How Lee Thompson built logistics pioneer fulfilmentcrowd
Hi Lee! What does fulfilmentcrowd do?
fulfilmentcrowd provides the software technology, international network of distribution centres and shipping services that enable independent online retailers to outsource their fulfilment services to meet customer demand and scale their businesses.
What's your biggest strength?
Our technology, unique business model and international network. Combined, these strengths enable us to engage, onboard and start shipping goods for a customer within days, from any of our centres in the UK, EU and USA.
We’re successful because we’re dedicated to making fulfilment easy, removing all the ‘grit’ from our customer’s experience, and providing them with total control and oversight using the fulfilmentcrowd app.
What made you think there was money in this?
We started off by making no money at all. Indeed, we lost a lot of it through our early growth years because the model wasn’t right.
The traditional approach to logistics is what I call ‘Four Walls’ whereby a provider leases space and employs people to satisfy demand. However, the reality is that the space will either be under-utilised or at capacity – there’s literally a 10% envelope during which a warehouse could be considered operating at optimum productivity.
After seeing the early successes of tech unicorns like Uber and AirBnB, we started to apply sharing economy principles and technology to the problem.
fulfilmentcrowd is built on a network of partner centres who provide the capacity and resources to fulfil orders. We control all of this using our technology and deep knowledge of key disciplines like workflow, inventory management and user experience.
Our variable cost model enables us to simplify pricing and control margins that you can set your watch by.
Where is the business today?
The business doubled in size during the pandemic as we were well-equipped with rapid self-onboarding and plentiful capacity in our network. In early 2021, we secured investment from BGF and we are busily putting that capital to work, building our European network and continuously improving the fulfilmentcrowd app. We are planning on a 20% uplift in revenue this year and expect the European business to outstrip our UK activities within the next two years.
What is the secret to making the business work?
Hard work, clarity (we measure and operate the business against 5 strategic pillars), ambition and calculated risk-taking….all wrapped up with the ‘owner mentality’ – by that I mean empowering your team to take responsibility for outcomes and the decisions that will lead to those outcomes.
How do you market the company?
We grew the business aggressively through performance marketing with consistent conversion and acquisition metrics driving investment. However, I think it’s important that every company is never too reliant on one channel. Accordingly, we now have a more balanced programme that threads online advertising into offline brand building and targeted campaigns. Everything starts with knowing which people you want to target, beyond that we are quite experimental and prepared to fail fast if something is not working.
What funding do you have? Is it enough?
Our business is well-capitalised for the current investment cycle which is focussed on UK and EU expansion. We have a break-even US business that is ‘in abeyance’ and a model that would logically take us worldwide beyond the next event.
Tell us about the business model
I come from a sales and marketing background and was often bemused by pricing strategies adopted by competitors whose BDMs were allowed to run wild proposing rates that, at best, were made for the birds.
fulfilmentcrowd has one tariff (with volume discounts built in) and every client is contracted to it. In practice, this removes price as the primary/only topic of conversation with a new enquirer and focusses on our value proposition.
But, we can only offer a universal tariff because of our business model and variable cost structure that also enables us to tune margins on any activity line.
What were you doing before?
We were a privately held, low-growth and life-styled software development business. It sounds grim, but it took an epiphany to realise that our experience in technology and the platform we had developed was the key to unlock a completely different future.
What is the future vision?
To become the fulfilment platform of choice for high-growth online retailers around the world.