This week we catch up with Jordan Harrison, one of the founders at Malpa ecommerce 3PL in Brisbane, to talk about:
- his experiences with eCommerce stores that scale and the 3 points to focus on
- how to properly leverage third party logistics (3PL) to grow and what to look for in a 3PL provider
- Malpa’s upcoming offer to get stores started inside the warehouse
Read on below.
Just to start, tell us a little bit about yourself and Malpa 3PL.
Sure. I started Malpa back in 2020 when my wife and I tried to start our own maternity brand but couldn’t really find anything out where we lived that could offer to hold our stock, pick pack and send for a reasonable price. So we noticed there was a gap for third party logistics (3PL) providers who are open to helping not just big stores but smaller and startup stores too.
After getting the idea, I talked to my mate in Brisbane and suggested we team up, with him being in charge of fulfilment and I’ll handle the other parts of the business. I’m a mechanical engineer by trade and my partner was in business as an electrician. It sounds like a bit of a weird mix but it actually works out great. He’s amazingly efficient with pick, pack and sending and I’m always tinkering with the workflow to make sure we’re as cost effective as possible without sacrificing the quality. Anyone can cut corners, but it’s another thing to really work out how to do things efficiently and keep the service standards great.
For Malpa, Malpa is a word from the Indigenous Australian language Pitjantjatjara, spoken in the central desert region of the Northern Territory. It means: friend or companion, to come alongside and journey with.
Awesome. So given your background, I’m curious to know -when should people use 3PL?
You know it’s a funny question. I think when people think of 3PL, they usually think that only larger businesses can access these types of services. But I’d encourage people to check out some of the newer wave of 3PLs who are typically more open to working more flexibly and with smaller operations.
Aside from that, you really need to work out when the cost of the logistics part of your business is outweighing the time you can spend on other areas of your business.
A good rule of thumb is, when you think “I wish there was more time in the day” for more than 2-3 weeks, it’s time to consider working with a 3PL.
In my view, there are really 3 parts to any ecommerce business; product, marketing, and fulfilment and to truly scale, you need to nail all 3.
A lot of people I’ve seen don’t realise that the time they spend in line at Auspost or scrambling to handle fulfilment of orders (can you imagine what happens when you get a 300 order spike?) is taking away precious time from working on developing future growth through a new line of products or improving their marketing. It can be a real hidden cost and something that people don’t pay enough attention to.
Once the cost of running the fulfilment of your business outweighs the value you’d get in spending that time and money on developing your marketing and products, I definitely encourage people to start thinking about using a 3PL provider.
That’s an interesting view on scaling eCommerce businesses. Do you mind telling us a bit more about that?
Basically, when you want to scale I see it comes to those 3 parts. A lot of store owners are missing out on one, and only getting short-term growth.
These days, there are plenty of people who are great at helping with the marketing, but what I see is not a lot of people are fully grasping the idea of opportunity cost when it comes to logistics.
For example, maybe doing the fulfilment takes you a couple hours a week. But those hours can add up into days per month, and weeks in a year. What could you have done with that time? Find another wholesaler, worked out improvements on your Facebook ads campaigns, added features to your website, etc. All the little things add up.
What’s your advice on picking a 3PL provider?
Have a look at some of the new wave 3PLs on the scene who are startup and SME business friendly.
A lot of people have this hesitation with 3PL as though they only handle 500+ orders per month and products with specific fittings, but things are changing.
Newer 3PLs can be surprisingly open to helping you get your products sale-ready. For example, you might only have products available in bulk boxes, containers or drums, that need breaking down and finishing before sending. A traditional 3PL would be very unlikely to do this but newer 3PLs like Malpa would be more than happy to because we work with startup and growing businesses all the time. And the way we think about it is that if they grow, we can grow too.
Gotcha. And do you have any tips for people considering making a change to 3PL? How can they make sure the change goes smoothly?
- Find a small, niche 3PL that is open to working with startups or new businesses.
- Make sure that they can integrate well with their system, look for:
- API integration with your store
- Stock level updates
- Shipping/tracking codes being sent to your customers through your system
- Check that you really ‘gel’ with the team. You want to work with someone who is happy to take your calls and to work with you. (Ben: Don’t take this for granted, not every provider will be like this. I know from personal experience!)
- Get their pricing structure and run a few scenarios through with them to make sure you both understand the costs. For example, make up a few complicated and routine orders and run a price or two on them so you can compare.
- Consider making your own requirements less flexible if you want to save costs. This is something you have control over so if you can make adjustments, you may be able to reduce the costs.
- Check for unexpected fees. Some things that people might charge for are stuff like adding A6 ‘thank you’ or promotion cards (we do this for free), but come up as additional costs.
Really useful advice, thank you. And earlier, you mentioned you’re looking to start a coworking space inside your warehouse. What is the vision for this?
Yeah it’s really exciting actually, we’re getting it setup and decorated to make it a really great space for about 6 eCommerce startups.
The idea here is that folks can both find a good place for starting and growing their stores but also see first hand how 3PL works and get insight into the logistics part of their business.
It will have all the usual perks like desk space, unlimited internet, coffee, internet, about 4.4 square metres of warehouse storage space, but the real benefit comes in accessing all our shipment facilities. For example, people will get full access to our thermal printer for printing shipping labels so they can save about $1-$2.5 for shipping, not counting the time waiting in line at Auspost.
What made you think of the idea?
From the very beginning, we kind of took a leap and picked out a nicer warehouse than we really needed. We wanted to create a space where clients could come and have coffee or feel comfortable having a beer with us.
Part of the space is a top level in the warehouse, so it got us thinking about what we’re going to do with the space. Eventually we came up with this idea for hosting a coworking space.
What’s the future for Malpa 3PL?
Right now, I’m really working on finding a way of opening up American markets for our clients. A lot of people have really good products at mid-ticket price points but it’s just crazy how much it costs to send something over there.
If we can just about halve the cost of sending mid-ticket items to the US, I think our clients will be really happy. I think this can help them grow.