckload fleet.
Translate that into modern English.
That sounds like a massive headache, but we are gonna, we're gonna
talk to Harry about all of this.
He's served as a CEO, third party logistics provider Kane Is Able,
which I think is one of the coolest company names I've come across for
a while, and when he's not shaking things up in the boardroom, Harry
will be likely off flying his plane.
He is an instrument rated pilot too.
Uh, which, uh, Harry, uh, welcome to this show.
I'm excited to be talking to someone who's actually got their pilots license,
principally because last night I spent about an hour and a half looking at what
it was gonna take for me to get my pri uh, private pilots license here in the uk.
But maybe we'll get onto that.
Maybe we won't, but welcome to the show's.
Great to have you.
Harry Drajpuch: Looking forward to it.
Matt.
Really excited about talking about my favorite subject logistics.
Matt Edmundson: How did you, um, I can't imagine right, that as a, where,
whereabouts in the states did you
grow up?
Harry Drajpuch: Uh, in a northeast, upstate New York.
Matt Edmundson: So you, you definitely sound like you've got that kind
of New York kind of accent going on there, which is just beautiful.
But I can't imagine that as a kid growing up in the streets of New York,
you, you sat there in school dreaming one day of running logistics companies.
Uh, I just, I dunno, maybe I'm wrong.
Maybe I've misread the situation.
So how did you get into that whole thing?
Harry Drajpuch: So that's, uh, it's an interesting way that I, I.
Uh, wound up in logistics.
Uh, interestingly enough, after I graduated college, uh, with a
marketing degree, uh, the last thing I wanted to do was sell.
But unfortunately those were the only type of jobs available was selling.
And I actually went to work, uh, um, for a, a business forms company and I just
happened to call on a trucking terminal.
Uh, it was a cold call.
I walked in and he said, You know, we don't buy our forums here locally.
But would you be interested in a career in trucking?
And I said, I don't know the first thing about trucking.
And, uh, we just got to talk for an hour.
And, uh, it just sounded like a very, very interesting, um, field.
Uh, certainly more interesting than business forms.
And that's really how it started from, from that point, I spent
10 years in local transportation.
And then I was actually recruited by a, by a company if I was interested now,
uh, and not in the rolling stock, but would I be interested in the, in the
four wall environment of warehousing.
And, uh, so I made the transition.
Uh, it's been 30 years in the, I'll say in the warehousing logistics business.
And it's really changed over the 30 years from, uh, you know, industrial
B2B to really the, the, the explosion of eCommerce and direct to consumer.
Matt Edmundson: Hmm.
Yeah, I bet it's changed a lot and I'm keen to pick your
brains on that whole thing.
Uh, so you got into logistics just because of a chance conversation with a guy.
You said you friends to getting in trucking a few years ago.
Harry Drajpuch: It, it was just, it was really that simple.
The, the, the enticing thing about that was I was offer a
company car and an expensive.
And he said, You're gonna spend half of your time entertaining people,
lunch, dinner, weekends, your home.
You need to become very, very close to these people who make decisions
about which trucking company to use.
So that kind of intrigued me and it was, you know, you could take people out,
you can take them to places you like.
You can take them out to places they like.
As a young man, that was, uh, you know, really exciting.
So I said, Yeah, let's have a go at it.
Matt Edmundson: That's interesting because it's one of the things that you
don't do these days in eCommerce or in digital businesses is you don't do that.
You don't take people out for lunch.
You, you know, you try and grab 10 minutes on a Zoom call somewhere if
you can Do, you know what I mean, you.
We seem to have, I don't know if we've lost that ability to, to
interact with people per se, but it maybe it's not as needed as much now.
I don't know.
I I, Is this a lost skill, do you think?
Or, or, or am I misreading it?
Harry Drajpuch: No, I, I don't think you're misreading it.
I think back then that was a segue to getting to know people
and getting them to trust you.
Um, You know, the back then the industry was very, very heavily
regulated and so choices were, uh, weren't as wide as they were today.
Uh, it was kind of like the airline business, right?
You, you get a seat, you go from A to B.
It almost doesn't matter what airline it is, they serve a little different food,
but you know, the planes are all the same.
Uh, the business was back then, so why, why, why, why go with Harry's company?
You know?
And, and so you tried to build up this relationship with a
trusted, you personally as opposed to trusting the company.
Today it's very, very different, right?
You're, you're, you're giving in, in the eCommerce world.
You're giving your product, your lifeline, um, your, your, your revenue
source, uh, to someone, to a company.
Uh, and it's great that you like Harry, but is the company competent?
Can the company, you know, maneuver and are they flexible enough and agile
enough to change with the volatility of what's going on out there?
So today you have to lead, uh, with a skillset and with
a reputation and a service.
And after that you get to know your customers.
You, you know, you get to know them on a personal level so that they feel
if there's a need, they've got someone that they can rely on, uh, other
than just an automated, uh, response when they call a number for help.
Matt Edmundson: That's fascinating.
It's interesting isn't cuz you are.
Right?
I mean, now if I.
If I, like yesterday I was looking up the details of a company, um, deciding
whether or not to do business with them.
First thing I did was go to Trustpilot, which is a review platform, and I wanted
to see what reviews other people had left.
Uh, and being Trustpilot, I had maybe 50% confidence that the
reviews were genuine and real.
So I did a bit more digging, um, around that company, but I did it
all from the comfort of my own home.
Or with my laptop.
And within 10 minutes I, I'd Googled and figured, you know,
found about that company to go, You know what, I'm not interested.
I'm out.
Right.
I just, this is, there's just no way.
Um, there was no lunch, there was no wh in, there was no dining,
there was nothing like that.
Um, it was just all done from a review set.
So it's, I'm intrigued to know, um, Harry, how.
How you see leadership in some respects going from what I would call old school,
you know, the, the let's go out to dinner, you know, meet the family to, Oh
look, you've got a bad review on Google.
I'm, I'm not interested.
Harry Drajpuch: Um, it's really, uh, it's really about competence.
Uh, it's really about energy for leadership.
As I said, it's a, it's a volatile industry.
Um, it's not manufacturing.
You can't say, Tomorrow I'm gonna put out 500 orders or 5,000 orders.
It's, you know, what excites people on the web to buy from my customers.
That drives volume.
So, so people have to be, um, extremely sharp, knowledgeable.
Understand the business.
Um, but, but more certainly, uh, a positive attitude because customers
are navigating out there, uh, and they're competing, you know, uh,
uh, for the, for the sales dollar.
They've gotta make themselves a little bit unique.
Um, and so the, the, the demands of the business change from day to day,
and you have to, you, the expectation is that you could adapt to it and you
could be the nicest guy in the world.
You could be the best dinner conversation.
Everybody wants to hear about flying, but can you get my product to my
customer and the way they want it, when they want it, and how they want it.
Whenever they want it.
That that's, that's the key thing today.
And if you could do those things, then it again, from a leadership perspective,
you've gotta have people who always think before they speak and try to
figure out, how do I make this happen?
Customers ask you for a specific reason, and when they ask you with something
they really need, they're not trying to inconvenience me or my company.
They're not trying to make it difficult.
They're trying to make a buck, they're trying to sell, they're trying to compete.
Mm-hmm.
, they're trying to understand the market and what they can do to
stay ahead of their competitors, uh, you know, for that dollar.
So, That's the kind of leadership that you have to have.
It's always thinking, uh, again, it's so very positive, uh, is
important because you're solving problems every day in the business.
Yeah,
Matt Edmundson: it's, See the, the, the thing about what you've just said is
actually the principles of leadership have stayed in effect the same, what
you've talked about today is not different to what you needed 20, 30 years ago.
It's just a different environment in which they operate now.
Right.
And understanding the environment.
So, um, let me just touch on the airplane thing, uh, because I came
when I was doing a, you know, that really unhealthy stalking thing
and I was just going through your LinkedIn profile, um, I saw on there.
That you spent a little bit of time mentoring teens in
developing an interest in aviation.
This is going back a few years, and so obviously you've been doing the
flying thing for a, for a fair while and you've, you've been involved in,
in these sort of organizations that, that mentor teens, uh, in, in aviation.
Why, how come you trucking and flying?
Right?
I mean, they're linked, I suppose.
Is that how you got into the aviation thing or was it just one day just decided,
you know what, I'm, I'm gonna go fly plane, watch Top gun and that's it.
I'm off, which was my problem.
. Harry Drajpuch: Um, I, I, I got into aviation, uh, almost the
same way I've got into logistics.
I, I, I actually had a fear of flying.
I didn't get on an airplane until I was 28 years.
Oh wow.
And, um, you know, if you're going to, if you want to advance in the business world,
you can't take the train everywhere.
You can't take a bus, You can't take a car.
At some point you've gotta get on an airplane.
And my first experience on an airplane was white knuckle.
Literally, I think I ripped out the arms.
I was just gripping them so tight.
The flight was an hour and a half, was a short flight from Newark,
New Jersey to Rochester, New York.
I'll never forget it.
Um, and when I got off, my knees were, I just didn't like flying.
I didn't know what kept airplanes in the air.
Uh, and so, um, I decided to start to read up on it, Uh, learn about
avionics aviation, what keeps planes flying, you know, what technology
improvements have happened.
And I used to drive by a glider port a, uh, once a week and, uh,
for, for, for a birthday present.
Uh, I, I, I got myself a demonstration flight in a glider, right?
Motorless.
And, uh, part of that demonstration was, uh, the, the fella in the
backseat, the instructor lets you take the stick and, you know, you
can maneuver the plane a little bit.
Was like, Really?
You, you're gonna, you're gonna let me do that?
He goes, No, or you won't hurt anything.
So I grabbed that stick.
I don't think I've ever held anything as tightly in my entire life and I
made little movements on it and, and I was so excited, uh, when he took
it back that I didn't harm anything.
That when I get that, when I got down, when we landed, I walk right
up to the office and bought, uh, 20 lessons, uh, to start that.
Oh wow.
That's how I got into Aviation.
Matt Edmundson: And I that, but you did it intentionally to
overcome your fear of flying.
So were you still afraid of flying when you got into that
glider for the first time?
Harry Drajpuch: Oh, absolutely.
I mean, uh, and not as much.
I mean, I, you know, I, I wasn't white knuckled, you know,
there's still some trepidation.
Um, you know, there's the newness of everything and it's not what
you know, it's what you don't know.
Uh, and you know, you think about everything that's ahead of you, that you
have to learn to be safe and proficient.
Um, but over, over the first few lessons I became, uh, comfortable.
And you get to a point where it almost becomes second nature to fly in, that
you don't think about the adverse, uh, uh, potential, something happening.
You're, you're always thinking about, uh, ways to just be safe.
And if this happens and that happens, here's what you do.
Flying is a very, very interesting thing.
It's, um, it's always preparing.
For an event.
Uh, what if this happened?
What if you, what if you ran out of fuel?
Uh, what if circumstances changed?
What if weather changed?
What if you had to land the meat?
You're always thinking about that.
Uh, when you're flying.
And when you, when you, when you transition from that,
business is no different.
Um, everybody can do things when things go well, when you're not
throwing a curve ball, so to speak, when everything goes according to
Hoyle, when everything happens, as it should happens, life is good.
Unfortunately, that's not the case.
Things occur every day in the business.
Um, from simple things like printers start now functioning and, you
know, you lose your system, you lose electricity in the building.
There's, uh, people don't show up for work for some reason.
There's a, a high degree of call out, There's a sickness, there's a snowstorm.
Um, customers expect things to get done.
Regardless of what happens, they expect us to have a plan B and a plan C, so
that we can always make sure that their customers are not not dissatisfied, and
that's not an unreasonable expectation.
That is in part why they come to us and ask us to handle their business.
Matt Edmundson: That's a really interesting point.
Always preparing for the unknown.
And so I guess you learn that from flying that I think Harry, uh, is
gonna be a great excuse that I can use to say to my wife, Listen, this is
the reason why I should learn a fly.
It's gonna make me a better businessman.
Harry Drajpuch: it, it will make your weekends, um, much more interesting
because of, instead of, instead of a three hour drive to go enjoy something, you
can now take a three hour flight and in a three hour flight you can cover 600 miles.
Versus in a three hour driveway, you're covering 180 miles or 120
kilometers, whatever the case may.
Matt Edmundson: Yeah.
Yeah.
And that's very true.
And so is that what you do?
Is that how you spend your weekends?
You just fly different parts of the country and just hang
out?
Harry Drajpuch: Uh, used to, used to do much, much more flying than I do today.
Business, Uh, with business the way it is today and, and, uh, and the organization
growing the way it is, it takes a little bit more time to focus on that.
But yes, uh, we'll, we'll look for weekend getaways, uh, that are a
three hour flight and, uh, leave on a Friday night or on a Saturday morning
and come home on a Sunday night.
And I get to see some wonderful things as a result of that.
Matt Edmundson: Oh, that's fantastic.
That sounds fantastic.
So Harry, you've been, um, You've been around for 30 odd years in
the fulfillment industry, right?
You've, that's a lot of trucks, that's a lot of miles that you've
sort of been involved with.
Um, that's a lot of parcels shipped, Shipped all over the place.
What are some of the key things that have changed?
I mean, you alluded to, you know, it used to be more business to business.
Now eCommerce has sort of sort of exploded, but, but what are some
of the key things that you've seen change over those 30 years?
Harry Drajpuch: Oh,
much has changed in the business.
Um, we're, we're, uh, direct to consumer was almost minuscule 30 years ago.
Uh, almost part of, uh, today it's the.
So shipments that used to go into large distribution centers or large
retailers, and they would handle the final, you know, sale to the customer.
Uh, you know, now it's, it's, it's us shipping directly to you.
And that experience is now when you open the, the, the package from us, I
think what's changed, uh, over time is people's expectations used to be okay
when you ordered something online.
If it took a week or eight days, that was kind of okay.
You know, that was kind of the norm, right?
And then Amazon opened up and then said, Hey, we can get
your shipment to you next day.
And all of a sudden, Hey Harry, uh, can you do next day?
I mean, we wanna, we wanna get our product out the door when, you know, we give
you an order today, want you to fill it today so our customer gets it next day.
So expectations have changed from speed.
Um, from quality of service, uh, the ability to do different things,
Um, you know, not just pick a unit, but to, uh, to customize it, if
you will, to make changes to it.
To package differently, uh, to do nice packaging, to add a special
card with a personalization.
Um, you know, 30 years ago that was unheard of.
You want us to what?
No, we don't do that.
We're not gonna write anybody card.
Come on.
We don't do.
And today the expectation is to be as flexible and to figure out
whatever it is we're asking you to do.
Help us do that because that's something that differentiates us in the marketplace.
That's a really, uh, I, I like the word you use there.
Flexible.
Because I think that's what everybody wants, isn't it?
These days we just want you to be, we want you to do it a
little bit differently for us.
Cause we don't wanna be the same as everybody else.
Because seeing, being seen to be the same as everybody else, being
vanilla, being bland and boring, you don't tend to differentiate yourself.
Um, and so being flexible I think is, is important.
It's an in how you contrast that to 30 years ago, it's like, no,
we're not gonna write a card.
Don't, don't, don't be crazy, but.
Sure.
Do you want us to spray perfume on the card as well?
We can put like a, a lipstick imprint on there.
What, what do you want?
Tell us what you want and we can be a bit more flexible.
Um, how easy.
Has it been for you guys to make that transition?
The reason I'm asking this is because, actually for me, this is one of the,
the, the things I think a lot of eCommerce business was businesses
struggle themselves with is being that flexible and adapting to changing
consumer demand relatively quickly.
Actually, like you say, a few years ago you were fine with an eight
day delivery, now you want it next.
But actually I want it next day with the card, with the perfume, with
the lipstick, with the chocolate.
And, and I, as an eCommerce entrepreneur, I have to keep up with that.
So how have you dealt with that sort of rapid consumer, uh, change in demand?
So, um, several things.
Um, it, it starts, it starts with people.
Um, you have to make sure that the, the people in your organization and
those that you hire, Uh, you know, have the right, uh, have the right
attitude about willing to serve.
About willing to please about wanting to do a very, very good
job as opposed to just do a job.
I come in, I'm here for eight hours, you know, why do I have to do this?
Why do they have to have that?
Why do they have to make it difficult?
I gotta get all these orders out.
Why do I have to do that?
Um, if you start with a, a base from that, you're pushing a rock uphill.
But if you can, uh, if you can be selective in your hiring, look for people
that have that, that wanna do something a little bit differently, that see it as
a challenge, that wanna grow, that wanna expand the things they do because it makes
it interesting over the course of a day.
Um, and then internally from your own leadership team, and as I had mentioned
earlier, positive energy is really, really critical because there's, there's all
sorts of pressures on the business today.
Um, to be quick, to be perfect.
Social media keeps my customers up at night, right?
Just like you do.
Everybody gets online, not just to find out, should I try this company?
But once you, once you try it, you write the review, Hey, ordered something from
ABC company, Got the totally wrong thing.
It was packaged miserably.
I ordered three, I got two.
Now I've gotta return it.
What a hassle.
And that keeps my, that keeps my customers up at night.
So, So the ability to, to have people, um, Employees put
themselves in the end user shoes.
Would you wanna open up a package that wasn't done right, that it appears
somebody didn't care, just pushed in there, shoved in, not, not, not
taken care of, uh, packaged wrong.
You've waited for this thing, you've placed the order, and now
it comes and you're disappointed.
Now you have to wait for it again.
If you can't change the mindset from internal, this is the job
I have to do and get it done.
Uh, you know, here's when I come in in the morning, here's my inbox
when I go out, it's like this.
I had a good day.
As opposed to did I take the care?
Did I do it right?
Did I, did I think about the person who's gonna open this up and enjoy it?
And I'm a part of that, so, so, Finding people who wanna do that, and then
having an atmosphere that walks the talk, that supports that, you know,
that is invested with them and make sure that they, they understand what it
is we're doing and they have care and passion and, and it shows in your work.
That's, Yes.
Matt Edmundson: You know what?
If you're listening to the podcast, just rewind that section A and write that down
because that's, uh, that, that's gold.
Uh, and, um, listen, we're gonna carry on this conversation.
There's a couple of things that Harry's just said that I really
want to dig into, uh, specifically.
I want to get into this whole opening experience, um, and some of the
things that we should think about when sending parcels out to customers.
Uh, don't go anywhere.
We'll be right back in just a few short moments after this quick sponsor
break.
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Okay, I'm back with Harry.
Uh, now Harry, before we uh, before you, you talked about, um, one of
the keys, uh, to keeping up with the changing consumer demand.
Um, the phrase you used was to put yourself, uh, in your
consumer, in your customer's shoes.
Right?
Would you wanna receive a parcel?
Like this, for example.
And for me, I, one of the messages I guess I've been banging on, uh,
for about, uh, for a little while on my little soapbox, is how, how you
differentiate yourself from Amazon, right?
Amazon are always gonna get it there quicker than you, more
than likely, because it's Amazon.
But what Amazon do is they send their orders out in a very
boring box with very boring.
Internal packaging, Do, you know what I mean?
And it's like nothing about it is interesting.
Nothing about it is inspiring.
And so you, There's a real opportunity I think that we have as e-commerce
entrepreneurs with what I call the opening experience, right?
Because this is the first time.
That your customer has touched something from you.
Everything up until this point has been pixels, right?
They've looked on a website, they've got email notifications.
It's all been pixels now.
It's actually real.
It's the first time they get to touch anything.
What have you noticed recently, I guess, about how people are packaging stuff and
sending stuff out that are maybe some of the latest trends, some of the ideas
that we should probably think about?
Harry Drajpuch: Um, well, It is all about the experience.
Um, things that, things that if you have, if you're shipping out things that have
multiple items in the box, um, could be, could be um, could be perfumes,
could be uh, skin creams, uh, lotions.
Potions.
Could be nutraceuticals.
You've got a whole seven day regimen.
I think, um, aids, uh, aids that keep everything in a box, orderly inserts,
foam, uh, that holds the product, um, so that it looks neat when it comes.
My customers are high-end, uh, uh, high-end etailers, if you will.
They're not, they're not selling a commodity.
They're selling a unique brand, a unique product.
There's probably a little bit of an upcharge or maybe a
lot of an upcharge for that.
Mm-hmm.
, they, they, they want that open box to look like someone
had taken the time, the care.
Um, we do write personal notes.
Some customers ask us to have a handwritten note.
That goes, that's addressed to Matt.
Matt, thank you for your order.
We hope you're happy.
Uh, if there's any issue at all, you know, whatever it may be, call, email.
Um, so I think, um, as, as you think about, uh, how that happens
to your customer, why, you know, you have to think about.
The smile that they get when they open it, and the fact that they're gonna
want to buy again because they're gonna want that experience again.
They're gonna, they're gonna be justified in making the, the purchase and the
potential premium for your product.
Matt Edmundson: I like that.
I like that.
Think about the smile when they open it.
That's, um, you see, one of the brands that I've, I've seen do this
super well is obviously Apple, right?
They to the point where even how they wrap their cable, It just
like, it's like a piece of art.
Do, you know what I mean and the way it arrives perfectly, sort of coiled in
the box and everything's fit and snow.
Even when you open the box, it takes five minutes for it
to, cuz it's so well fitting.
Do, you know what I mean?
Sort of suction type thing.
Is this something, um, Is this something that consumers, uh, consumers, uh,
something that e-commerce retailers should definitely be thinking about in terms
of, you know, there are brands like Apple pioneering this kind of thing, but there
are people that do sell commodities.
Yeah.
I don't know.
They may sell supplements or something like that.
Should they be thinking about their packaging and always trying to
sort of innovate and push forward?
Harry Drajpuch: For many reasons.
Yes.
Um, and I'll start with Amazon puts the smile outside the box.
We put the smile inside the box, you see, I love that.
Right.
What is the difference between, and, and there were numerous
differences, but, but, but the, but the, but the answer was, is yes.
It's, um, it's as critical to think about, um, what goes inside the
package other than the product.
Again, uh, to differentiate.
To differentiate yourself and to make that purchase, uh, worthwhile
to make it, that it justifies the premium that you're going to pay.
Um, different kind of tissue papers that we add colored, but
it's also important to vary that.
Right month, month, quarter to quarter, uh, make it a little bit different
for people so that each time they look forward to something new, when they open
up the box, it's not just the product that my customers are selling, it's
that whole experience that starts from the time they place the order until
they actually receive the package.
And that weight and that expense was all worthwhile.
Uh, you know, you noticed, uh, how, how Apple packages the product.
Many people notice how it's not packaged.
I remember getting one of my first shipments from Amazon and it was
actually, it was actually a beverage.
And they had thrown two, six packs into a container, put a little bit
of a paper in it, and that was it.
When I got it, you could shake it, you could hear it, opened it up and listen,
I, you know, okay, I got it right.
That's mass production.
Uh, it's kind of like, it's the difference between buying a Chevy and a cheap car, a
cheaper car, a base car, and really buying a BMW or Mercedes or rolls a high end.
Matt Edmundson: That's
brilliant.
I, Harry, just so you know, I am gonna steal that, but I will give you credit.
Amazon put the smile on the outside of the box.
We put the smile on the inside.
I'm gonna use that because that's genius.
And um, I think again, if you are listening to this and you
have an eCommerce business, that's such a great idea.
Just that simple principle.
If you're competing with, you know, Amazon e-Tailers and you're kind of going, Amazon
are doing this, it's like, yeah, but they put the smile on the outside box.
You have a chance to put it on the inside.
Like it that I think is very clever.
So if I'm, if I'm a growing business, I've set my eCommerce business
up and I'm, I'm sort of, I'm, I'm starting to get some success.
I'm coming to the point where I'm thinking, do I outsource my fulfillment?
Um, I've probably, to be fair, like most entrepreneurs when they start,
been doing it from my kitchen, uh, and my stocks in the garage, , Do,
you know what I mean, and I'm, I'm shipping it out from the post office.
Um, I guess there's, there comes a point, isn't there where you kind
of go, Do I outsource this or do I do I set my own warehouse up.
Um, and when we, when we started out an e-commerce, to be fair, the only
real option for us was to develop our own warehouse because it, it
wasn't, like you say, the direct to consumer wasn't a common thing.
UPS wouldn't deliver to people's houses unless you paid them an
extra 20 bucks or something crazy.
Uh, because they were used to shipping to businesses.
Uh, that, what are some of the things that I should think about at that junction?
Do, you know, what I mean?
I'm stood there now and I'm thinking about these two possibilities.
What are the, some of the things that I should think about?
Harry Drajpuch: Um, well, for sure you should think about, uh, what is it going
to cost you as your business grows, uh, to be able to do the backend, the
shipping, to be able to do that service.
Um, you know, what kind of space do you need?
Uh, do you buy it?
Do you lease it?
How big, how much for how long?
Can you manage people?
Can you hire them?
Can you onboard them?
Can you keep them?
Um, you know, do you have the infrastructure?
Do you want the infrastructure to do that?
So, you know, at the end of the day, is it bec, Is it going to be just as much focus.
On getting the product out the door as it is selling the product, then, you know,
you make that decision and, and then you weigh the pros and cons of outsourcing.
When you outsource, you generally save money.
You generally save 10 to 20% of your own internal costs.
Um, outsourced companies are a little more efficient.
They can share labor amongst different customers.
You don't keep people around not doing anything, so there's.
Work to do.
So they're more efficient.
You can economically manage volume swings, uh, when you outsource it, right?
We are geared to be able to handle differential volumes day
to day, week to week, right?
We know how to source people, we know how to effectively use them.
Um, When you outsource, you can focus on your core business.
And your core business isn't getting the product out the door.
Your core business is growing, your company selling, figuring
out different things that you have to do to stay competitive,
to grow, to be a differentiator.
And then, you know, again, when you outsource, you can scale very,
very quickly, both up and down.
Hey, I've got an idea.
I wanna have a promotion at the end of this month.
It's two weeks away.
Harry, we're gonna run a promotion.
We think we're gonna have two to three x of the sales over a four day period.
Boom, you're done.
The backend is a little better.
You've been taken care of.
Harry's gonna figure out what he's gotta do to get that four times volume through.
You can now focus on getting the, getting your message out
to people to buy the cons.
Um, potentially you may lose a little bit of control, right?
Um, you're now outsourcing it to someone.
Harry and his people, do they really care?
Like my people care?
Are they really going to focus on the product and are they going to give it
the attention that my people will have?
I can just walk in my warehouse and see what my people are doing.
You know, Harry's is not here.
Maybe it's a hundred miles away.
Maybe it's just a block away, but.
I don't, I don't have that direct access that I had before.
Um, you may lose people when you make an outsourcing decision.
Um, as a third party provider, we're more than happy, uh, to take the
people that work for you into our environment, uh, that that's great.
They already bring tribal knowledge.
They've already got ideas of how this should happen.
You've probably already pre-screened them and indoctrinated them.
We'd be more than happy to take them.
Sometimes it's not practical.
Your office may be in New York, your shipping may be in Dallas.
Your people won't have an opportunity.
So that's a decision that ge, these people have been loyal to me as I've grown my
business, I can potentially lose them.
Um, and then, you know, managing a third party provider is not the
same as managing your own warehouse.
It's a very, very different skillset.
You're not managing.
You've now given your, your business to another, another company, and
you've gotta learn how to manage that company effectively, which is
really a matter of setting up the right service level agreements.
Hey, I want 99% on time shipping.
I want you to receive product within six hours.
I want this level of inventory accuracy, you know, in, in, in a way it's a little
bit of a relief because now you can't just drive the standards that you.
And manage that, versus you're standing in the middle of a warehouse trying to
figure out how to make all that happen.
Very, very different skill set in managing through someone versus doing it yourself.
Might be a great example that you become a general contractor.
You used to kind of do all the things in your house.
You did the plumbing, you did the, the framing, you did the electrical stuff.
Now you're getting bigger.
You can't do that anymore.
Now you've gotta hire electricians.
You've gotta hire a, a framing company.
You've gotta hire a plumbing company.
And you've gotta manage them to do the work the same way you've done that.
Little bit different.
Yeah.
Matt Edmundson: No, it's all top.
Top advice.
Let's, um, if I, if I may, um, Let's talk to the guy that actually
does have a warehouse for a second.
Uh, and they are, they've got a little, you know, distribution center
for their own eCommerce business.
What are some of the things that you would advise that they think
about for their own business?
Some of the key elements they definitely need to get right in, in, in that, in
that sort of, Do it, do it yourself as the wrong phrase, you mean, But in terms
of, in their warehouse, what are some of the key things you think they should hit?
Harry Drajpuch: Uh, well, they should, they should always look at a
continuous improvement program, right?
Because mm-hmm.
, um, costs go up.
Your, your cost of doing business is always going to increase unless you're in.
Tough economic times, you could assume you're gonna have to pay your people
a little bit more, more for services.
You know, here in the States, uh, every year the, uh, the parcel
carriers go through a general rate increase of about 6%.
I mean, you, you can bank on that, like death and taxes.
It just seems to go up.
So I think what you need to be thinking about is, you know, how do you, how
can you continue to provide value?
Because you can't always pass everything through.
At times that becomes mm-hmm.
, you know, that may make you a little bit less competitive and it may
certainly erode your bottom margin.
So you wanna constantly be focusing on how can I get more productive
with the people that I have?
How can I get more efficient?
Maybe you're doing everything manually today, so you wanna
start to think about, how do I automate some of this stuff, Right?
What do I need to think?
For automation and what do I think about for processes?
So they, they need to be thinking about the future and, and how they build
their, you know, how they, how they approach the future and how they're
gonna really build their business.
So you don't wanna build the future state for five years down
the road and think you're going to be five or six times bigger.
And then, uh, things slowed down for you.
Well, we had that happen with a beverage.
A beverage, uh, we know of a beverage, uh, manufacturer or retailer mm-hmm.
that was just going through the roof and wound up building five times and then,
All of a sudden it was a little bit faddish and not really staying power.
It wasn't Coca-Cola, wasn't Pepsi-Cola and they wound up not being able to
carry all this, that they've invested.
They wound up going back bankrupt.
Um, you know, consequently, I think they should think about taking a modular
approach to their business growth.
Uh, Legos, right?
You can build a little Lego thing, but when you need to add
on, it's very simple to add on.
You need to think about your business the same way.
How can you modularize it so that you can grow in incrementally?
Uh, ideally they're gonna start to think about the levels of technology.
Simple things.
Uh, maybe they needed an enhanced WM system, not a small investment,
but what are some of the things that they can invest in?
Automatic tapers, automatic labelers.
Uh, cart directors.
Um, these are not high tech items, but these are items that can make them
more efficient and that are affordable.
Mm-hmm.
. But if they've got any kind of a serious growth plan, they really
start, need to start thinking about outsourcing to a third party provider,
uh, that can help them grow and grow with them and relieve them of that.
You know, those decisions and those investments, they're
not small and significant.
You know, you can go to a third party who's already made those investments
as a shared resource and use.
That might be the difference between buying your own jet because you think
you're gonna be flying around a lot.
And still using commercial airlines for where you wanna go.
Yeah.
Hey, I'm starting to travel now every week.
Maybe I need buy my own airplane.
We, we may laugh about that for certain people.
It may very, very well be the right thing to do, but for most people we can
agree it's not, They've gotta figure out how to fly commercial, how to buy an
advance, how to get that to, to, to work a little bit more efficiently for them.
Matt Edmundson: One of the things that I came across, um, Talking about automation
and, and, and some of the machines that you mentioned, uh, was on a blog on
your company website, the Amware blog.
It says, Until machines completely replace people, the biggest productivity and
profit killer in the B2C warehouse is an inability to hold onto warehouse workers.
Uh, which I thought was a really insightful comment.
And you, the blog goes on to say, we estimate each warehouse associate
who leaves, costs companies about eight and half thousand dollars.
Um, is this something, uh, that you've noticed?
I mean, ob obviously it's on your company blog, but I I maybe you can just
expand on that a little bit further.
Harry Drajpuch: So, the current situation here in this states, uh, is that there's
11 million open jobs and 4 million people.
Um, Right, right.
If you believe that.
So you, you, you, mm-hmm.
pe, Right?
It's a, it's a, um, it's a buyer's market.
If you wanna think about employees and associates, clearly when someone leaves,
you've gotta go through retraining.
Uh, you know, you've gotta go through a learning curve that takes time.
Their efficiency, their productivity doesn't come up to speed for three, four
months, depending upon what they're doing.
It's a morale.
People start to leave around you, you start to wonder, why am I here?
What do these people know who are coming and going?
That I don't know.
Uh, so it's very, very real.
It's something that has to be focused on.
Um, and it's something today that you have to work with your associates to
make sure you make it a good place.
You're competitive.
Um, you include them, they're part of the solution.
They're not just chattel who comes in and goes and, you
know, do what we tell you to do.
It's a very different environment you want them to feel a part of.
Uh, you want them to feel a part of the solution and that they
make a difference, which means you have to resource them properly.
You have to give them the right tools, uh, and you've gotta spend time.
And not take for granted they're going to be here.
You've actually gotta spend time, uh, investing in them and making sure you
hear them, spend time with them, know them, understand what drives them.
We use, uh, we use a tool here, uh, called Predictive Index, which makes
sure that we can match people to the right job so that they're happy doing
it, as opposed to it's a paycheck.
I need a paycheck.
Yeah, I think, um, you know, wages here in the States have gone through
the roof because of supply and demand.
Uh, because businesses are growing.
And you don't want employees leaving for 50 cents or 25 cents.
You really want them to stay because they want to be part of what you're doing.
They believe in what you're doing.
They wanna be part of it.
They feel you're putting back on them, just like opening up that box
and having that great experience.
They like walking through your door.
And not feeling like they're gonna be working on the salt mine for eight hours.
That, Hey, I'm gonna be in here.
I enjoy being here.
I've got people I enjoy working with and I'm appreciated when I'm here.
That more than anything else, uh, next to a paycheck, is what
people really, really want.
They wanna be appreciated.
They wanna pat on the back, they wanna shout out when they do a great job.
Matt Edmundson: Yeah, that's so helpful because I, I think I, I can't remember
if it was the same blog or somewhere else that I've read it, but the churn rate of
staff in warehouses is like 40% or some crazy high amount of people, um, that
just come and go and are dissatisfied.
And the high cost associated with that are worth bearing in mind.
Actually, if you're an eCommerce entrepreneur and you do need staff in.
In your warehouse.
Uh, I thought that was super, super insightful.
The other thing, um, this was on a blog, uh, I think you wrote this one,
um, Harry on multichannel merchant.com.
And this is something else that, uh, when I noticed this in our own
eCommerce businesses, it changed.
It changed how we did things significantly, if I'm honest with you.
Uh, and I just wanted to draw it out.
Um, if you currently ship 100,000 items per year with a 98.5%
accuracy, that means that 1500 customers won't get the right order.
So, for example, you could wind up paying around $43 23 cents.
I think this was based on an example per error, which equates to 65 grand
per year, uh, to correct these.
Issues on a 90.
So in, at first glance, 98.5% accuracy sounds really good.
But then when you throw the mathematics in this and go, Hang on a minute,
there's a cost here, uh, of putting something right, and you need to track
that, um, to a total of 65 grand.
This is what freaked me out.
Uh, a few years ago when we tracked, you know, we were losing like 70 grand a
year just because on picking and packing errors, uh, in the, in the warehouse.
And we thought we were doing
Harry Drajpuch: pretty good.
You were probably doing pretty good.
And to your point, it's, it's great when you tell customers,
I'm gonna give you 98.5 or 99.
They're, they're all excited about it.
That's great.
Until they do what you do.
And put pencil to paper and say, Wait a minute, what does that 1% mean?
Well, I'm gonna disappoint 500 customers a month for you.
And they Wait a minute, what do you mean?
Well, that's what 99% means.
When O'Hare airport, 99% means two takeoffs of landings are
not gonna make it every day.
That's what 99% means in the airline business.
99% in our business because we have people working.
Yes, we're going to have it.
And so we need to talk about that.
You know, what is an acceptable level for you and what are you
willing to, what do you worth it to go from 99 to 99.5 to 99.9.
And there are things that we can do, obviously.
Additional checks.
Um, but more importantly, it's really technology that you can add in because
if you think about the repetitive nature of what people do, yeah, we
have some people who can pick 200 orders an hour over a seven hour day.
They're picking 1400 orders, couple line items, you know,
they may make a mistake or two.
Right?
They're human.
You're not dealing with robots here.
So we, we've installed things like pick to.
Where they can just focus on a light that lights up and they go
into that bin and it tells them too, and they pick two from that.
Um, that, that helps improve accuracy.
Obviously the ability to scan an item improves accuracy, weight scales that
weigh shipments before they go out Auto.
That helps accuracy.
Um, we have voice pick in our warehouse that literally tells someone what they
need to pick and they need to respond back, and they also need to scan back.
So there are levels and layers of quality that you can put in,
but they are not inexpensive.
And as you talk about someone who is growing their business and wants
this level of, of accuracy, um, this is what they're looking at
and this is what they have to do.
Now, this is why in, in the airline industry, it's why we use checklists.
No matter how many years you've been flying, every pilot that works for
an airline, every day for everything has a checklist to run through.
And you need to be thankful for that because it's easy to forget that because
you have multiple flights in a day.
And there have been issues in the airline industry previously where
they've run through a checklist that didn't do it diligently, and
it wound up not with a good outcome.
Matt Edmundson: No, that's very good, Harry.
My, uh, I'm, I'm aware of time here and so, um, I, I, I just, I wanted to touch
on one, my final question, uh, quickly.
Um, and I, this, I should have maybe asked this at the start, cause I think
it's quite an important question.
One of the things that I've noticed, Um, with our customers and with even
me in my own demand, uh, in, in buying online is I am becoming more and more
aware of the sustainability issues with e-commerce, uh, especially around shipping
and shipping, uh, in an, in a, in a way that is not environmentally sustainable.
I think it's becoming a.
Bigger and bigger global problem.
Um, what are some of the things that you see there in, in your industry
that are improving sustainability?
Um,
Harry Drajpuch: packaging.
Start with packaging, right?
Uh, make sure that packaging first and foremost is the right size.
So there's not waste that's associated with it for a lot of reasons.
Not just sustainability, but cost.
Uh, if you're shipping in oversized boxes, you're going to pay a dimensional,
uh, penalty, uh, with parcel carriers.
But you're also gonna put more stuff potentially in a landfill if you do that.
So making sure that packaging is right, really, um, going away from plastic.
To more paper products always help.
So, uh, using using paper, uh, as a, as a, uh, as a gunnage inside the package
versus plastic, airbags, peanuts, uh, those things don't necessarily
dissolve well in a, in a landfill.
But paper does paper's recyclable, cardboard is recyclable.
So, uh, we're trying to use not just materials that can be recycled, but
we're trying to use materials that have been recycled so that we're
not just starting, you know, we're not always using something new.
We're outsourcing, uh, corrugated, that's been recycled paper that's been recycled.
And so from a sustainability perspective, uh, we can do that and we
can do that while we lower costs as.
Matt Edmundson: No, that's super important.
One of the things that, um, if you're a regular listen to the show, you
will have heard me mention this before, but one of the things that we.
Uh, in our eCommerce business was we, we substituted, I can't say that word.
We substituted, you know, the plastic bubbles, um, that you, that people use.
Uh, we substituted them for popcorn, uh, because we found popcorn was a
lightweight material was biodegradable.
It was a little bit fun.
It was quirky, so customers talked about it.
Obviously didn't have caramel or butter on it.
It was just plain popcorn.
Um, and it was just great for us, you know, And customers absolutely loved it.
And they were posting pictures of it all over social media.
Um, and it meant the warehouse smell of popcorn.
And if you ever needed a low calorie snake, you just went
to the warehouse and got some
It was a great packaging material.
Really, really good.
Uh, Harry, thank you so much for your time.
Thank you for being with us.
Been an absolute treat.
I can't believe how quickly the time's gone, if I'm honest with you.
Uh, how do people reach you?
How do they connect with you?
If they want, If they want to, if they wanna do that.
Harry Drajpuch: Well, Matt, it's been a pleasure as well.
Thank you for having me.
If people need to reach me, best way is email.
It would be Harry dot drajpuch.
D R A J P U C H @Amwaylogistics.com or just take that mouthful name
and look me up on LinkedIn.
You can message me that way as well.
Matt Edmundson: Yeah, I did have to clarify how I pronounced your
surname at the start, didn't I?
Its great.
And we will of course link to Harry, both his email and his
LinkedIn profile in the show notes.
You can get those four free on the website eCommerce podcast.net.
Um, but Harry, uh, for me, I genuinely really appreciate it.
Thank you so much for being with us and, uh, for sharing a lot of value.
Harry Drajpuch: Matt, Thank you for having me.
It's been a pleasure.
Hope we do it again.
Matt Edmundson: So there you have it.
What a fantastic conversation.
Huge.
Thanks again to Harry for joining me today.
Love that conversation.
What a legend, what a lot of experience that chap has.
Uh, also, let me give a big shout out to today's show.
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And in case yes, in case no one has told you yet today, let me
be the first person to do it.
You my friend, are awesome, utterly awesome, and it's a
burden we all have to bear.
Granted, some of us wear it better than others.
But it is what it is.
Uh, the eCommerce podcast is produced by Aurion Media.
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So that's it from me.
Thank you so much for joining me.
Have a fantastic week.
I will see you next time by for now.