Whats the role of Ops in a Brand?

Are you in the logistics business?

Customers expect Christmas Delivery.
Even today, on the 18th.

50% of people, who work in or around brands (because why else would they follow me) still expect Christmas delivery.

Ill admit I havent even started shopping yet.

But, as I click around, I see like 40% of merchants offering it.
Either they didnt plan for it, or they dont think the fulfillment rails can deliver it.

But look at this data from Mastercard-

November and BFCM are a head rush of sales, but there is more revenue up for grabs in December.

Every day we push past the 12/15 standard cut off, we capture a bigger and bigger percent of the market.

Ridge is guaranteeing delivery for orders up to the 19th.
Then we push everyone to amazon until the 22nd.

We are by no means experts at this.
I know some brands guaranteeing sales up to the 21st.

But I think this starts a great conversation-

What is the role of ops inside your brand?

As a brand matures the role of ops changes.

Most brands start off with the core team doing fulfillment in a garage, office, or bedroom.

This is where the first divergence happens.
Build a warehouse and continue to own fulfillment?
Or get a 3Pl?

Lets talk the pros and cons of both:

Own your fulfillment:

Pros:

• “we will do it right”- owning it ensures it is done the way you want

• Real estate benefits- owning your warehouse means owning a building

• Can be cheaper in some circumstances

• Lets you do more value add services- customization, kitting, inserts, etc

Cons:

• Fixed size- what if your business doubles? do you operate 2 warehouses?

• Fixed location- where you happen to live isnt the best place to ship from. You will have more expensive rates and longer ship times by being in one random location

• Managing staff- Ridge only has 53 fulltime W2 staff. We have 10,000 order days. Between receiving, wholesale, and normal fulfillment we would need probably 50 more warehouse employees

• Can be more expensive.

Own what makes you special.
Does logistics make you special?

Companies need to own their innovation chain.
Ridge is a product company. We design all our products in house.
We need to create new to earth designs and that is something that has to be wholly owned.

Ridge is a marketing company.
We run all channels in house because marketing makes us special.

People come to us from marketing, for products.

But our logistics can be pretty average.
We dont deliver big items.
We dont have a lot of returns.
We dont ship living things.

So, knowing that you cant be best at everything, we decided to outsources our most average trait.

Could our logistics be done better in house?
For sure.

but that would require me sacrificing time and energy from some other bucket.
And it just isnt worth it.

Ridge POV-
How 3PLs made our business better.

Brands tell me all the time “we could never use a 3pl, we are special”.
No you arent.

Unless you are shipping live lizards across the country, you just arent all that special.
There is some 3PL somewhere who would handle your business just fine.

Sure we had hiccups. We had a horrible 3PL partner once, lost $100,000 worth of inventory. But if you ask around, you will find a reasonable partner in no time.

Using a 3PL let us focus on growth, but it also had some tangible benefits.

• we ship from 3 nodes.

  • Nothing ships past zone 4, we can ship using the cheapest method and still get 4 day delivery times

• we ship in as much as we want, when we want too, and let someone else deal with it

  • Ridge used to carry 1 year of inventory on hand and never had to worry about space

• Dont have to deal with staffing

  • People are the hardest part of any business. We dont have to deal with holidays, peak, sick time. Thats all outsourced

• We save money

  • This is really a byproduct of the nodes and scale

  • 3PLs do get better rates than a solo warehouse will.

  • Ridge has a lot of volume and 3PLs will break even on our account to get that volume for negotiations

DIY fulfillment is fine un til you hit like 20m.
Somewhere between 20-50m you need to use a 3PL or at least onboard some parts of the business to a 3PL.

(unless you are actually competing as a logistics company)

At some point, north of 100m, close to a billion, you do bring it back in house.
But you need the flexibility in your teenage years.