Outsourcing Logistics: Saving Time and Money with Caleb Webster

Brent Peterson (00:04.22)
Well, welcome to this episode of Talk Commerce. Today I have Caleb Webster. He is the founder of Webster Fulfillment. Caleb, go ahead, tell us your day-to-day role, maybe one of your passions in life.

Caleb Webster (00:14.602)
Yeah, absolutely, Brent. Thanks so much for taking the time to talk to me today and having me on. So yeah, founder and CEO, operating member of Webster Fulfillment. So we are your traditional 3PL. Maybe we were a little bit different than a lot of other 3PLs. We were actually founded from some internal brands that we still fulfill for today, specifically in the apparel niche. So...

We were fulfilling for a couple of internal brands that are focused, their business models focused predominantly around apparel. We saw the need after three or four years of fulfilling our own brands. Apparel is typically not your easiest line item per se to fulfill for. We thought we were pretty good at it. We thought we had a lot of the process design figured out and some of the issues and kinks worked through.

And then we started actually getting approached about some external brands that were interested in having us do some fulfillment for them in the apparel space. And so after a year or so of toying with it, we decided to take our services to market. We took them to market specifically as apparel fulfillment company, specifically Flat Plack Apparel originally, but we have since kind of ventured out of that. I think that'll always be our niche.

and what we think we're the best at. But we've ventured out of that now. We do everything from apparel to electronics, some medical companies, and various other product lines mixed in there. We're currently two facilities, just over 300,000 square feet and growing. But we really, our claim to fame has always been like understanding what handing off your brand, handing off your baby is like.

That's what we built the 3PO on. That's what we try to remain true to today and be true to customer service. You know, when you call somebody here, you're getting somebody on the phone that's on-site and can fix your problem. So that's a little bit about Webster Fulfillment and what we do as far as passions or day-to-day passions are concerned. It's all about building the brand and building Webster Fulfillment. So all things, I would say all things outside of my two little boys, all things logistics.

Brent Peterson (02:34.976)
Right. Okay, awesome. Caleb, before we get started on our content, you have graciously volunteered to be part of the Free Joke Project. And all I'm going to do is tell you a joke and all you have to do is say, should this joke be free or do you think we should charge for it?

Caleb Webster (02:52.399)
Yeah, absolutely. I don't know what I've signed up here for but let's do it. Let's jump off the cliff.

Brent Peterson (02:56.928)
Alright, it's gonna be super easy. Here we go. Not all math jokes are terrible. Only some.

Caleb Webster (03:04.73)
I definitely think that gets the paywall at some point for sure.

Brent Peterson (03:08.56)
Good. All right. Well, I like that reaction. All right. Let's talk about 3PL. You know, just I think most people know what a 3PL is, but tell us like the reasoning behind it and some of the strong points and not running your own warehouse.

Caleb Webster (03:25.482)
Yeah, for sure. I think it's pretty simplistic, and I've told this story numerous times. One of the partners in the fulfillment center business actually had a brand of his own, and he tells a story all the time about going up for a year-end review with a growing brand, a brand that was really just off to the races and growing well. He tells a story about going up to do the year-end review with the CEO.

the guy that was running the business, and he goes in to find him, and he's in the back of the warehouse looking for a missing item, right? And that's really what we have founded our whole story off of is, you know, regardless of when you're running a brand, regardless of if you think you're doing it or not, when you have operations in-house, it's a gravity pull. It's, there are day-to-day fires.

that are pulling you away from growing the business, scaling the business, whatever your sales goals are. They're just daily gravity pulls that are happening every day, whether you know it or not. And we recognize that with our own brands and we realized that when we got them paired together, we could use economy of scales and we could use other things to handle those gravity pulls of the different operations related items so that those brands could really go focus on their core competencies.

It's always hard. It's your baby, right? You started your brand. You procured your brand, whatever your case might be. It's hard to hand that baby off. And so we understand what that's like. We took our brands from being internally managed to all together being managed outsourced. And so yeah, I mean, I think the biggest benefit is just being able to allow the brand bandwidth to focus on whatever the whatever the metrics or the goals or their KPIs are.

to be able to focus on that and not focus on getting orders out, right? Like to be able to really zero in and focus on those core competencies.

Brent Peterson (05:22.845)
You mentioned earlier that you've kind of you started by focusing on fashion. What are the challenges that people come to you in the fashion business specifically that you help solve?

Caleb Webster (05:35.262)
Yeah, of course, you know, this always varies brand to brand, but typically what you see in apparel fulfillment is a high SKU count. And if you know anything about fulfillment, the more SKUs you have, the more difficult, the more difficult the fulfillment process is, typically somewhat requires more space, gotta have a larger pick path, et cetera. And so we introduced automation about four years ago into our processes or specifically into our automation fulfillment process.

And it's allowed us to be able to combat some of that challenge that you typically see with apparel fulfillment. So, you know, it's a very labor-intensive line, a product line to fulfill for. And so we have been able to leverage scale and overcome some of those challenges. So I would say that's the main challenge when it comes to apparel fulfillment, for sure.

Brent Peterson (06:25.08)
And have you seen a difference now moving into other verticals like you mentioned electronics? Has it been a challenge for you then to add those in or is it just kind of goes in as they go?

Caleb Webster (06:37.49)
Yeah, no, we joke about this all the time, but if you can fulfill apparel, you can fulfill anything. And so, yeah, I, truthfully, the other lines that we have ventured into, and we're about half and half now, the other lines that we have ventured into are, I don't want to say easy, nothing in the world of fulfillment is, could be quoted as easy, but much, much easier than apparel typically.

Brent Peterson (07:04.444)
You mentioned earlier that you kind of take over some of that burden from the merchant. What recommendations do you have if somebody's starting a new store and they don't necessarily want or they have an existing store and they've gotten to the point where they really can't manage it in their store and they need a warehouse? How do you recommend they sort of approach somebody like you to start that process of getting those

getting all that inventory out of their own location into a different location and then just trusting that you're going to fulfill all those orders.

Caleb Webster (07:40.906)
Yeah, I mean, I think there's a couple of different sides to that question. I think one, there is a level of volume where it makes sense, right? It's hard. There's like a tipping point, right? And so what we have tried to do is we've tried to give access to our fulfillment services to some brands who may not typically meet that criteria. We do some micro level fulfillment, if you will, but there's certainly a level where

it makes sense for new brands. Outside of that, we just, from a feeling comfortable standpoint, we just try to give an over, over-exert our efforts with client testimonials, explaining what the process is gonna look like before rollout, during rollout, after rollout. We have a client specialist that that's all she does is handles the rollout process. So like...

She's babysitting that process from the time we make the sale till the time it goes through. And when there is an issue, and there are going to be issues, when there is an issue, you pick up the phone, you call her, you get her on the phone, and she's solving those issues. So it's always hard. It's never easy to hand that off, regardless of if you're new or an established brand. So we just try to make the transition process as smooth as possible and over-communicate.

Brent Peterson (09:02.084)
Um, are there some specific reasons why somebody would go with you rather than FBA or something like that?

Caleb Webster (09:09.25)
Yeah, I think number one is customer service. I feel like as we were establishing, not even trying to give a sales pitch here, but as we were establishing, deciding if we were going to take our services to market or not, what we saw the need for when we started talking to clients is they would have an issue, whatever that day to day issue may be, and they would make a phone call and...

get put through to a call center who then had to put a call through to somebody else who then had to put a call through to somebody else and there was a lot of red tape to cut through and we've just never had that model. It's been hard to maintain at times but we've never had that model like we've tried to make communication as simple as possible and instead of going through three people, our leadership offices here are on the floor. They're not in a different portion of the business. They're out there on the floor. And so...

I think if I had to say why would you choose us, it would be customer service like an issue. We try to mitigate issues obviously on the front end, but when they do occur, like you're gonna get a phone number, you're gonna pick up the phone, you're gonna call a decision maker who's gonna be able to make those changes right then, not three calls later. Well, good.

Brent Peterson (10:22.824)
How about customer experience, specialization or customization? I know that if you're looking at some other three PLs, they're not allowing you to put certain things in the package. I'm assuming that you're allowing, you're making it as much of a customer experience for the end user as possible.

Caleb Webster (10:41.662)
Yeah, absolutely. Without giving away too many trade secrets here, we have never, I'm not gonna say we haven't attempted it, but we have never blended two brands. It just doesn't work. It may work in the short term, but from the time we start the sales process till the time we ship their first order out the door, it's all individualized. We don't commingle products. They may be side by side with another brand or one aisle away, but.

We really, out of all the brands that we represent and fulfill for, we kind of operate those as like independent DCs almost, if you will. It's just more, it's easier for us, quite honestly. There's no brand that has, at least we've not run across them yet, that have the exact same needs. And so, yeah, from picking process to packing process, we work all that into the original quote. It's why we don't have a generic

Rate structure that we send out every time and we get asked that often like hey, just send me your rate structural We don't do that. We you tell us what you need and we'll build a rate structure off of that So yeah all the way through to pack out like there we have different inserts return discount codes, etc that will put in pack out at time of At time of pack out and that's all individualized by brand

Brent Peterson (12:09.105)
It's been my experience in the past that merchants often think that they're the only case in terms of how they do their business. Tell us a win or a couple of wins that you've had and where you've been able to get over that gap and help the customer understand that you're adding a lot of value.

Caleb Webster (12:28.522)
Yeah, well, I think I can tie this back to a question you asked earlier with new brands. And I took that question in a different direction. But I do think that is like a non-tangible benefit that we're able to offer new brands is we've rolled out a good majority of established brands as well as new brands. And there are like best practices without sharing trade secrets that take it as simple as a return discount code, right? Like you would be shocked at how many new brands that we interact with that, that

just don't think to do that, whether that's be putting that return code on the poly bag or the box or an insert, and we're able to offer that advice to new brands, and we've done that multiple times. So I think that's, you know, while they're small, I think that's some benefit, I guess, that we're able to give to brands and establish brands a lot. Much like you said, even established brands that have been doing things a certain way forever, they think they're doing it the best way.

We can offer some advice without sharing too much. Obviously, we protect all of our clients through NDAs, but we can oftentimes share some things that we've seen in the marketplace that we try to stay in our lane. We try to stay on the fulfillment side. And then obviously, I think it goes without saying, but all things logistics, we're able to offer suggestions on, like what kind of shipping product they're using. We see a lot of clients come in.

certainly won't share any carrier names, but we're like, you know, why are you using this product? And the answer is, well, that's how we've always done it, right? So we are, you know, absolutely able to share some insights when certainly when it pertains to things that are within our expertise.

Brent Peterson (14:11.7)
Have you seen a lot of pressure to get things out faster, especially with prime shipping and two-day shipping and things like that?

Caleb Webster (14:20.451)
Yeah. I will do my very, very best to not sound egotistical here, but that has not been our, that has never been a challenge of ours. I don't anticipate it becoming a challenge. I think total year, all full year last year, we averaged somewhere shy of 18 hours dispatch time. And that's all brands. And there's a lot of things that go into that number. So it doesn't mean every order took 18 hours, but we're.

We are, statistically speaking, we're shipping same day. So I hope that is not a fire that we ever have to put out.

Brent Peterson (14:59.046)
How about the end shipping? Because I think that there's some loss that happens in terms of two day shipping, right? Or even same day shipping now. Do you see customers that insist on that? Or how does that work when you start playing outside of the Amazon field?

Caleb Webster (15:14.293)
Yeah.

Yeah, it's been up and down the last few years for sure. I think for a while there, certainly when Prime first came on the market, there was a customer expectation that came hand in hand with that. And I think expectations did increase, at least in a lot of the geographical area around us, Prime actually fell off there for a while where a lot of customers were not getting a two day service. And it was interesting to watch those expectations change.

in relation to that. So we get a little bit of feedback. Luckily we have negotiated some really good carrier contracts and we know for the most part, we know who is performing well and who's not performing well. And we just try to offer that advice, but we haven't gotten, it was a pretty good, I'll say 2023 was a pretty good year for us on end shipping feedback. Two years before that,

different story. Peak season was a challenge when it came to the carriers. Not singling any of them out. There were challenges across the board and there were some bumps in the roads this year with some contract negotiations and things that tied back to that. But for the most part, the end shipping process has been pretty good this year.

Brent Peterson (16:36.532)
Do you offer feedback and advice or consulting to clients who maybe they're losing orders because they're charging shipping on everything or they should have a threshold in which they should just give free shipping?

Caleb Webster (16:52.606)
Yeah, we're very careful. You know, we joke all the time. If you want an opinion, we've got one. And we're very, very careful to stay in our lane when it comes to that. But when asked, we certainly will disclose what we have seen in the marketplace. Where we try to really fit in is, what are your customer expectations? Or what do you think your customer expectations are? And here's the list of services that we think fall within those expectations and...

potentially could give you some package productivity or some postage cost productivity, I should say.

Brent Peterson (17:28.456)
So if you bundle this up, how much savings, like I think that you're a value add, right? But you also want to save the client money. It's often hard for a merchant to understand that by outsourcing their logistics and their shipping, they're actually going to save a lot of money in all kinds of ways. How do you communicate that to your...

Caleb Webster (17:49.34)
Yep.

Brent Peterson (17:53.072)
potential client or client and show them how they're going to get a better ROI by going with somebody like you.

Caleb Webster (17:58.71)
Yeah, well, number one, it goes back to exactly what I led the call off with. You're 100% right, there should be some P&L productivity. So without a doubt, they should get a tangible financial benefit from it. We try to lean in more to the benefits that are maybe not so tangible. If you're not focused on 13 operational related issues a day, what can you go take that bandwidth and focus on? That's where the real game comes from.

We have never, just full transparency, we have never been a cost leader in our space and we don't intend to be that. We are looking for the client that wants a service as if they were doing it in-house or better. And so we try to be productive from a cost standpoint, but our goal is not to be the cheapest. There are three PLs out that is their strategy and that's fine. It's never been Webster's strategy. I don't anticipate it being Webster's strategy.

We're going to give you a service that's competitive cost-wise, but we're going to give you a service that would be managed just like it was in-house. So we don't plug in a ton of the financial benefit, if you will, into our original spill, but we have had clients who have shared like, hey, this is what I spent on fulfillment last year, can you match this? And we're happy to do that analysis at that point.

Brent Peterson (19:23.888)
Yeah, I like how you phrase that. And I'm a big proponent of the, of there's an EOS, entrepreneurial operating system. And there's a concept called the shiny object. And I think that logistics can definitely turn into a shiny object, especially as the business grows and they think that, Oh, we can just do all this on our own. So I like that, that pivot or that way that you presented that, that allows the customer to see that by spending more time and what they're doing,

well at that they'll have more time and do have more growth because of that.

Caleb Webster (19:57.654)
Yeah, and that's not just a sales pitch. I think you could talk to 10 entrepreneurs that have handed it off and they would tell you the same story. It was a true story for us in-house way back when. And so, yeah, 100%. I think the real P&L impact comes through non-tangible areas.

Brent Peterson (20:17.756)
Have you found, just from a business standpoint, you're in Alabama, I think, in the South, has it been a struggle to keep people working in the warehouse? Is it a labor shortage all over the country that we hear?

Caleb Webster (20:30.15)
Sure. Yeah, much like the carrier roller coaster, labor has been a roller coaster as well. We have a phenomenal team in both of our, or have had a phenomenal team in both of our facilities. We are also located near a college campus and we have a phenomenal job profile for college applicants, but we have many career, we have many people here as their primary career a lot. So,

we get a good blend of applicants. And that has put us in a little bit of a bubble from some of the labor challenges that a lot of the country faced over the last three years. But we were not, we definitely experienced it at times, right? Like it has been up and down. We invested very heavily in automation four years ago, to help kind of control some of that, not to reduce labor, but to give us capacity for growth. And so,

Yeah, it's been a roller coaster. It is up and down. You post a rec, sometimes you get 35 afk, sometimes you get three. And it's been up and down. But I will say, I do feel like based on our area, we've been a little bit sheltered from some of those extreme situations that we've talked to. And many of the brands we've talked to, that's the reason we're having the conversation, is they're like, hey, I've outgrown the bandwidth of the town that I'm in.

And so it is certainly been a roller coaster for four years now.

Brent Peterson (22:02.352)
Yeah, I've heard there's some college football that happens in Alabama. I don't know. Anyways. I spend part of my winter in Hawaii now and I know that shipping, there's always this 48 states and then Alaska and Hawaii are separated out. Do you have logistical, is there a formula that you do to get things to Hawaii? And does it impact the-

Caleb Webster (22:07.114)
Yeah, yeah, maybe a little bit.

Brent Peterson (22:30.28)
clients you have or it doesn't matter people are going to ship there no matter what.

Caleb Webster (22:35.114)
Yeah, I think it depends on brand right but yeah, we ship to obviously all 50 states Canada and many other countries Give ship here. Oh a shameless plug here. We we use ship heroes our WMS system and they're a phenomenal partner in figuring out What postage makes the most sense and so we always offer that as a solution to any of the brands that we're working with is like

You give us the parameters that you want to ship with and we will use the cheapest option following those parameters. So we don't have to put a lot of manual effort into that. We have a phenomenal WMS partner and they help us figure the logic behind that.

Brent Peterson (23:22.804)
That's awesome. I'm also very familiar with ShipHero. What do you, what sort of advice, we're going into 2024 now, what sort of advice would you give a merchant to start exploring 3PLs?

Caleb Webster (23:35.39)
Just have the conversation. There is no love lost by having a conversation. We've even had brands come on site here. You know, we again, have to do all the right things to protect the brands that we have in house. But yeah, just have the conversation. We have had multiple conversations where it's like, hey, they're a prime example right now. I'm having a conversation with a company that we have been talking for two years now, and we may never...

We may never ship the first product for them, but I have learned stuff in the process. They have learned stuff in the process, and they're not ready to hand it off yet. But every two or three months, we pick the conversation back up and we say, hey, does this make sense? Does it not make sense? And we share strategy and different things. So yeah, I think that would be my advice. Just have the conversation. There is no, we don't, we have zero commitment. We are happy to hop on a Google Meet with you and...

We will be the first to tell you if we think we're not a good fit because we do not, I mean, selfishly we did not want to waste bandwidth or time on a brand that we don't think we're going to be successful for because everybody that talks about Webster Fulfillment to talk about how good of a job they did for them and representing them and so, yeah, we are always open to having that intro conversation and just exploring.

Brent Peterson (24:58.196)
That's awesome, Caleb. As I close up the podcast, I give everybody a chance to do a shameless plug. What would you like to plug today?

Caleb Webster (25:05.134)
I feel like I've plugged a lot today and not meant to. I will go back to that last question. And Brad, I certainly appreciate the time today. It's just have the conversation, right? If you're interested in learning more, we are not a big box fulfillment center. We are gonna be a tailored approach. You know, we're probably not gonna be the cheapest. Hope we're not the most expensive. I hope we're somewhere in the middle, but have the conversation. Let us see if we can help you. If we think we can't help you.

We will gladly tell you that we don't think we can help you. But if you're looking for somebody that's going to treat your brand like they're owned, that is quite honestly us. It's physically how we started the 3PL. So we are here to take care of your brand, to nurture your brand and help you succeed. Your success is our success. So yeah, that's my plug.

Brent Peterson (25:58.044)
That's awesome. Caleb Webster, founder of Webster fulfillment. Thank you so much for being here today.

Caleb Webster (26:02.454)
Yeah, thanks so much for having me.