My warehouse is 10,000 SQ ft. It’s not massive, but it is not a minor operation. There are about 15–20 employees on payroll to help receive inventory, break down daily shipments, and stock the goods in their proper order on each shelf.
Picking the daily orders. Packaging the items with protective materials to keep them safe. Boxing everything and applying the customer’s preferred shipping method. It sounds mundane, sure – but my workers view their jobs as a means to an end. They don’t care about the success of my business. I am forced to hire an Amazon suspension appeal expert every other month because my order defect rate always being so high.
That warehouse costs $12,000 per month, and that’s just the monthly rent. Besides that, tack on utilities, insurance, property taxes, and other standard business operating costs. I’m finding myself spending a small fortune on those stupid little “Keurig Coffee Pods” because my employees seem to believe that they are entitled to having a high-end coffeehouse for a break room, and I’m too insecure about being called cheap, I just carry on.
15–20 unique personalities, personal stories, problems, and who knows what else. Healthcare, Social Security, Unemployment, cameras all over the warehouse, time spent viewing these cameras. Even when operating at its maximum potential, the operation is just barely at the point of controlled chaos – let alone in harmony. All of this, and what am I ultimately doing my best to accomplish? I’m looking to receive the goods from the suppliers that I order from, store them, and ship them out.
This guy Jeff walks into my office at the warehouse one day and says, “Listen, Joe. I’m going to make you an offer that you can’t refuse. Do you see this warehouse? You can get rid of the entire thing. Say goodbye to paying for benefits, Worker’s Comp, Social Security, and so much more. Forget about how Jillian the blonde, hates Stephanie the brunette – plus, security just told you they have learned that Jillian has a history of office place violence.” Poof – GONE.
“Go sit on a beach with a laptop and your cell phone,” Jeff says. “You source your products. Make the deals with the suppliers, and then place orders for the products. Have the suppliers ship your orders to one of my 100+ massive warehouses across the country where my workforce of 125,000+ employees will receive them, store them, and pick, pack and ship them when an order comes in. I’ll even throw in 2-day shipping — on us. You on a beach with your laptop and a phone. I’ll make this happen for you and ask for 1/3 of the sales.”
Woah, there. A 1/3 partner — pretty big deal. Jeff, you will take this massive, expensive operation off of my hands and mind? You will eliminate how much in company expenses? Are you seriously insisting on handling all the customer service issues that come with my entire business as well? You say that your company has revolutionized modern-day logistics and continues to maintain the benchmark standard? Well, Mr. Bezos, sir – where do I sign?
Joe Nilsen has been active on the Amazon platform for over 10 years both selling and consulting. Having worked with over 450 sellers over the previous five years, there are few unique issues that he doesn’t have experience in addressing and overcoming.