Partnering with a 3PL – it’s all about fit
Redsbaby talk to us about partnering with a 3PL
Brett Redelman is the co-founder, with his wife Meagan, of Redsbaby a thriving online store for beautiful, functional prams. Now you might be thinking that the company started after they had a less than stellar experience pram shopping for their own bub, but no. Before kids, Brett and Meagan were looking to escape their lives in corporate to satisfy their entrepreneurial dreams – they just didn’t know what they’d sell. They were clear they needed to sell a physical product, direct to the consumer.
Coghlan: Brett, tell me a bit about what inspired Redsbaby?
Brett: It’s funny, everyone always thinks that ‘oh, you had kids and you must have realised something wasn’t working for you’. But really, we wanted to start an online store and after brainstorming many, many ideas – we almost started a shoe business, but couldn’t make it work on paper – we thought about prams. Most of what we’d seen was ugly, black and overpriced. We told a couple of friends and they flat out thought we were crazy. First prams and second, online. No-one had ever done that before. But Meagan was adamant, traditional retail, where she knew from her previous career in marketing that we’d be at the mercy of the major players supporting huge rents, wasn’t for us.
And so our online business was born.
What were some of the biggest challenges you faced initially?
Brett: The biggest challenge was being an online company. With prams, parents, especially mums, need to get a feel for the pram. They need to make sure it will ‘fit’ their’s and their baby’s needs, they need to trust it. That’s hard on a computer screen. So, to be truthful with you, we sold prams out of the back of the car. Yes, sure, we launched the website and paid for some advertising. But at the end of the day, it was door-to-door sales. If anyone came through the website and said they wanted to see a pram, I’d drive to their house and show them. It was a tough business model – I could really only do 2-3 showings a day, and thankfully we outgrew that and I moved to sitting in Centennial Park where I could see six people, who’d registered via the website, in a day. At that point, we hired our first location which turned out to be a success and we knew we had a continuing business.
You know we launched the business with $40,000 including stock and web site for launch. We broke even after six months and have never had any debt since.
Wow! That’s great. What do you think really made the difference in growing your business?
Brett: I think it’s so important for new businesses to really, really live for their customers and customer care. We absolutely live by customer service in this company. For us, it’s about building trust. Especially in beginning, trust is a lot of little things – like how quickly you respond to a customer’s email. I mean when you’re launching a business you do not sleep. If the customer writes you a note at 11 o’clock one night, you respond within five minutes. So the customer knows there’s a real person behind it. And that gives people trust.
If something goes wrong, you hop on that phone within 20 minutes and you call them, you fix the problem.
That’s how people refer you – they trust your brand.
What else can ecommerce owners do to build customer trust?
Brett: There are also other simple things like having trustable badges on your website, trusted payment gateways. And the real biggie? Having reviews. There’s no doubt reviews actually drive sales today – reviews on your own website and reviews on third party websites. One of the big successes for our business was that we knew that reviews were critically important
And that’s where online business owners have a huge advantage over those that sell through big retail – where the brand owner doesn’t own their database, the retailer (think: David Jones) does.
Obviously you’ve been able to scale your business to tens of thousands of customers. What was the key there?
Brett: Oh I remember that moment really clearly. I was sitting on a bus in Melbourne when realised I had a 20 foot container arriving next week and I didn’t have anywhere to put it – we’d outgrown our old storage. So I Googled fulfilment centres, I called two or three and very fortunately ended up with Rolf and Kevin at Coghlan. That was four years ago.
“At the end of the day a 3PL is the lifeblood of any growing e-commerce business. The relationship you have with in partnering with a 3PL is so important and when you start to really do volume you really rely on them.”
Working with the wrong 3PL can take your whole company down, destroy all the trust you’ve built. We had a very narrow escape with another 3PL along the way.
What do you think would’ve happened if you hadn’t outsourced to the right 3PL provider?
Brett: Business would have been impossible! I just would not have been able to have a sustainable business. Not partnering with a 3PL wasn’t an option. I’m just fortunate enough that we chose to go with Coghlan.
What would you say to someone looking to grow their online business?
Brett: You simply must spend time on strategic development of your business. If you run an ecommerce business you can’t be an expert in all areas. And while you might pay a premium on operational costs, partnering with a 3PL company, the right one, means better customer service because that’s all they do, day in, day out and it will free up your time.
So what would you tell someone thinking about partnering with a 3PL?
Brett: Don’t just look at it as a dollar cost. You might think partnering with a 3PL will cost you more per unit to dispatch but when you put a value on your time, you realize you’ll have more time, which means access to explore opportunities that present themselves. Oh and you’ll have happier customers too. It’s not about the 10 items you might send this week or even today. Think about it for when you’re sending 50 or 100 items. If you want to get to that 100 items per day, you’re going to have to free your time up to strategically plan and you’ve got to really be with a warehouse earlier than you think, so that when you get there, to your growth point, whatever number that is for you, it’s much easier for you to do that.
Also from a cost perspective, to find a warehouse of the size I would require – plus the labour and the racking, it would completely use up all my time and a lot of cash flow.
In the end, partnering with a 3PL is and is an extension of your business. You have to treat your 3PL team like they’re part of your business. It’s not ” Here you go. You deal with it.”
“Partnering with a 3PL is actually a real business relationship. You’ve gotta get the fit right.”
Why Coghlan as 3PL for Redsbaby?
Brett: With Rolf and Kevin, the whole Coghlan team really, it’s not just a business. They genuinely care about their customers. They go above and beyond to really support them. You know when I rolled in recently with 10 trucks, which isn’t exactly an overnight operation and yet I required it overnight. Rolf put in hours and hours. They really went above and beyond. I’ve seen a lot of 3PLs out there. I’ve met a lot of 3PLs and at the end of the day, you’ve gotta partner up with a team that has the same beliefs as you and that’s really what Coghlan has. We fit.
What’s next for Redsbaby?
Brett: Now that we’ve got a solid business model in Australia, we are continuing to grow and expand our product range outside of prams.
Congratulations Brett, Meagan and the whole Redsbaby team on your success so far. We’re thrilled to be partners in your success.