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E56: Nathan Kelleher

How to Nail Your Business’ Logistics for the Best Customer Experience

Podcast Overview

Well, this is a first for the podcast…this week we’re introducing Nathan Kelleher, our first-ever logistics specialist on the show!

Of course, we took this opportunity to ask Nathan all about how the logistics processes can affect the overall customer experience and how good product delivery can be key to a store’s success. 

And we couldn’t have a logistics episode without discussing Amazon, the absolute king of delivery, and how independent eCommerce stores can go about competing against their Prime next day delivery service. 

For tips and insights into the importance of getting the logistics of your store right and how to nail your delivery service so customers keep coming back for more, tune into this episode!

eCom@One Presents

Nathan Kelleher

Nathan is an experienced eCommerce logistics professional and eCommerce entrepreneur. Having been given the opportunity to work at the Sydney Olympics in a logistics role after finishing university, Nathan has since taken on a number of senior roles helping businesses to optimise their fulfilment processes. 

In this episode, we spoke to Nathan about the basics of eCommerce logistics, from deciding whether to fulfil orders yourself or to source a provider, to what you should be considering when sourcing that provider so that you pick one that is best suited to your business.

We also discuss the pros and cons of both free and paid delivery, as well as the increasing demand for free next day delivery since the boom of Amazon Prime and how smaller businesses can start to implement it in an efficient way.

The quality of your business’ delivery service has a huge impact on your customers’ perceptions of the business, which is why it is essential to get right. So get listening and take in the great advice Nathan has to offer to nail your business’ logistics. 

Topics Covered:

01:17 – How Nathan started in logistics and delivery

02:50 – Where to get started with logistics

04:54 – Pros and cons fulfilling orders yourself vs. sourcing a provider

06:17 – Things to consider when sourcing your logistics provider

12:00 – How can independent eCommerce stores compete with Amazon Prime delivery?

15:26 – Free vs. paid delivery

19:05 – How important is it to get your delivery right?

22:08 – Tips to implement next day delivery efficiently

24:14 – Nathan’s opinions on turning delivery into a profit centre

27:13 – How will businesses cope with increasing demand for next day delivery?

31:12 – Book recommendation

 

Richard Hill:
Hi there. I'm Richard Hill, the host of eCom@One. Welcome to our 56th episode. In this episode, I speak with Nathan Kelleher, experienced eCommerce logistics pro, investor, and eCommerce entrepreneur.

Richard Hill:
I think this is a first at eCom@One, where we focus on logistics and delivery, something that is so important for all stores, and sort of our key to get right.

Richard Hill:
Myself and Nathan go into all things you should be asking your provider, to ensure they manage your future growth plans. We talk about Amazon, and how to compete with their delivery offers. We talk about free delivery, and Nathan's thoughts on how getting delivery right is so important for a store's success. And finally, you want to listen to Nathan's thoughts on making delivery a profit center, not a cost.

Richard Hill:
If you enjoy this episode, please make sure you subscribe, so you are always the first to know when a new episode is released. Now, let's head over to this fantastic episode.

Richard Hill:
How you doing, Nathan?

Nathan Kelleher:
Yeah, pretty good. Thanks, man. Thanks for having me on.

Richard Hill:
No problem at all. No problem.

Richard Hill:
So we've not actually done an episode around logistics and delivery, and this sort of... Obviously, it's a huge area for all eCommerce entrepreneurs and stores, whether you're starting out and deciding that sort of, "Right, what we're going to do?" Literally. We've got to deliver stuff, ultimately. And that's obviously a huge part of every eCom store and most businesses in this day and age. So how did you get into logistics and delivery, Nathan?

Nathan Kelleher:
Yeah, it was an unusual path. Actually, I originally was doing Sports Management, Sports Marketing at uni. So, that was where I was going to go. I've finished... And I'm showing my age here, but I finished at the time when the Sydney Olympics were kicking off, at the turn of the century. And an opportunity came up to work at the Olympics, which was amazing for me. I was in logistics. So logistics was something that's like a new world I didn't know much about. And that was literally the boiling pot, the biggest event on the planet.

Nathan Kelleher:
So got into there, and then post that, which was really enjoyable. Logistics kind of made sense. And eCommerce was blossoming, so I got into eCommerce. And yeah, I saw logistics as a way to sort of take me around the world. I hadn't traveled a lot. So the last 20 years, logistics has taken me every corner of the globe. So I'm very happy about that.

Richard Hill:
So it was more of a "get some free travel out of it". Maybe it was the first.

Nathan Kelleher:
That was definitely something.

Richard Hill:
I could see that as a definite draw. I'd be there as well, I think. Yeah. I've got a friend of mine that actually worked for Amazon for many years. And he was moving around sort of various logistics centers, and setting them up and whatnot.

Nathan Kelleher:
Yeah, I clocked a lot of miles over the years, doing that. So yeah, it definitely was the right choice.

Richard Hill:
So, when we talk about logistics... Obviously, the guys that are listening into the episode, they've got their store, or thinking of launching a store, or they're doing a hundred million already. Where would you start? When you're thinking about logistics, who to, sort of, partner with? What are some of the things you need to be thinking through before you start?

Nathan Kelleher:
Yeah, certainly. So I think one of the key things that people... And you mentioned, logistics, you hadn't had on yet. And see now, often people leave the logistics to the end. It probably should be the first, but I might be biased. But looking at logistics strategy, it needs to be fit to purpose. So one of the keys things to consider is depending what product or what service you're offering, where you're going to manufacture. Obviously, if people are manufacturing in Asia, it's got different challenges to U.S. or Europe. And as we've seen with Brexit, in the last 12 months, even your own backyard can be awfully difficult. So you need to look at things like warehousing. That's a big part of logistics strategy. Where are you going to house things? Where is your product's going to sit?

Nathan Kelleher:
And probably the one that's forgotten about, but becomes very relevant, is the customer experience aspect. So it doesn't matter how good you do if your customers aren't happy. Yeah, logistics is likely to be a strangle point, where it's going to break down.

Richard Hill:
This experience, it's a touch point with your client. And if they've been on the website, they've ordered the thing, the customer has. And then, they're waiting for that thing. That's like a hottest part of that brand, experience is. If it's just thrown in the corner, I guess that's a bit of a problem. Yeah. And there's a lot of things you can do there. Yeah.

Nathan Kelleher:
Exactly. And you can have the best branding, you can have the number one Instagram store, you can do everything that's well. But if that product doesn't end up in their hands, then that's a bad experience. And yeah, they do, they're talking with their feet, so you're going to lose a customer.

Richard Hill:
So I guess logistics is where, sort of, got our store. I guess there's all different people listening to the podcast. And so when we talk about logistics, we obviously got the delivery element. We're delivering a product, whether that's this big or three pallets worth of stuff. Or in some instances, and then a lot more instances now, your logistics is very much you're housing pallets of product for those clients. So, it's two quite different things, what you're doing, sort of.

Richard Hill:
I've got a friend of mine, used to have a business where he had about 2,000 pallet warehouse. And firms would pay a fee. Then, there'd be charge for every pallet that came in, and there'd be charge for every SKU that went out the door.

Richard Hill:
So, there's sort of two sides there, quite different. Obviously, if you're housing everything yourself, it's more so, I guess that's more like a... Well, our term is like a courier type service.

Nathan Kelleher:
Yeah. So there's different ways you can approach that. So you can do it all yourself. And most companies when they're starting out, and I'm sure a lot of people listening to this, they're just starting a company, you will find you'll do it all yourself. Because you've got the orders, and it's the best way to learn your product and to learn what's going to happen. But pretty quickly, that either gets old very quick, or if you're very successful, gets very difficult to continue.

Nathan Kelleher:
So then you've got to start looking at who's going to have as much love for my brand as I do. And that is a big moment, that first time that you give to someone else to go and do that. And there's a lot of good providers out there, but once again, they got to be fit to your purpose. And just because they're good at fashion doesn't mean they're going to be really good at your drinks brand, for example.

Richard Hill:
It's quite a thing, isn't it? So you built a business to a point you're doing well, but then you're hitting that tipping point, where it's better to let somebody else take care of that. What would you say to the guys that are listening, that are maybe at that point or stepping up into that point? What sort of questions should they be asking their provider? What sort of things should they be, for potential provider? Should they be looking out for, like you said, obviously, how they handle particular product? What sort of things should they be looking out for, really, specifically? Because it is quite a big thing, isn't it? You built your baby, from one order a day to whatever the number is, thousand orders a day. And then it's like, "Do you know what? We need somebody else to take care of this." You understand? Big step.

Nathan Kelleher:
Yeah, it's massive. I've dealt with, in my previous roles, we were dealing a lot with eCommerce startups, in terms of them launching businesses. And what we found is that they didn't want to give that up. They didn't want to give up the logistics, and they were wanting to keep it, micromanage that. And you get to a point where you start to stop trying to get new business because you can't do what you've got. And when you get to that point, it's kind of counterproductive. So, thinking of growth of business, you've got to do that.

Nathan Kelleher:
So I guess the primary thing, when you're looking at a third party provider, is looking that they fit your brand. So I use an example there, is that if you've got a 3PL provider that works in pallets, and as you mentioned, they've got thousands of pallets. They're not going to be very good at wrapping up trinkets or fashion brands and stuff like that, necessarily. But then flip that, and now if you've got large pallets, the last thing you want is someone who's using manual, running around manually, doing stuff in a warehouse, because they're not going to be able to fulfill the needs. I think that's probably one thing.

Nathan Kelleher:
The second thing is once you're not controlling the experience, you've got to control when stuff goes out. So if your experience is for your customers, that they're loving, is that they order and you're packing it up that night till midnight, and then sending it the following morning, and they're getting it. That's one experience. You might not get that with a third party. So you've really got to talk to them about that. And make sure that you don't drop off a cliff because customers drop off with it. And it's tough when your customers go.

Richard Hill:
I think there's some great points there, isn't there? I've been sort of thinking back because I used to have served 25,000 square feet in this that. There were about 1,500 lines, maybe 1,400 lines. Yeah, some of them were as big as... There were things like that, that were a thousand pounds. There'd be stuff this big, which was £40, and every variation of that. So making sure that they're able to deal with your size of products and your value of product. I guess, it's that insurance element or that value element. If it's just sort of lower end pallets and big volume, that's one type of logistics centre. But if it's trinkets, and they've got watches that are obviously very high value and small, right? When you sell PCs and computers, so you can have a pallet that was half million quid. It was quite -

Nathan Kelleher:
Yeah, exactly. And then you got to look at the provider to make sure that they're delivering it properly. Because if you're sending out expensive computer equipment, and they're a haphazard carrier, they're about throwing things in the van rather than white glove service, you end up with a lot of breakages and returns. So there's all those factors.

Richard Hill:
White gloves are the one, isn't it? It's quite nice when you see that on a website when you're buying at certain value, pieces of furniture. I used to also sell TV stands, actually. This is like... I'm going way back. This is about 14 years ago. TV stands, TV brackets. We offered a white glove service back then, for certain TV stands that were, I think, it was like £800. Reasonable value, not massive.

Richard Hill:
But yeah, so getting that fit and obviously, making sure that experience... They obviously have an amazing experience on the website, but then what's the experience like afterwards, is absolutely key.

Richard Hill:
I want to go and visit, is that quite normal? I want to go and visit...

Nathan Kelleher:
A hundred percent. Look, it's difficult at the moment. I hate to be starting an eCommerce business right now. Just last year, we got caught up because of our logistics experiences in the whole PPE, global wars of moving material around. And there's so many shonky people getting involved in logistics, who have no logistics experience. And so, just trying to get a business set up, we've been [inaudible 00:11:38], see how they operate. People have been doing that a long time overseas, but now you literally, down the road, you can't deal with it. So COVID's brought its own challenges, definitely.

Richard Hill:
Yeah, hasn't it? I guess. But in the same respect, it's brought massive opportunities for, I would say, the majority of eCommerce stores, as we found over the last sort of 12 months nearly.

Richard Hill:
I don't think we can do an episode on logistics and delivery without talking about Amazon, I'm afraid.

Nathan Kelleher:
Yeah, that's fine.

Richard Hill:
So obviously, they seem to have got you down, in reality, in terms of obviously, in a lot of areas. It goes without saying, delivery pace, specifically, you pay your Prime or not. You pay your Prime, quite often, I think it's up until 10:00 that day. And the next thing you know, it's here in the morning. Do you think that independent eCommerce stores can compete with that, and moving forward, can keep up with them on their sort of delivery offer?

Nathan Kelleher:
Yeah, look, effectively, you can kind of match what Amazon does now. The problem is the costs. The cost on doing that is ridiculous. You look at Amazon, three or four years ago, I think they were spending about $10 billion or investing $10 billion into their logistics, and just taking it as a loss. They had other passive business to subsidize it. That experience became the standard. And I can tell you that working in our old business, Temando, that we were dealing with retailers. And retailers were like, "I want that experience. I want that free delivery, same day, next day sort of delivery." And then when you went through the pricing, they were like, "Oh, we can't support that." And we were like, "No, you can't."

Nathan Kelleher:
Amazon changed a lot. They've put all their DCs closer. Certainly, you look at the U.S., DCs are close, which means you can now do free delivery. And Prime is an example there, with a subscription service and the such, which I'm sure we'll get into. But one of the things is for retailers to match that service, you potentially are going to put yourself out of business. And we've seen a lot of companies deal with paying.

Nathan Kelleher:
I know everyone loves it, and everyone says they love that sort of level of service. But I think next day is fine. I think the kind of thing you've got to think about as a business is, "Can I give them options?" If a customer wants it same day, they'll pay for it. If they want it next day for free, then I'll pick that option. And your customer service goes down, in terms of inquiries. Because if you're the one picking it for them, and it goes wrong, it's kind of blow back on you. And if you give people options, and the option they pick is going to deliver in two days or three days, so be it.

Nathan Kelleher:
And there's a lot of big businesses, that are working on wholesale, that are delivering products to people two, three weeks later, out of China. People are signing up to that. They're happy to do that because they know when it's coming. But if they need something now, they'll pay for it. So you don't want to cripple your business.

Richard Hill:
Yeah, I think that's a really good message there. I think, so often, obviously, we have two agencies here, and we get asked, "What should we price the delivery at?" It is a question that we get asked. Obviously, that's not really our remit, but obviously, we have these discussions about all sorts of things. I think having those options in there, and obviously, they can't be excessive. But there's options where if you have a free option, obviously, work that into your price. Does that work for all your SKUs? Maybe it doesn't, maybe it does. But there's some trying to get that trade off between, and understanding your own sort of quantities. But then obviously, some places will be £3.99 next day, £2.99 next day, free delivery next day. What would your take be on this sort of free versus a fee? You got any sort of insight into what's best? And obviously, the customer always wants free, but obviously, if the price is already £5, well, you pay the £3.99. You got any sort of thought on that?

Nathan Kelleher:
I've got to be careful because some people watching this will say, "Hey, Nathan, you were the one promoting free delivery for all that time." At the time, it made sense. But yeah, look, there's no such thing as free delivery. Someone's paying for it. So it's either the carriers subsidizing their own costs to get it to somewhere where it can be charged as free, the retail is embedding it into their costs, or you're paying for it in some other way. And subscription service is a great thing to look at, but someone's going to pay for that delivery. And really, the price point of what you're selling is the key thing. If it's a £10 shirt that someone's buying, they're not going to pay £5 for a delivery. But if it's a two and a half thousand dollar piece of furniture or something, paying $5 or $50 for a white glove delivery is perfectly acceptable. People do that.

Nathan Kelleher:
But there is definitely a mental thing. And this is why we pushed it so hard, is there is a mental thing for free. People will pay more overall for free delivery, than I will for a product.

Richard Hill:
I think it's crazy how we're...

Nathan Kelleher:
And I do it.

Richard Hill:
We're brainwashed. We've all been brainwashed. "Free delivery. Hang on, it's twice the price."

Nathan Kelleher:
But the one thing that I do has, and this is kind of why I've changed over a period of time, is that getting to a free delivery normally means you compromise. And the compromise is normally on service. And worst thing you can do as a business is... Someone's very happy, they love you, they purchase from you. And then you mess up the delivery because you went to the cheapest possible option to try and save money on the delivery. To get that, you're going to lose a customer, it's going to cost a lot more. A really good way is to subsidize it, if you can, if you want to get to that point.

Nathan Kelleher:
Or once again, you just offer the options. You've got a free one, which you then realize you're taking a bit of a hit on, but your costs are lower. And then you have a Prime... I shouldn't use the word Prime, but a premium service that people pay extra for.

Nathan Kelleher:
And we ran a lot. We ran millions of transactions a month through our system with multiple carriers. And it was not always the cheapest. It was never that. It was the service that fit. And things like Locker deliveries and everything, it just added to the suite of options that people can have. That makes happy customers.

Richard Hill:
This is great. This is great, because the guys that are listening, should now be thinking, "okay." This goes back to those options, doesn't it? Having that variety of options. And I think it's the same in all areas. It goes the same as when you're thinking about what you're selling, right? We've got a thousand lines at £10. And well, hang on a minute, have you thought about... There are 5, 10, 15% of your customer want the £100 thing, or the £1,000 thing, or the £10,000 thing. And they always will. There will always be somebody that wants the premium or literally, the VIP experience. And price is not even on the radar. Of course, there's going to be a massive volume of people that want the free, the cheap. So you've got to have those elements there. But I think we'll talk about that more.

Richard Hill:
So, getting delivery right in an eCommerce store, how important is that, as a fundamental piece of your eCommerce puzzle? I'm thinking it's pretty damn important.

Nathan Kelleher:
Yeah, definitely. Well, look, if you're a retailer, like a bricks and mortar... Let's see if we can remember even going into one of those. It's been so long. A bricks and mortar retailer, the customer experience is normally when they walk in and the person is fronting. So that businesses spend a lot of time making sure that people are nicely dressed, they've got good rapport.

Nathan Kelleher:
You don't get that with the eCommerce. Your image is your website. Your brand is your personality. But the only physical contact I have is with that driver. So that's why it becomes so important that you get the right partner. And yeah, you can sit there and say this carrier's better than this, because it's like horses for courses. But if you get that right, it means that that customer has a good experience and they come back again. If you get that wrong, like if a driver can't be bothered and leaves it somewhere, and the parcel gets lost, and you don't fix that for them, you're going to lose that customer. And unlike a store where you see them upset and go to leave, you can stop them. You can't stop them on eCommerce because they're gone, and you can just have them on emails, and they'll block you. And suddenly, you've lost that relationship. And it's a very expensive lesson to learn, so yeah.

Richard Hill:
I'm just thinking about how busy are these career drivers now. It's just crazy, isn't it? They must be absolutely...

Nathan Kelleher:
Yeah. The numbers have gone off the charts. And in some way, like one of the things we've found, and certainly some people should appreciate... Because I've done delivery driving when we were... When you work in logistics companies, even when you're in management, you have to put on the vest and get out there and do it. It's a tough, tough gig, doing that. Firstly, people don't respect what you're doing. Secondly, you're dealing with the unknown. And every house you go to, "Is the person there? Are the not there?" I think one thing that's got easier is everyone's in the house, actually. So that's what it is.

Richard Hill:
Some of these people getting carded. I mean, it almost feels like there is somebody at our house every two hours. It's not that bad. It's not that bad. It's like we got our own courier. It's like, "Oh, hi. Are you all right? Yeah." It's like my mate. It's the guy I see, probably my new friend. It's like the guy that I see the most of now. It's a Amazon guy, or the guys that come around and drop stuff off.

Nathan Kelleher:
It's absolutely nuts. It's certainly been a challenge, but thankfully, the government saw fit to keep logistics running during this period, because I don't know what would have happened. People couldn't have survived. But I know all of the big retailers, eCommerce companies, that now have had a significant uptake in their volume this year. So they're all happy, in terms of price. But it's been a challenge.

Richard Hill:
Yeah. Thank you. Thank you. So I think the speed element we touched online, ordering at 10:00 in the evening and getting your products next day. I know quite a lot of the big high street retailers do a similar thing. And obviously, a lot of independents do as well. But any tips you could give to... You're an eCom store listening to this and you want to really extend the boundaries of how late you can take orders. Is there any sort of things you would recommend that they should know and things that they can implement in their business, or working with specific couriers and specific logistics partners that can offer that later, late element for next day?

Nathan Kelleher:
Yeah, for sure. So, certainly looking at the UK markets, one of the things, and as you can tell, from Australia originally, but one of the things coming to the UK was the prevalence of next day delivery. It's so common here. And UK is not a small place. It's a significantly larger population than Australia. But in Australia, you couldn't do next day deliveries from Sydney to Perth. It was literally impossible. It would've made VIP, thousand dollars.

Nathan Kelleher:
So seeing that in the UK, it's a good thing. I think it just, once again, comes down to the partner that you use. So even though everyone says they can deliver next day, there's a difference between turning up next day and actually delivering next day. Some take that very seriously. Others, a bit more lax with it.

Nathan Kelleher:
Also, the products that you're delivering comes back to what you're selling, as to who's the best partner for that. And I think the best way to ensure that you get the faster delivery is to sit down with whoever, when you're looking at partners, and give your brand strategy, give your strategy, and make sure it's a lot. And that's the best way to ensure fast delivery because it can get it out fast. It doesn't necessarily mean... Until it's in someone's hands and they're putting that t-shirt on, it's not a delivery yet. So yeah.

Richard Hill:
So good conversation with your logistics partner or your courier, depending on which end of the spectrum you're at, and to see how you can wear that.

Richard Hill:
So I guess that brings on quite nicely to, as I'd put it, that sort of profit centre within the business. So we touched on the fact that you've got that free delivery and then you've got the white glove, VIP experience, and it's maybe hundreds of pounds, potentially. So there's some scope there, commercially, in all the different areas. What would you say about trying to make it into a profit centre as a business? Is that possible?

Nathan Kelleher:
Yeah, it's funny because I got asked the other... We used to always talk about these sort of things. And I got asked the other day, and I said I'll just Google who's working on that at the moment. And the three companies, who had articles around being a profit centre in delivery, are all out of business. So I don't know if that's a good indication if it works or not. I'd say that's probably not the case. But yeah, look, if you look at say, third party logistics companies, a lot of their profits... They're the ones who can make a profit from delivery because it's economies of scale. You can get a price. And the more you put in, the price goes down. You can get economies of scale. And companies can leverage that, if you've got a good partner.

Nathan Kelleher:
As a business, but charging for profit on there. Unless you've got a product that you feel you're either unique. Like completely, no one else can do this, therefore, my price doesn't matter. Or you've got a huge margin there that you can cut down and make it look more attractive. You're just setting yourself up for people looking at and going, "That's really expensive for delivery." And they might be willing to spend £250, but they don't want to spend £5 for a delivery. If you're getting that for £1.50 and you're putting margin on that, it's not the best way to do it.

Nathan Kelleher:
I think the best way to approach the profit centre conversation is to look at, and factor the post-purchase experience. So if you actually deliver ideal post-purchase experience, people come back. It's best way to make more profit. If you have a bad experience and they leave, that's it. Yeah, they come back 10 more times because they love you. Then you got to make more money. That's how I look at it as a profit centre. Good delivery experience equals more profit. Yeah.

Richard Hill:
So it all comes back to this experience. But in reality, the whole process from website to checkout to, as you put it, [inaudible 00:26:49] for a t-shirt on your back, that whole experience with delivery, plays a huge part. Will they return that lifetime value of those 16 t-shirts I've just bought? It is where you sort of get that consistency and that loyalty. It sort of ties into a lot of other episodes we talked about. And that experience is absolutely key, I'm thinking.

Richard Hill:
I mean, demand at the moment for... Obviously, we work with a hundred plus stores, I would say. At any given time, we have a meeting every single day. We had a meeting this morning, and we have sort of the highlights of clients, what's happening. And it's just ridiculous, is the short version of how busy some companies are, the growth we've seen. And that's just very common.

Richard Hill:
If things just continue, continue, continue, is there not a point where sort of the courier networks and the logistics centres are going to snap, they're going to break? How much flex is left out there? Some reports have sort of... I've seen many, many businesses sort of four or five X their volumes in the last 12 months. So even if that's, say, doubling the eCommerce industry out there in 12 months, you still think about warehousing and vans and people and human aspect. At some point, it's going to be like, "We can't do next day delivery anymore, let alone we've got to do it." What do you think is going to happen there with this huge growth we've had?

Nathan Kelleher:
Yeah. Well, I guess Mr. Bezos called it a day last week. So hopefully, the standards start leveling out a bit. Because yeah, Amazon's definitely driven a lot of activity. I guess I look at it, it's like I'm just using a brand. And I'm shopping with Ocado, for example. Start of the pandemic, I felt like they were breaking. Suddenly, there was no delivery slots. There was nothing happening. And they took it. They turned it around really quickly. And if you look at their shares and different things like that, they're kind of through the roof. Their profits are nuts.

Richard Hill:
I'm kicking myself on Ocado. I think it was in MoneyWeek about April, I saw it as a tip. I was like, "Well, no." I didn't go for it.

Nathan Kelleher:
Yeah, exactly. And that's an example of astronomic thing, but their delivery and that deal with the delivery drivers every week when they're delivering. And they're all great. They go above and beyond, and they do a great job. So therefore, we'll keep on using, sort of thing.

Nathan Kelleher:
I think, from a carrier perspective, carriers have traditionally been very good at flexing at extraordinary times because you think like there's one or two months a year, but normally, 10 times the size of every other month. But what's sort of insane, this year, because of this, is that January was just as big as December, which has never happened. And everywhere, carriers that I'm speaking to, their volumes didn't drop. So now this is like a new normal, at the moment. And who knows how long it goes till it goes back, or if it goes back.

Nathan Kelleher:
The problem they run into is the capacity for people, and resources affects it. And this speaks to obviously, people who are starting logistics companies, that this is why it's important to get the right partner, not the biggest partner or the cheapest partner, because the cheapest doesn't mean you're not going to lose money. Because if the experience isn't there, you lose customers.

Nathan Kelleher:
But the ability for a carrier to be able to deal with your business as it is, and with the products you do, is so important. And as this continues to grow and they become stretched, if they've got a lot of large customers, they're going to look after them, you might get left behind. If they've got a lot of small customers, it can be overwhelming. And you're one of many. So you really got to work that.

Richard Hill:
Yeah. I guess that's good point, isn't it? I think there's so many things there, but they are also used to these December, January levels, if you like. But we're seeing obviously a new December. But then December is like every month now, in effect. And there's not a big up and down, is there? I guess. And there's no sign of it letting up, I don't think, from what we're seeing. Yeah. Yeah.

Richard Hill:
Okay. So thank you. That has been really useful, I think. It's given me a lot of things to think about with business of our clients, specifically. We always like to end every episode with a book recommendation. Have you got a book that you... It doesn't have to be on logistics. It can be on anything you like.

Nathan Kelleher:
Yeah. I'll do logistics. As you said, no one's ever done a logistics book on this podcast before, I'm sure. We'll run that one. But one book that I really did like, I think it's a good insight for people to understand their supply chain. One of the keys, when you start a business, you can rely on everyone else, but it's good to know where everything's sourced from and how it moves.

Nathan Kelleher:
And the book that I read recently was Ninety Percent of Everything. It is by Rose George. But the focus was on that full supply chain, end to end. And it really just gives you an idea of where things start, and how they end up on the ships or the planes, and start moving. And yeah, looking into it, it was a good insight, but it was also quite easy to read, which I think is good for people. But you're going to struggle beyond that. There's not a lot of intriguing logistics books out there. But obviously, the Amazon Free Stuff, or the Amazon Stories or something.

Richard Hill:
Yeah, absolutely. I'm placing an Amazon order in about 15 minutes.

Richard Hill:
Well, thank you, Nathan. It's been an absolute pleasure. Thank you so much for being on the show. So those guys that are listening in, they would like to find out more by yourself or more about what you do. What's the best place to reach out to you?

Nathan Kelleher:
Yeah, certainly, probably just our website at truealtitude.co.uk. And email, it's just nk@truealtitude.co.uk. Drop me an email if you've got any questions or want to engage in anything, but mostly just to talk logistics, hopefully.

Richard Hill:
Great. Great. Thank you. I'll see you again soon.

Richard Hill:
Thank you for listening to the eCom@One eCommerce podcast. If you enjoyed today's show, please hit subscribe, and don't forget to sign up to our eCommerce newsletter, and leave us a review on iTunes.

Richard Hill:
This podcast has been brought to you by our team here at eComOne, the eCommerce Marketing Agency.

Richard Hill:
Hi there. I'm Richard Hill, the host of eCom@One. Welcome to our 56th episode. In this episode, I speak with Nathan Kelleher, experienced eCommerce logistics pro, investor, and eCommerce entrepreneur.

Richard Hill:
I think this is a first at eCom@One, where we focus on logistics and delivery, something that is so important for all stores, and sort of our key to get right.

Richard Hill:
Myself and Nathan go into all things you should be asking your provider, to ensure they manage your future growth plans. We talk about Amazon, and how to compete with their delivery offers. We talk about free delivery, and Nathan's thoughts on how getting delivery right is so important for a store's success. And finally, you want to listen to Nathan's thoughts on making delivery a profit center, not a cost.

Richard Hill:
If you enjoy this episode, please make sure you subscribe, so you are always the first to know when a new episode is released. Now, let's head over to this fantastic episode.

Richard Hill:
How you doing, Nathan?

Nathan Kelleher:
Yeah, pretty good. Thanks, man. Thanks for having me on.

Richard Hill:
No problem at all. No problem.

Richard Hill:
So we've not actually done an episode around logistics and delivery, and this sort of... Obviously, it's a huge area for all eCommerce entrepreneurs and stores, whether you're starting out and deciding that sort of, "Right, what we're going to do?" Literally. We've got to deliver stuff, ultimately. And that's obviously a huge part of every eCom store and most businesses in this day and age. So how did you get into logistics and delivery, Nathan?

Nathan Kelleher:
Yeah, it was an unusual path. Actually, I originally was doing Sports Management, Sports Marketing at uni. So, that was where I was going to go. I've finished... And I'm showing my age here, but I finished at the time when the Sydney Olympics were kicking off, at the turn of the century. And an opportunity came up to work at the Olympics, which was amazing for me. I was in logistics. So logistics was something that's like a new world I didn't know much about. And that was literally the boiling pot, the biggest event on the planet.

Nathan Kelleher:
So got into there, and then post that, which was really enjoyable. Logistics kind of made sense. And eCommerce was blossoming, so I got into eCommerce. And yeah, I saw logistics as a way to sort of take me around the world. I hadn't traveled a lot. So the last 20 years, logistics has taken me every corner of the globe. So I'm very happy about that.

Richard Hill:
So it was more of a "get some free travel out of it". Maybe it was the first.

Nathan Kelleher:
That was definitely something.

Richard Hill:
I could see that as a definite draw. I'd be there as well, I think. Yeah. I've got a friend of mine that actually worked for Amazon for many years. And he was moving around sort of various logistics centers, and setting them up and whatnot.

Nathan Kelleher:
Yeah, I clocked a lot of miles over the years, doing that. So yeah, it definitely was the right choice.

Richard Hill:
So, when we talk about logistics... Obviously, the guys that are listening into the episode, they've got their store, or thinking of launching a store, or they're doing a hundred million already. Where would you start? When you're thinking about logistics, who to, sort of, partner with? What are some of the things you need to be thinking through before you start?

Nathan Kelleher:
Yeah, certainly. So I think one of the key things that people... And you mentioned, logistics, you hadn't had on yet. And see now, often people leave the logistics to the end. It probably should be the first, but I might be biased. But looking at logistics strategy, it needs to be fit to purpose. So one of the keys things to consider is depending what product or what service you're offering, where you're going to manufacture. Obviously, if people are manufacturing in Asia, it's got different challenges to U.S. or Europe. And as we've seen with Brexit, in the last 12 months, even your own backyard can be awfully difficult. So you need to look at things like warehousing. That's a big part of logistics strategy. Where are you going to house things? Where is your product's going to sit?

Nathan Kelleher:
And probably the one that's forgotten about, but becomes very relevant, is the customer experience aspect. So it doesn't matter how good you do if your customers aren't happy. Yeah, logistics is likely to be a strangle point, where it's going to break down.

Richard Hill:
This experience, it's a touch point with your client. And if they've been on the website, they've ordered the thing, the customer has. And then, they're waiting for that thing. That's like a hottest part of that brand, experience is. If it's just thrown in the corner, I guess that's a bit of a problem. Yeah. And there's a lot of things you can do there. Yeah.

Nathan Kelleher:
Exactly. And you can have the best branding, you can have the number one Instagram store, you can do everything that's well. But if that product doesn't end up in their hands, then that's a bad experience. And yeah, they do, they're talking with their feet, so you're going to lose a customer.

Richard Hill:
So I guess logistics is where, sort of, got our store. I guess there's all different people listening to the podcast. And so when we talk about logistics, we obviously got the delivery element. We're delivering a product, whether that's this big or three pallets worth of stuff. Or in some instances, and then a lot more instances now, your logistics is very much you're housing pallets of product for those clients. So, it's two quite different things, what you're doing, sort of.

Richard Hill:
I've got a friend of mine, used to have a business where he had about 2,000 pallet warehouse. And firms would pay a fee. Then, there'd be charge for every pallet that came in, and there'd be charge for every SKU that went out the door.

Richard Hill:
So, there's sort of two sides there, quite different. Obviously, if you're housing everything yourself, it's more so, I guess that's more like a... Well, our term is like a courier type service.

Nathan Kelleher:
Yeah. So there's different ways you can approach that. So you can do it all yourself. And most companies when they're starting out, and I'm sure a lot of people listening to this, they're just starting a company, you will find you'll do it all yourself. Because you've got the orders, and it's the best way to learn your product and to learn what's going to happen. But pretty quickly, that either gets old very quick, or if you're very successful, gets very difficult to continue.

Nathan Kelleher:
So then you've got to start looking at who's going to have as much love for my brand as I do. And that is a big moment, that first time that you give to someone else to go and do that. And there's a lot of good providers out there, but once again, they got to be fit to your purpose. And just because they're good at fashion doesn't mean they're going to be really good at your drinks brand, for example.

Richard Hill:
It's quite a thing, isn't it? So you built a business to a point you're doing well, but then you're hitting that tipping point, where it's better to let somebody else take care of that. What would you say to the guys that are listening, that are maybe at that point or stepping up into that point? What sort of questions should they be asking their provider? What sort of things should they be, for potential provider? Should they be looking out for, like you said, obviously, how they handle particular product? What sort of things should they be looking out for, really, specifically? Because it is quite a big thing, isn't it? You built your baby, from one order a day to whatever the number is, thousand orders a day. And then it's like, "Do you know what? We need somebody else to take care of this." You understand? Big step.

Nathan Kelleher:
Yeah, it's massive. I've dealt with, in my previous roles, we were dealing a lot with eCommerce startups, in terms of them launching businesses. And what we found is that they didn't want to give that up. They didn't want to give up the logistics, and they were wanting to keep it, micromanage that. And you get to a point where you start to stop trying to get new business because you can't do what you've got. And when you get to that point, it's kind of counterproductive. So, thinking of growth of business, you've got to do that.

Nathan Kelleher:
So I guess the primary thing, when you're looking at a third party provider, is looking that they fit your brand. So I use an example there, is that if you've got a 3PL provider that works in pallets, and as you mentioned, they've got thousands of pallets. They're not going to be very good at wrapping up trinkets or fashion brands and stuff like that, necessarily. But then flip that, and now if you've got large pallets, the last thing you want is someone who's using manual, running around manually, doing stuff in a warehouse, because they're not going to be able to fulfill the needs. I think that's probably one thing.

Nathan Kelleher:
The second thing is once you're not controlling the experience, you've got to control when stuff goes out. So if your experience is for your customers, that they're loving, is that they order and you're packing it up that night till midnight, and then sending it the following morning, and they're getting it. That's one experience. You might not get that with a third party. So you've really got to talk to them about that. And make sure that you don't drop off a cliff because customers drop off with it. And it's tough when your customers go.

Richard Hill:
I think there's some great points there, isn't there? I've been sort of thinking back because I used to have served 25,000 square feet in this that. There were about 1,500 lines, maybe 1,400 lines. Yeah, some of them were as big as... There were things like that, that were a thousand pounds. There'd be stuff this big, which was £40, and every variation of that. So making sure that they're able to deal with your size of products and your value of product. I guess, it's that insurance element or that value element. If it's just sort of lower end pallets and big volume, that's one type of logistics centre. But if it's trinkets, and they've got watches that are obviously very high value and small, right? When you sell PCs and computers, so you can have a pallet that was half million quid. It was quite -

Nathan Kelleher:
Yeah, exactly. And then you got to look at the provider to make sure that they're delivering it properly. Because if you're sending out expensive computer equipment, and they're a haphazard carrier, they're about throwing things in the van rather than white glove service, you end up with a lot of breakages and returns. So there's all those factors.

Richard Hill:
White gloves are the one, isn't it? It's quite nice when you see that on a website when you're buying at certain value, pieces of furniture. I used to also sell TV stands, actually. This is like... I'm going way back. This is about 14 years ago. TV stands, TV brackets. We offered a white glove service back then, for certain TV stands that were, I think, it was like £800. Reasonable value, not massive.

Richard Hill:
But yeah, so getting that fit and obviously, making sure that experience... They obviously have an amazing experience on the website, but then what's the experience like afterwards, is absolutely key.

Richard Hill:
I want to go and visit, is that quite normal? I want to go and visit...

Nathan Kelleher:
A hundred percent. Look, it's difficult at the moment. I hate to be starting an eCommerce business right now. Just last year, we got caught up because of our logistics experiences in the whole PPE, global wars of moving material around. And there's so many shonky people getting involved in logistics, who have no logistics experience. And so, just trying to get a business set up, we've been [inaudible 00:11:38], see how they operate. People have been doing that a long time overseas, but now you literally, down the road, you can't deal with it. So COVID's brought its own challenges, definitely.

Richard Hill:
Yeah, hasn't it? I guess. But in the same respect, it's brought massive opportunities for, I would say, the majority of eCommerce stores, as we found over the last sort of 12 months nearly.

Richard Hill:
I don't think we can do an episode on logistics and delivery without talking about Amazon, I'm afraid.

Nathan Kelleher:
Yeah, that's fine.

Richard Hill:
So obviously, they seem to have got you down, in reality, in terms of obviously, in a lot of areas. It goes without saying, delivery pace, specifically, you pay your Prime or not. You pay your Prime, quite often, I think it's up until 10:00 that day. And the next thing you know, it's here in the morning. Do you think that independent eCommerce stores can compete with that, and moving forward, can keep up with them on their sort of delivery offer?

Nathan Kelleher:
Yeah, look, effectively, you can kind of match what Amazon does now. The problem is the costs. The cost on doing that is ridiculous. You look at Amazon, three or four years ago, I think they were spending about $10 billion or investing $10 billion into their logistics, and just taking it as a loss. They had other passive business to subsidize it. That experience became the standard. And I can tell you that working in our old business, Temando, that we were dealing with retailers. And retailers were like, "I want that experience. I want that free delivery, same day, next day sort of delivery." And then when you went through the pricing, they were like, "Oh, we can't support that." And we were like, "No, you can't."

Nathan Kelleher:
Amazon changed a lot. They've put all their DCs closer. Certainly, you look at the U.S., DCs are close, which means you can now do free delivery. And Prime is an example there, with a subscription service and the such, which I'm sure we'll get into. But one of the things is for retailers to match that service, you potentially are going to put yourself out of business. And we've seen a lot of companies deal with paying.

Nathan Kelleher:
I know everyone loves it, and everyone says they love that sort of level of service. But I think next day is fine. I think the kind of thing you've got to think about as a business is, "Can I give them options?" If a customer wants it same day, they'll pay for it. If they want it next day for free, then I'll pick that option. And your customer service goes down, in terms of inquiries. Because if you're the one picking it for them, and it goes wrong, it's kind of blow back on you. And if you give people options, and the option they pick is going to deliver in two days or three days, so be it.

Nathan Kelleher:
And there's a lot of big businesses, that are working on wholesale, that are delivering products to people two, three weeks later, out of China. People are signing up to that. They're happy to do that because they know when it's coming. But if they need something now, they'll pay for it. So you don't want to cripple your business.

Richard Hill:
Yeah, I think that's a really good message there. I think, so often, obviously, we have two agencies here, and we get asked, "What should we price the delivery at?" It is a question that we get asked. Obviously, that's not really our remit, but obviously, we have these discussions about all sorts of things. I think having those options in there, and obviously, they can't be excessive. But there's options where if you have a free option, obviously, work that into your price. Does that work for all your SKUs? Maybe it doesn't, maybe it does. But there's some trying to get that trade off between, and understanding your own sort of quantities. But then obviously, some places will be £3.99 next day, £2.99 next day, free delivery next day. What would your take be on this sort of free versus a fee? You got any sort of insight into what's best? And obviously, the customer always wants free, but obviously, if the price is already £5, well, you pay the £3.99. You got any sort of thought on that?

Nathan Kelleher:
I've got to be careful because some people watching this will say, "Hey, Nathan, you were the one promoting free delivery for all that time." At the time, it made sense. But yeah, look, there's no such thing as free delivery. Someone's paying for it. So it's either the carriers subsidizing their own costs to get it to somewhere where it can be charged as free, the retail is embedding it into their costs, or you're paying for it in some other way. And subscription service is a great thing to look at, but someone's going to pay for that delivery. And really, the price point of what you're selling is the key thing. If it's a £10 shirt that someone's buying, they're not going to pay £5 for a delivery. But if it's a two and a half thousand dollar piece of furniture or something, paying $5 or $50 for a white glove delivery is perfectly acceptable. People do that.

Nathan Kelleher:
But there is definitely a mental thing. And this is why we pushed it so hard, is there is a mental thing for free. People will pay more overall for free delivery, than I will for a product.

Richard Hill:
I think it's crazy how we're...

Nathan Kelleher:
And I do it.

Richard Hill:
We're brainwashed. We've all been brainwashed. "Free delivery. Hang on, it's twice the price."

Nathan Kelleher:
But the one thing that I do has, and this is kind of why I've changed over a period of time, is that getting to a free delivery normally means you compromise. And the compromise is normally on service. And worst thing you can do as a business is... Someone's very happy, they love you, they purchase from you. And then you mess up the delivery because you went to the cheapest possible option to try and save money on the delivery. To get that, you're going to lose a customer, it's going to cost a lot more. A really good way is to subsidize it, if you can, if you want to get to that point.

Nathan Kelleher:
Or once again, you just offer the options. You've got a free one, which you then realize you're taking a bit of a hit on, but your costs are lower. And then you have a Prime... I shouldn't use the word Prime, but a premium service that people pay extra for.

Nathan Kelleher:
And we ran a lot. We ran millions of transactions a month through our system with multiple carriers. And it was not always the cheapest. It was never that. It was the service that fit. And things like Locker deliveries and everything, it just added to the suite of options that people can have. That makes happy customers.

Richard Hill:
This is great. This is great, because the guys that are listening, should now be thinking, "okay." This goes back to those options, doesn't it? Having that variety of options. And I think it's the same in all areas. It goes the same as when you're thinking about what you're selling, right? We've got a thousand lines at £10. And well, hang on a minute, have you thought about... There are 5, 10, 15% of your customer want the £100 thing, or the £1,000 thing, or the £10,000 thing. And they always will. There will always be somebody that wants the premium or literally, the VIP experience. And price is not even on the radar. Of course, there's going to be a massive volume of people that want the free, the cheap. So you've got to have those elements there. But I think we'll talk about that more.

Richard Hill:
So, getting delivery right in an eCommerce store, how important is that, as a fundamental piece of your eCommerce puzzle? I'm thinking it's pretty damn important.

Nathan Kelleher:
Yeah, definitely. Well, look, if you're a retailer, like a bricks and mortar... Let's see if we can remember even going into one of those. It's been so long. A bricks and mortar retailer, the customer experience is normally when they walk in and the person is fronting. So that businesses spend a lot of time making sure that people are nicely dressed, they've got good rapport.

Nathan Kelleher:
You don't get that with the eCommerce. Your image is your website. Your brand is your personality. But the only physical contact I have is with that driver. So that's why it becomes so important that you get the right partner. And yeah, you can sit there and say this carrier's better than this, because it's like horses for courses. But if you get that right, it means that that customer has a good experience and they come back again. If you get that wrong, like if a driver can't be bothered and leaves it somewhere, and the parcel gets lost, and you don't fix that for them, you're going to lose that customer. And unlike a store where you see them upset and go to leave, you can stop them. You can't stop them on eCommerce because they're gone, and you can just have them on emails, and they'll block you. And suddenly, you've lost that relationship. And it's a very expensive lesson to learn, so yeah.

Richard Hill:
I'm just thinking about how busy are these career drivers now. It's just crazy, isn't it? They must be absolutely...

Nathan Kelleher:
Yeah. The numbers have gone off the charts. And in some way, like one of the things we've found, and certainly some people should appreciate... Because I've done delivery driving when we were... When you work in logistics companies, even when you're in management, you have to put on the vest and get out there and do it. It's a tough, tough gig, doing that. Firstly, people don't respect what you're doing. Secondly, you're dealing with the unknown. And every house you go to, "Is the person there? Are the not there?" I think one thing that's got easier is everyone's in the house, actually. So that's what it is.

Richard Hill:
Some of these people getting carded. I mean, it almost feels like there is somebody at our house every two hours. It's not that bad. It's not that bad. It's like we got our own courier. It's like, "Oh, hi. Are you all right? Yeah." It's like my mate. It's the guy I see, probably my new friend. It's like the guy that I see the most of now. It's a Amazon guy, or the guys that come around and drop stuff off.

Nathan Kelleher:
It's absolutely nuts. It's certainly been a challenge, but thankfully, the government saw fit to keep logistics running during this period, because I don't know what would have happened. People couldn't have survived. But I know all of the big retailers, eCommerce companies, that now have had a significant uptake in their volume this year. So they're all happy, in terms of price. But it's been a challenge.

Richard Hill:
Yeah. Thank you. Thank you. So I think the speed element we touched online, ordering at 10:00 in the evening and getting your products next day. I know quite a lot of the big high street retailers do a similar thing. And obviously, a lot of independents do as well. But any tips you could give to... You're an eCom store listening to this and you want to really extend the boundaries of how late you can take orders. Is there any sort of things you would recommend that they should know and things that they can implement in their business, or working with specific couriers and specific logistics partners that can offer that later, late element for next day?

Nathan Kelleher:
Yeah, for sure. So, certainly looking at the UK markets, one of the things, and as you can tell, from Australia originally, but one of the things coming to the UK was the prevalence of next day delivery. It's so common here. And UK is not a small place. It's a significantly larger population than Australia. But in Australia, you couldn't do next day deliveries from Sydney to Perth. It was literally impossible. It would've made VIP, thousand dollars.

Nathan Kelleher:
So seeing that in the UK, it's a good thing. I think it just, once again, comes down to the partner that you use. So even though everyone says they can deliver next day, there's a difference between turning up next day and actually delivering next day. Some take that very seriously. Others, a bit more lax with it.

Nathan Kelleher:
Also, the products that you're delivering comes back to what you're selling, as to who's the best partner for that. And I think the best way to ensure that you get the faster delivery is to sit down with whoever, when you're looking at partners, and give your brand strategy, give your strategy, and make sure it's a lot. And that's the best way to ensure fast delivery because it can get it out fast. It doesn't necessarily mean... Until it's in someone's hands and they're putting that t-shirt on, it's not a delivery yet. So yeah.

Richard Hill:
So good conversation with your logistics partner or your courier, depending on which end of the spectrum you're at, and to see how you can wear that.

Richard Hill:
So I guess that brings on quite nicely to, as I'd put it, that sort of profit centre within the business. So we touched on the fact that you've got that free delivery and then you've got the white glove, VIP experience, and it's maybe hundreds of pounds, potentially. So there's some scope there, commercially, in all the different areas. What would you say about trying to make it into a profit centre as a business? Is that possible?

Nathan Kelleher:
Yeah, it's funny because I got asked the other... We used to always talk about these sort of things. And I got asked the other day, and I said I'll just Google who's working on that at the moment. And the three companies, who had articles around being a profit centre in delivery, are all out of business. So I don't know if that's a good indication if it works or not. I'd say that's probably not the case. But yeah, look, if you look at say, third party logistics companies, a lot of their profits... They're the ones who can make a profit from delivery because it's economies of scale. You can get a price. And the more you put in, the price goes down. You can get economies of scale. And companies can leverage that, if you've got a good partner.

Nathan Kelleher:
As a business, but charging for profit on there. Unless you've got a product that you feel you're either unique. Like completely, no one else can do this, therefore, my price doesn't matter. Or you've got a huge margin there that you can cut down and make it look more attractive. You're just setting yourself up for people looking at and going, "That's really expensive for delivery." And they might be willing to spend £250, but they don't want to spend £5 for a delivery. If you're getting that for £1.50 and you're putting margin on that, it's not the best way to do it.

Nathan Kelleher:
I think the best way to approach the profit centre conversation is to look at, and factor the post-purchase experience. So if you actually deliver ideal post-purchase experience, people come back. It's best way to make more profit. If you have a bad experience and they leave, that's it. Yeah, they come back 10 more times because they love you. Then you got to make more money. That's how I look at it as a profit centre. Good delivery experience equals more profit. Yeah.

Richard Hill:
So it all comes back to this experience. But in reality, the whole process from website to checkout to, as you put it, [inaudible 00:26:49] for a t-shirt on your back, that whole experience with delivery, plays a huge part. Will they return that lifetime value of those 16 t-shirts I've just bought? It is where you sort of get that consistency and that loyalty. It sort of ties into a lot of other episodes we talked about. And that experience is absolutely key, I'm thinking.

Richard Hill:
I mean, demand at the moment for... Obviously, we work with a hundred plus stores, I would say. At any given time, we have a meeting every single day. We had a meeting this morning, and we have sort of the highlights of clients, what's happening. And it's just ridiculous, is the short version of how busy some companies are, the growth we've seen. And that's just very common.

Richard Hill:
If things just continue, continue, continue, is there not a point where sort of the courier networks and the logistics centres are going to snap, they're going to break? How much flex is left out there? Some reports have sort of... I've seen many, many businesses sort of four or five X their volumes in the last 12 months. So even if that's, say, doubling the eCommerce industry out there in 12 months, you still think about warehousing and vans and people and human aspect. At some point, it's going to be like, "We can't do next day delivery anymore, let alone we've got to do it." What do you think is going to happen there with this huge growth we've had?

Nathan Kelleher:
Yeah. Well, I guess Mr. Bezos called it a day last week. So hopefully, the standards start leveling out a bit. Because yeah, Amazon's definitely driven a lot of activity. I guess I look at it, it's like I'm just using a brand. And I'm shopping with Ocado, for example. Start of the pandemic, I felt like they were breaking. Suddenly, there was no delivery slots. There was nothing happening. And they took it. They turned it around really quickly. And if you look at their shares and different things like that, they're kind of through the roof. Their profits are nuts.

Richard Hill:
I'm kicking myself on Ocado. I think it was in MoneyWeek about April, I saw it as a tip. I was like, "Well, no." I didn't go for it.

Nathan Kelleher:
Yeah, exactly. And that's an example of astronomic thing, but their delivery and that deal with the delivery drivers every week when they're delivering. And they're all great. They go above and beyond, and they do a great job. So therefore, we'll keep on using, sort of thing.

Nathan Kelleher:
I think, from a carrier perspective, carriers have traditionally been very good at flexing at extraordinary times because you think like there's one or two months a year, but normally, 10 times the size of every other month. But what's sort of insane, this year, because of this, is that January was just as big as December, which has never happened. And everywhere, carriers that I'm speaking to, their volumes didn't drop. So now this is like a new normal, at the moment. And who knows how long it goes till it goes back, or if it goes back.

Nathan Kelleher:
The problem they run into is the capacity for people, and resources affects it. And this speaks to obviously, people who are starting logistics companies, that this is why it's important to get the right partner, not the biggest partner or the cheapest partner, because the cheapest doesn't mean you're not going to lose money. Because if the experience isn't there, you lose customers.

Nathan Kelleher:
But the ability for a carrier to be able to deal with your business as it is, and with the products you do, is so important. And as this continues to grow and they become stretched, if they've got a lot of large customers, they're going to look after them, you might get left behind. If they've got a lot of small customers, it can be overwhelming. And you're one of many. So you really got to work that.

Richard Hill:
Yeah. I guess that's good point, isn't it? I think there's so many things there, but they are also used to these December, January levels, if you like. But we're seeing obviously a new December. But then December is like every month now, in effect. And there's not a big up and down, is there? I guess. And there's no sign of it letting up, I don't think, from what we're seeing. Yeah. Yeah.

Richard Hill:
Okay. So thank you. That has been really useful, I think. It's given me a lot of things to think about with business of our clients, specifically. We always like to end every episode with a book recommendation. Have you got a book that you... It doesn't have to be on logistics. It can be on anything you like.

Nathan Kelleher:
Yeah. I'll do logistics. As you said, no one's ever done a logistics book on this podcast before, I'm sure. We'll run that one. But one book that I really did like, I think it's a good insight for people to understand their supply chain. One of the keys, when you start a business, you can rely on everyone else, but it's good to know where everything's sourced from and how it moves.

Nathan Kelleher:
And the book that I read recently was Ninety Percent of Everything. It is by Rose George. But the focus was on that full supply chain, end to end. And it really just gives you an idea of where things start, and how they end up on the ships or the planes, and start moving. And yeah, looking into it, it was a good insight, but it was also quite easy to read, which I think is good for people. But you're going to struggle beyond that. There's not a lot of intriguing logistics books out there. But obviously, the Amazon Free Stuff, or the Amazon Stories or something.

Richard Hill:
Yeah, absolutely. I'm placing an Amazon order in about 15 minutes.

Richard Hill:
Well, thank you, Nathan. It's been an absolute pleasure. Thank you so much for being on the show. So those guys that are listening in, they would like to find out more by yourself or more about what you do. What's the best place to reach out to you?

Nathan Kelleher:
Yeah, certainly, probably just our website at truealtitude.co.uk. And email, it's just nk@truealtitude.co.uk. Drop me an email if you've got any questions or want to engage in anything, but mostly just to talk logistics, hopefully.

Richard Hill:
Great. Great. Thank you. I'll see you again soon.

Richard Hill:
Thank you for listening to the eCom@One eCommerce podcast. If you enjoyed today's show, please hit subscribe, and don't forget to sign up to our eCommerce newsletter, and leave us a review on iTunes.

Richard Hill:
This podcast has been brought to you by our team here at eComOne, the eCommerce Marketing Agency.

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