Matt Burke is the National Account Manager at ColdTrack, a tech-enabled third-party fulfillment platform for B2C and B2B e-commerce businesses. As a warehousing and operations professional, Matt is skilled in helping direct-to-consumer businesses thrive. He started his career in the direct-to-consumer business five years ago, quickly scaling the company he worked for from five employees to 200-plus.
Here’s a glimpse of what you’ll learn:
How Matt Burke entered the warehousing and logistics industry
Matt talks about the value of developing efficient organizational systems and his strategic business practices
The benefits of third-party warehousing
How the pandemic impacted demand for warehousing
How to drive traction and differentiate your business from the competition
Matt talks about his ideal clients and his tips for great packaging
How ColdTrack's pick-to-light process works
Matt's favorite apps
In this episode…
As you scale your business and grow your customer base, your warehousing and storage needs also increase. To meet the changing customer needs and provide the best services, it’s essential to revamp your warehousing solutions.
Many large corporations prefer outsourcing their warehousing solutions, especially from the food industry. Third-party warehousing and logistics help companies focus on their core business goals and objectives. They increase efficiency and help reduce costs in the long term. So what should businesses know about working with a 3PL company? How can you find the right business partner?
In this episode of The Tao of Pizza Podcast, Mark Hiddleson is joined by Matt Burke, the National Account Manager at ColdTrack, to talk about the value of third-party warehousing solutions. They also discuss tips for maximizing warehouse floor space, how the pandemic impacted demand for warehousing, and Matt's tips for building a differentiated brand.
Resources mentioned in this episode:
Specialized Storage Solutions, Inc. contact phone: 707-732-3892
Mark Hiddleson's email: email@example.com
Matt Burke's email address: firstname.lastname@example.org
"Transitioning From the Advertising Industry to the Warehousing and Logistics Industry"
Sponsor for this episode...
This episode is brought to you by Specialized Storage Solutions Inc.
I have been in the logistics and storage industry for several decades. I know I don’t look that old, but it's true.
We provide industry-leading warehouse storage solutions nationwide.
So basically, if you have a warehouse that needs Rack, Shelving, Carts, Conveyors, or Mezzanines, we help with....design engineering, installations, inspections, and repairs to help clients optimize their logistics operations.
Sometimes people don’t even realize that we can actually help with permit acquisition services.
We take a holistic look at your entire business supply chain ecosystem to develop the resources for continually improving your operation.
To learn more, visit specialracks.com or give us a call at (707) 732-3892. One of the best ways to learn more about our products and services is to follow us on Instagram. And there’s a link on our website to do that.
I will even give you my personal email address for podcast listeners, so email me at email@example.com if you’re ready to take your warehouse storage and retrieval systems to the next level.
Welcome to The Tao of Pizza, where we feature top logistics leaders, entrepreneurs and supply chain innovators and share their inspiring stories with a holistic twist.
Mark Hiddleson 0:17
Mark Hiddleson here, host of The Tao of Pizza Podcast where I interview the logistics industry, top professionals in warehousing logistics and supply chain business with a holistic twist. This episode is brought to you by Specialized Storage Solutions. Hey listen, I've been in the logistics and storage industry for several decades. And I know I don't look that old, but it's true. We provide industry-leading warehouse storage solutions nationwide. So basically, we have a warehouse that needs rack shelving carts, conveyors, or mezzanines, we help with the design, engineering installation inspections and repairs to help clients optimize their logistics operations. You know, Matt, sometimes people don't even realize that we actually helped with the permanent acquisition services with a holistically. Yeah, you can imagine that we take a holistic look at your entire business supply chain and help you continue to improve your operations. So to learn more, visit specialracks.com, or give us a call at 707-732-3892. I even give my personal email out to podcast listeners. So email me at firstname.lastname@example.org. So today, we have Matt Burke. He started in the direct-to-consumer perishable fulfillment business five years ago. And he quickly scaled the business from five employees to 200 employees shipping approximately 50,000 orders a week. Now they're looking to optimize regional carriers to deliver orders in less than one day to the end consumer. Matt is an exceptional warehousing and operations professional with specialized skills in helping direct-to-consumer businesses thrive in their fulfillment capacities. And service. Matt, welcome to The Tao of Pizza.
Matt Burke 2:09
Thank you for having me, Mark. Pleasure to be here.
Mark Hiddleson 2:12
Yeah, I love your background layer, it kind of looks I know it's not your building to the kind of looks like you're building with the bricks in the in the background.
Matt Burke 2:19
You know, it kinda it kinda works. It's definitely not my building, because this is more upright. But it gives a good background.
Mark Hiddleson 2:30
So I've been looking forward to this, I gotta give a huge shout out to Murphy. I was thinking about before this interview, it's how did we I was thinking like, how do I meet the guest and I was introduced by Chris Murphy is one of the most awesome third party logistics guys, rock star musician, friend, business colleague, and it's really cool. A lot of the people he's introduced me to a really cool people. Like you're one of them. So
Matt Burke 2:59
he does have Murphy, he has, he's got a group of friends in the industry. He He's always meeting people in between sets and drinks. You can always find him somewhere near the front of the show. Good, good guy to be connected with in the industry for sure.
Mark Hiddleson 3:17
Yeah, and he's just constantly always on the move learning stuff. I mean, he and I we started together and Warehouse Education and Research Council, they were always bird dogging the latest thing that was RFID. Or like you when you went with us we were researching picked a light for for and I'm gonna ask you something about that. But I want to ask you, how did you get into this business? It was kind of a unique business. And you know, the third party warehousing or direct consumer fulfillment? How did you?
Matt Burke 3:46
How did you so my logistics career started at Golden State foods actually. So I was a continuous improvement analysts they're measuring warehouse square footage, pic, back optimization, all that kind of fun stuff, just trying to get as much out of the buildings as possible. So that was kind of my background, I had the opportunity to come up and work with CR Pacific warehouse group. And we had a customer gap open up in our Stockton campus. It was just six months or so after I kind of got going I got started. And we had a hole to fill like a physical room opened up and we didn't know what we're gonna do with it. So we had a little program, a little direct consumer program going on down at Patterson, which is another facility that the Sierra Pacific group manages large building. And the direct consumer at that time was really small. It was one account called Daily harvest. If anybody knows the direct consumer industry, they're one of the largest ones. Sierra Pacific actually shipped their very first box on the West Coast. Back then, the bill the business didn't really mesh with the bill. thing that it was in. So we looked at the opportunity said, Okay, well, the Patterson group doesn't need this kind of a kind of in a weird location in the in the warehouse, let's move it up to the Stockton campus. And you know, really try to turn this into a solid business model. Move it up there, lo and behold, just dumb Irish luck. Stockton is a really solid distribution center for the entire west coast, not just for California. But for perishable and partial fulfillment. You can cover basically 70 million people in 48 hours or less, all the way from Seattle, to Vegas, Phoenix, down to San Diego, everything is one or two day ground, which is extremely an extremely important cost metric for all the direct consumer brands. So we got to got lucky, we had an opening and a location that was great. And then we quickly realized that as the business grew and scaled, and this was kind of in the Goldilocks era of the directors who were kind of right at the start, quickly realized that the stock to labor market, basically addressed all our needs. Very hardworking, very blue collar, got lucky with a couple of great employees that were just tamps all of a sudden turn into great supervisors. And from there, we just captured a couple of really great brands went from 500 boxes a week to 2500 boxes a week to 10,000 20,000, all of a sudden, a pandemic happened. And we went to 50,000. Like over, over like a long weekend. It was a pretty, pretty wild run.
Mark Hiddleson 6:38
Yeah. So to say a little bit of I mean, five to 200. Just seems like I mean, it's two difference night and day. What were the early days, like, I mean, going from five to 200, there obviously had to be steps. What were those early days, I remember show one time, I was like, Wow, this parking lots full used to be two cars.
Matt Burke 6:59
So direct consumer fulfillment follows. Internet Marketing Trends, right. So it it moves closer to a SaaS offering than it does to like a standard CPG food model, right? So when the Instagram or Facebook ads hit, they hit very fast, and they hit very hard, right? So you're you double in those are those early days, when you kind of catch lightning in a bottle, you start to double very, very fast, right? You'll go to 100 200 to 500. And it just kind of starts to snowball. So during those beginning days, where I was the fifth employee, I am I'm constantly taking customer calls, prospective customer calls, calling, calling on potential customers, all while doing all the dry ice add, shrink wrapping of the pallets and doing all that stuff. So I was I was the fifth warehouse person and basically only manager up out there on site. So you couldn't, you couldn't afford to not wear a bunch of hats. Right? So in those early days, you're doing a bit of everything. You're the vacation backfill, right? I didn't know how to process labels, deplete the inventory, manage the schedule, do everything all at one time, while being worried about top line revenue. The most important was in the 10 hour, you strategically planned
Mark Hiddleson 8:28
out the racking projects, which
Matt Burke 8:32
are most importantly, most important, that are racking. Thanks to thanks to you. And Murphy on that original design of the rollers. It really ended up being at the boater, like behind those early days, right, because all of a sudden, you weren't picking off the floor. Right? Who by no means were we Star Trek warehouse, right. You know, there was nothing, no lasers. But it was just above prehistoric. But it was really, really efficient. And it was really easy to add new people, which really allowed us to scale. It was a simple repeatable model, where you can take somebody in, get them started at eight o'clock in the morning, by nine o'clock they can actually picking up the line helping contribute. That was extremely valuable piece.
Mark Hiddleson 9:22
So when everything was organized, like you know, three hi and four across every day we had it's different, like if pallets were just spread out. It kind of It's a disaster, everything was you had
Matt Burke 9:32
to know where everything was it kind of operate like an Easter egg hunt. Those are never efficient, right? And then you always tend to have to have a PhD to try to pick at our location, right? There's not a whole lot of those running around trying to find out where the jobs. So when we built a model that was repeatable, anybody could come in and effectively start to work right away. It also helped us identify who's going to be a good performer or not, right because it became so simple If you would know,
Mark Hiddleson 10:02
these metrics, they go look, you should be able to pull 600 cases an hour or whatever,
Matt Burke 10:05
yeah, you'll be able to get go and get started, you'll be able to see very quickly is this person going to match up or not? Right. And it's, you know, you don't want to waste either groups time through that process. So it allowed us to get everybody in into the functioning model very fast, which allowed us to scale.
Mark Hiddleson 10:25
So you are, I love having him here, because you're an ideal client, because you use us in the right way. Like, you can,
Matt Burke 10:34
well, you always you always save 1000 pallet positions for me. So I, I agree.
Mark Hiddleson 10:40
So you, you do some things that are that are just more business like you get. I don't do this with all my clients, but like, I give you ballparks because you know, if you're planning a project, or you have some new coming in, or you know, their volumes are gonna go up. You like, you're a good strategic partner is what I call it. So where did you learn that? Where did you learn that? It really is a skill to kind of use us. You know, we can do drawings, we don't do a drawing every single time. But you ask questions like how many public generals and then we narrow down? And then when we need that stuff, you're like, Okay, do a drawing for this.
Matt Burke 11:12
Cool? Yes. So the start of the of that understanding, come back from the continuous improvement background, right, where you're constantly analyzing the cost and profits of all of all your buildings, right. So when you are managing a site or managing an operation, you have to have metrics boiled down to the most granular level, right? So for me on a cold storage, building that square footage, so you have to know how much your cost is how much your revenue is per square foot. And how racking can change that, right. So if I have, you know, we did constant examples of these, where all of a sudden, it would be a two high floor stack rack or two high floor stack, right, where you got something that's not securable. Beyond that, then all of a sudden, you lose all that cubic kind of top, well, the air on the top of the building cost just as much as the air on the bottom, right. So you have to maximize your total tubik square footage. In order to do that, right, you have to go in and you have to provide basically just multiple analysis for yourself, in order to make sure that you're following the following that correctly. If you don't do that, you need to start. And if you do, if you do that, you can make sense of these racking projects very quickly. I mean, we went back and forth on a bunch of that some of them made sense, some of them didn't. And it ultimately comes back to the ROI that you're actually trying to capture. Right? If you're doing a bigger project, longer project with more capital, you can shrink not string it out, but you're okay with a longer return. Right? If it's a new building, you got to be expecting 10 to 15 year ROI, right? If it's a short rocky project, and I want to make sure that I maximize the return, I'm trying to get 1218 months. Right? So it just comes back to your working capital and how fast you need to turn it. And if you don't know those answers, you shouldn't be investing in anything. You got to answer those questions first.
Mark Hiddleson 13:20
And you can find opportunities quicker in your business, because you have, you know, kind of the, you know, a little bit of background about ours. So you and you learn that when you were working for what was the first company and who are some of their big clients that was Golden's. So Golden
Matt Burke 13:37
State foods. Oh, they own all subsidiary of theirs is quality custom distribution. That's actually where I started. And they do the distribution for Starbucks, Chipotle, Chick fil A and a couple others. So my, one of my first projects was going in because everybody, a lot of people immediately think when they get a warehouse going, that it's immediately full. And it primarily comes down to just understanding how the space in the warehouse actually works. Right? So you have to look at everything, you can't look down only in a warehouse, you have to constantly look up to see where your opportunities are. Right. So that is kind of where we went through we did a basically a warehouse optimization project for the whole QCD network. We went through all 13 facilities and mapped out where the opportunities were to add more pallets, which effectively adds more revenue. And that group was a long term focused capital of tents group, right, you're okay with a lower return, because you know, you're gonna hold those assets for longer. So there's a little bit of a different mindset. But that's a math can be applied basically in any model.
Mark Hiddleson 14:54
And they're a third party warehouse, meaning I think a lot of people and I try to bring it up on as many of those podcasts Got a lot of people that might listen, don't know what third party is, like, I remember I was surprised when I saw, you know, all these cans of pineapples in this like, yeah, that's all the pineapples in the world. And they might put a one label there, all the different labels and they they're just bear cans and they slap the labels as they go on. There's a lot of different things in business. I mean, even the Canada empty cans have to be stored somewhere before they do the canning, the fruit has to be stored. And so all these things are in warehouses, most people don't I wonder how many people don't realize you can you can outsource your warehousing. I mean, that to me, that was one of the big aha is about getting this business like wow, these, like the clients you're you're working with, especially the direct to consumer. They're they're selling and taking the orders and collecting the money. It's totally different from where the stuff is totally different.
Matt Burke 15:49
shipped out. It's really interesting, because you have you obviously have smaller accounts, right, mom and pops that Do you know, one to 50 pallets, right? Farmers felons, yeah, local pallet that'll sell spinach and freeze it like those kinds of things, right? There's a lot of those accounts. But the largest fast food chain in the world, McDonald's outsources almost all of its distribution. Right. And the reason why a group like that will do it is so they can focus on really what they want to do, I'm not going to speak for them, but I'm assuming is to ensure that their customers get the best, the best deal and the best deliverable that they can provide from their restaurants. That is not. That is not distribution. Right? Right. So if they're focusing on managing the trucks and maximizing the trailer, cubic square footage, maybe somebody doesn't get the Big Mac the way that they should, right, and then that's a lost sale, you can't you can't boil the ocean, right, you can boil a pot. And if you try to do everything, you're going to be average at a lot. Or you can get really, really good at a couple of things. Now there's there's other groups that say distribution is absolutely a core business model bars, like Dutch Brothers coffee does, like almost all of it, right? So it just comes back to what do you really want to focus on. So it's, it's because a lot of a lot of big groups do it, and a lot of big groups outsource it. So it doesn't feel like there's really a right or wrong answer. But in each individual opportunity, there can certainly be a wrong answer. You gotta leave space.
Mark Hiddleson 17:49
You know, because somebody's like, there's a learning curve from the 50, pilot to the 2000. There's a learning curve. And so if you're in business, like you said, doesn't matter what business you're in, what it takes to run this mall, and then you guys have expertise in all of it. And you've seen so many other businesses and how they do it, and you have other clients in there. That's a core competency that, really, I can't, and it's funny, some client, one of the things that's kept us in business is clients will, they'll do an analysis and they'll say, We're gonna we were outsourcing their logistics, but we're gonna bring this in house. And so we set up all the system for the doing house, and they do for a couple years, and they're like, well, all the numbers we ran, it doesn't really pass Well, we were better off having a third party warehouse. So I'll send it operations.
Matt Burke 18:33
Operations is not surgical. It is not clean, it is not black and white. It is a whole lot of gray. And it's really hard. And you have to manage it up the trucks never stop operations never stops, right? You're managing labor, whether you want to be or not. I remember taking phone calls on vacation, because people weren't showing up, customer orders weren't dropping, if you're not paying attention to it. Nobody is right. So you can you can find out very quickly how hard operations is. But there's a lot of people that have experience in it, obviously, different levels and varying degrees of success. But if you get the right group, a right partner that has done it before, they have huge amounts of knowledge that you can tap into for, you know, effectively the price of a pallet. Right. So I started to do a direct direct to consumer consulting for some brands, right, because now all of a sudden, I've seen groups go from 200 cases a week to 20,000 cases a week, same brands, right. So when you see it once, twice, three times, five times whatever the number is, you start to build that. That knowledge base and a lot of it's repeatable. And if you work with somebody that knows where the path is and how it's going, right, you don't have to you don't have to rediscover the wheel. all the time, you just gotta get lucky with the right operation partner or really invest the time to find it. And it's worth a
Mark Hiddleson 20:06
lot. So would you agree it's a lot easier to scale with with a third party like you than if you were to go out to the general warehouse, because then you'd have to go from 10,000 square feet to 100,000, or whatever it is. And
Matt Burke 20:19
financially speaking, financially speaking, unless if someone's mom or dad, you know, owned land in Manhattan in the 80s, or whatever it is, right? You're probably you probably don't have the option to go out and do your own operation, right? It's, you know, $10 million for not a great building, right? So it doesn't mathematically make sense. When you outsource it, you can focus on what you want to do, which is typically being a food company, or being a marketing company, right? Those typically in my world go hand in hand, right? You manufacture reliable, and then you mark it well, you find an opportunity within the customer segment. When you do those two things, and when you do them successfully, all of a sudden, your brand starts grill, a consultants gonna come to you and say you should look to in bring your supply chain in house, right? That group doesn't understand that if you bring the operations in, you're saving pennies at the expense of dollars. Right? So the, the upside of that dollar isn't very much, right? Like you're trying to save 20% on a service that costs $7 doesn't make a lot of sense, when you can take that same money, put it into a new customer acquisition, that could generate $1,000. Right? So it just comes back to where do you want to invest your money. And you have to be really big, in order to do your own direct consumer operation in order to make the math work, right. HelloFresh does it they're the largest Noro. Freshly used to do it. And they're now not operating it. So you know, you can make it. It can work both ways. But if you do it too soon, you can't cover the operation expenses of a big warehouse if you don't have enough volume, and you just always run out of time
Mark Hiddleson 22:20
you do is some of the mistakes a lot of when the.com Boom happened. I know you were still in kindergarten when
Matt Burke 22:28
when you give them a I just got in the business happened. And it seemed like people did, they saw that there was gonna be this huge demand. So the build giant warehouses with awesome picking systems and everything else like that. But like you said, everyone's capital investment. Everyone's going through all that stuff right now. Right? Because 1218 months ago, everyone was under the impression that growth was endless, right? There's only 330 million people in this country at some point, right? Eight, eight Yeah, being handed out, you know, on top of that, that people aren't having families of five or six, right? People are having families of four. Right? It's a one to one replacement now. So it's not like the population could continue to grow. But when everyone went through the pandemic, and I was like, you know, my sales are quadrupling. Every week, everyone's like, Oh, yeah, we'll just do this forever. Because that mathematically makes sense. And people way over extended. Amazon is a perfect example. Right? The largest company in the world, effectively give or take, you know, maybe somebody else is giving away warehouse space. giving it away, right, cutting leases, reducing, reducing square footage, putting all that stuff back. If they did it. Everybody else pretty much did it. Everybody overextended because everyone thought the growth is going to continue. So it's not called the.com. Bust yet, because we still don't have a term for it. But the pandemic era definitely ended. And it ended very fast, the party definitely was shut down at 1201. There's no lingering no longer that now it might start back up. Right. That's kind of what everyone's hoping we go through a little bit of a downturn. Is it 12 months? Is it 24 months, right? If it's longer than that, there's going to be a lot less direct consumer brands. If it's shorter than that the ones that survive all of a sudden are going to come out really fast when people have more money to spend because there's going to be less options to buy from. So these 12 months are going to be very interesting for this for this industry to see where it where it goes because the American consumer is under so much pressure more than what the direct consumers industry has ever felt before. So
Mark Hiddleson 24:46
So here's the question I want to ask you, what are some of your best you've seen people grow from 20 case or 50 cases to 2000? What are some of the things that are generating the best traction for those clients? I mean, it really more typically to your end of the business on the fulfillment, like what are they doing? To get traction and results, the bustle.
Matt Burke 25:09
So the best brands know exactly who and what they are. Right? If you're a Fish Company, sell the best fish, don't try to make a fish dogfood. Right, sell the best fish, right? Because the groups that do that, and they really hone in to their core. And if that core offering hits with a client or a customer group, right, they tried to become so ingrained with their customers, that it's like a part, if they were to shut off that subscription service, it's like a part of their identity is being removed, right? Our customers communicate via text message to their customers, right place, your order reminded that you have their their phone numbers are saved by their customers, right? It's a really intimate connection that direct consumer companies have. And when you lose that personal touch, you just become another soulless entity that is replaceable. Right? You know that that's kind of the difference, right? And the groups that hold that, for longer are the ones that are the most successful, chewy is a prime example. So when they were when they were little, they're the largest UPS or FedEx account the world, okay, everybody loves their pets, gigantic, do they use a hand write? Thank You cards, he Andrei, to their customers in the start. Now they were burning cash like crazy. And all of a sudden they IPO and whoever had that business model came out very, very okay. But they knew they knew exactly what they were, they were high in customer service marketplace that just so happened to serve customers pets, but they were loved by their customers because of how much they cared. Right? Once you lose that. And all of a sudden, it becomes ran by some New York investor who's just trying to manage it, create as much margin as possible, and you cut out the thrills and thrills, all of a sudden, you actually don't offer anything because a product is a commodity, but a relationship is what is really valuable.
Mark Hiddleson 27:26
Wow. And that wasn't that's, that's kind of that's an aha for me, because I don't think I don't order a lot of stuff online, like I will. Well, actually lucky for me, like my wife buys a lot of stuff I meet anyways. But I just think of it as kind of a say in a more of a cold transaction, like you go and you click a button, and then the next day it shows up. So what you're saying is, in order to differentiate yourself, it's not just click a button, it's a relationship however, from because they get updates, like when it's shipped, right or, or, you know, there's your pack is gonna be there you order yesterday, thank you. And they're staying really intimately service. And,
Matt Burke 28:05
yeah, a direct to consumer company will be on your Google Calendar. Right? The delivery from Butcher box, or crowd cow or whatever is coming on Thursday. And you know that it's coming on Thursday. So you don't have to worry about protein for the next two weeks, or whatever the number is, right? When you go to a grocery store, right, it's like a result of all of a sudden being out of food, right? It's not, you know, you're not revolving everything around it, right? It's the results. The direct consumer, you buy with a very clear intention of I want this product. And I'm going to build basically the rest of my meals or my pets meals around this, right. So it's it's a commitment back because it takes time, you gotta go in and fill out the credit card information, all that kind of stuff is way easier, just swipe the credit card at the grocery store. Right? But when you do it was and all of a sudden you become that brand member. Right? It kind of becomes a part of your identity. Right? Like I you know, almost farmer's dog. Last summer, right? I got the stick. I got the sticker. Right? Yeah, that's, that's who I am. Right? And then all of a sudden, you see other people that are like, oh, yeah, like I'm a part of that group too. Right? It's like a sense of identity. Which is very different than just the role Costco kind of has it right. You're a Costco member. Right? You feel you got a card, right? They charge you for it, but you got a card,
Mark Hiddleson 29:42
right? So it's Costco has it where you go in for a gallon of milk and you come home with a recliner, a hot tub and a flat screen
Matt Burke 29:50
at a million you is to buy at a minimum you would have to buy four gallons of milk, right? You're not just gonna buy one because you gotta be ready for the entire Apocalypse but You're you have kind of a sense of identity that's attached to that brand, right? Fashion. Fashion Brands do this all the time, right? All of a sudden, you just look at your closet, and you're like, Oh, my God, I have like, eight different things of Lululemon, like they're all kind of kind of the same product is different colors. Why? Because it matches with what I do know matches who I am, I didn't, I don't know why, all of a sudden, my class just looks like that, like, it just happens. And then you're identifying yourself as that. Right? You know, that's kind of the difference. It's not just a commodity,
Mark Hiddleson 30:36
we have a few apparel accounts, and they are they offer returns to it. So you guys don't have a lot of returns. But in the apparel, like you were talking about, there's a whole reverse logistics side. Because if you have to try something on or get shoes or anything they I think they get I forget what it was a huge number, like 20% or 30%. returns just because people are buying stuff and they have a policy
Matt Burke 30:59
to super, it's super hard to because you're trying to build standardized process. For an end consumer. It's not standardized. Right. So your record, you know, this is kind of how a lot of those groups get around it. Right? You asked for people who go do the returns? And if they do it great. If they don't like you already got you already. Yeah, hearing a paid right. Like, I need to make it easy enough for you to do it. But I don't want to incentivize you to it. And the groups that have done that, are grappling with that issue, right? Because so many, not so many. But a lot of groups are defined by the return policy. Right? Always return it always. It's like $10 to return it. So now, not only did you not buy it, I had to give you your money back. So I'm back to zero. And then I actually had to pay you to return something that you didn't like, that's a negative $10 transaction. That is not a good business model. But you know, if 20% does it, and you factor that into your overall cost of everything, right, you apply additional dollar, right to reorder, and you can make the math work. But nobody's going to ship back steaks to the original warehouse. That's not that doesn't that doesn't work. If you don't like it, that's too bad. So how do you get you from other tuition credits?
Mark Hiddleson 32:22
You're in the food industry? He kind of started in the are there other operations beside like apparel is one are you have you learned from other businesses, then? Do you think it was specific example that you applied to your operation?
Matt Burke 32:37
So warehouses? Warehouses really operate very similarly? Right? It doesn't the same solution minus temperature is kind of always like the same solution. Right? Like, you know, if one group can automate it, the other group should probably also automated the components just that might not be correct, right? You might not have enough volume, you might have too many skews, right? It doesn't mean that it's not the right answer. But it just might not be the right answer that's actually applicable. So you know, warehousing boils down to a couple of very, very basic things, right? The inventory control, labor management, right? And the utilization of space, whether that's socks, shoes, steaks, seafood, it's kind of that part is all kind of the same. So if you see a good operation, like you took me through some of those wine, some of the wine guys,
Mark Hiddleson 33:35
that's right, yeah, yeah.
Matt Burke 33:37
Hundreds, hundreds of 1000s of dollars in product, like in a very small amount of space, very small. If you take a look at how they're how they manage their inventory, right, that's extreme. But it can be applied to our business because their guard were guardrails, and their restrictions are so ingrained to that company, if you operate your inventory closer to that, you know, where they have $400 bottles Caymus flying around, right? Then you know that your steak that is $20 is going to be better managed and maintained. Right? So you just kind of have to figure out what is what is the best for each industry when you're going around to keep an open mind because everybody is working on kind of the same things. It's just a slightly different environment.
Mark Hiddleson 34:30
Yeah, full pallets, half pallets cases, each is so so you can really help people as a consultant, it doesn't matter. You know, even if somebody's if they're not in the food business, if they have a warehousing question, and I'm gonna put, I'm gonna have your contact information, if you allow us we're gonna put it on the shownotes your openness field, those kinds of questions that you have, you kind of have the ideal client that you get I mean, obviously, you're helping people go from direct to consumer. Do you have like an ideal client? You'd like to work with? No size question. I'm
Matt Burke 35:10
not, you know, it's probably going to be more of an impact when it's a slightly smaller group. Right? When it's kind of a startup, right? Be kind of a mindset, right? Because then all of a sudden, you're working directly with somebody who can actually go out and make decisions. When you're when you're a consultant that's hired in to go into a big operation, right? A lot of times, you go in and you make a recommendation, then you leave, then everybody that a boardroom says, they got that guy left, right, because everybody kind of walks into the same situation, right? You're hired on. And that means that management thinks that the local group isn't doing a great job. And you're going to hire this person, who is telling everybody that they are smart and good at this, whether they are aren't, is to be determined, then all of a sudden, a consultant leaves. And typically, none of this stuff gets implemented, because nobody actually wants to do it. Right. So it's really hard to walk into a big operation, create some form of a following. And then tell a bunch of people that you're eventually going to leave. This is how you should do it. So anything about
Mark Hiddleson 36:24
steamers consultant I never liked as a vendor, I don't like working with consultants for that reason. I don't give them and I shouldn't I mean, I tried to give everybody you know, the same shape. But there is there's a little there's a stigma, there's a thing in the back of your head, it's like this guy is just with a lot of times for us, they'll use our information, like a lot of what we do is consulting and they'll take what we're doing as part of our proposal, and they'll know they'll call it there's
Matt Burke 36:49
by my grandpa always said that a consultant is paid to tell you something that you already know. Yeah. Well, that seems like it seems like it seems like
Mark Hiddleson 37:03
they asked you it's tough. Like you said, not everybody's a candidate like I did, when he were telling that story reminded me Pepsi. This was years ago, I did a Pepsi, they had a problem, they had three different kinds of pallets, and a 36 by 36, pallet 48 by 40, and a regular 4048. GMA, and racking systems, you want everything to be the same time, you've got all these incidents a nightmare, and it looks like conveyor systems, everything but what what was driving it is that the production was set up for that. So wherever they were making, like they had certain things like I forget what was Mountain Dew or so two liter bottles or something? The machine that made it only got fed 36 by 36? Because whoever designed it, so I kept telling them for years, five years, I'm like, they're like, Well, what can we do? You know, what are we gonna do? Like, well, you need to standardize your palate. Well, it's not that hard. Everybody else is doing and they're like, No, we can't everybody. Yeah, they pay the consultant like 150 grand or something. And then the one thing they told them is, is standard as a pilot, and then they did it. So like you don't want again, the company.
Matt Burke 38:08
Sometimes you just gotta hear from a different person. Yeah. Right, because he's a little app and is that when you hire a consultant, you're admitting that you need to listen to somebody, that person might just be regurgitating information that's already been told to you, too. And a lot of times are being told to you by people that are hourly, that you don't really want to listen to, right, you don't want to really admit that the supervisor actually knew the whole time, but you should actually focus on or a vendor that is paid to do something entirely different. is telling you to do this one thing, they'll help you fix it. Right. So it's, it's kind of a hard thing. Small, smaller accounts are, it's easier to make a big impact, right? You can redesign, you can redesign the SKU mix, for example. Right? You can go from 500 skews to 350 skews, right. And you know, if they haven't done that type of thought process before, that has a massive ripple effect. Right. So going in and trying to knock down the, you know, the oak door at some gigantic company that doesn't want to get broken into, right? It's not very fun, right? It's going to be forever project. And all of a sudden, you just feel like you're an employee, right? It's not what you're, it's not what you want to do, right? And consultants, or at least I am interested in helping provide faster solutions, utilizing the experiences that I have, for people that don't have those experiences. Right, and you want to do it, you want to do it fast and you want to solve a lot of problems and you want to try to help somebody get past that bottleneck. Right? Because if you help them get past the bottleneck, yeah, they're probably better than you at the other things. Right? Right. Then you give them the chance to scale then all of a sudden you have a good recommend you have a good Good referral array and somebody viewed your work successfully because you help them grow. And that's really all you can all you can try to do and ask for.
Mark Hiddleson 40:08
So, and you will also you become kind of an expert or resident expert in packaging. Rice has had to share a little bit about that, like I don't know much about like,
Matt Burke 40:21
so we I've packed and shipped like, like 5 million of these boxes. Right? Now, I probably pack the most like, inaccurately out of my auto out of all night of all my employees, but I did. So when you see these things, right, and you see what one company does, and another one does. And when you get into an industry, you see that a lot of people are just trying to solve the same problems, right? There's like five things, right that everyone tries for us, it's partial spends the freight sponge, right? It's a coolant, dry ice gel pack, right? Inventory Management, labor management and order processing, right. It's all kind of the same, kind of the same thing. But everyone ships everything in a box. With installation. There's one constant. Now it might be different. But everyone does it like the same way. But it's always the same products. It's because there's actually not quite a monopoly, but it's pretty close to a monopoly on the on the installation side, there's like, there was three groups. Now there's two because one bought the other one, right, and there's too much demand, and there's not enough capacity. And all of a sudden everyone has, you know, everyone just gets the same things, right. But it's not custom. It's not, it's not different for any, but it's the exact same, it's like everybody walking around and exact same white pair of sneakers, you get a different size, but they're all the same sneaker, yeah, right, you're shipping something that's completely different than somebody else, but you're gonna get the exact same product, they're gonna tell you it's different, but it's not. So when you start looking at where these direct consumer companies are going, you need to actually have a custom solution that can be adjustable for everyone. So that's something that we're working on. I'm a part of a group called Little Feet Packaging, we have a product called polar bubble, where you can actually toggle the material thickness to address Time in Transit, for your orders. So if I'm shipping boxes to California from California, that's a one day transit. So I get to actually do that I get to utilize the appropriate amount of materials for that order. Now, when a box goes from California to Seattle, it's a different amount of material, it's a to date, amount of material, right? The competition is effectively applying a one size fits all. And that is to cover the two day or three day box, right? Our model allows you to toggle back and forth and actually address the need of that individual order, which will help you reduce your cost, right, you don't need a you don't need like a rocket launcher kind of approach to solve everything, you need to be much more strategic on a per order basis. And that helps you remove cost and, you know, just help optimize your overall performance. So when you start to dive into those things that everyone uses as the same, right, there's an opportunity to add some form of disruption. Same way how regional carriers are starting to disrupt the big two of FedEx and UPS, right, they cover everything. Now all of a sudden regional carriers cover very specific metros at a higher performance and a lower cost. Right. So you know, when it becomes the same and only offering there is an opportunity for disruption in that industry?
Mark Hiddleson 43:55
Yeah, you reminded me and your story parallels you've met Steve Waller he's the minimum one of our executive breakfast is he's the one that reasons hidden. Because we were teased, right doesn't do the technology always he wants to have that paper. I remember he brought his paper to breakfast. Yeah, yeah. And he was employee number six at DHL to kind of like you employee number five, and they went from six I had him on the podcast couple weeks, it was six employees. I think that 2000 and from 1975 to 1980. Steve opened up all those countries like Greece and like all the Middle East because like the mail sucked, like you couldn't get anybody like there wasn't FedEx. There wasn't so he was just going around, opening everywhere and they build DHL in not to, you know from 202,000 It's a steal.
Matt Burke 44:55
Not to not to rain on my parade. Yeah, so He's just another zero,
Mark Hiddleson 45:01
there'll be he'll be, he'll be at a 2000. By the end of the year. I wanted to ask you about pick to light, because that's a technology that you did a lot of research on, and it didn't pencil out and it didn't pencil out. Do you mind sharing kind of, so pick the light is if you have the shelves, and then the lights light up to grab the order. And so the you don't have to read a label or anything, you just look the light lights up and the employee knows, grab one and put in the box. So you were looking at that, I think for five, five marks a long time before you actually did it. So share a little bit about how that process was and what how did they finally make. So
Matt Burke 45:42
pick the light has been around for a long time. Right? It hasn't been around for 50 years, but it's been around for 20, right? Or whatever the number is. For our customer mix, it just never really made sense because we had such a small SKU count. Right? So we had like 120 skews was kind of always our max. And when you have it set up on the roller rack system, right? If you're getting six by four, you're getting 24 skews in eight feet. Right? So you're only having to walk 50 feet to cover 120 skews. Right? It's not it's not very far, it's not very complex, right, you can basically look at one set of racking and see all your skews for the customer that we finally did it for. They have 350 active slots, which rotates 500 Total skews, right, because you have some that run one week, some that run the other week. And they're trying to grow to 1500 skews. Oh, wow. So when you when you start looking at that when you're looking at basically the equivalent of a grocery store, right, it makes more sense to do it. But when it's kind of a tight sprint of a SKU model, it doesn't make as much sense. So just because you know it's an optimal solution for picking doesn't mean that that's the optimal solution for you at that time. Because here's what pixelate would help us personally solve is going from, like 99% accurate in orders, which is just using, like human interaction and manual processes, to 99.75. Right, our customers weren't going to pay more, for that three quarter of a point improvement, they weren't gonna be like, oh, yeah, here's another dollar. Alright, so obviously, you spend, you spent 500 grand to get incrementally better, for zero additional dollars, your operation would by definition, be better, less, less flexible, right? Because now you have a rigid system and infrastructure in place. But it definitely would have been better. But that doesn't mean that you actually need to get any additional money for it. Right? You know, this isn't, this isn't for charity work, right, you have to make sure that the math always pencils out. And when you cannot generate more revenue than the investment really doesn't make any sense. Unless if you're looking at the downside of opportunity of losing that account and our business, right. But it never worked. Because it was always going to slow us down. It was always an add too much complexity. And I didn't have long enough contracts to really make it work. Right. So we finally had a group come in and say this is what we want to do, we're going to take the risk on it. And you know, we opened up their doors to kind of let it happen that it worked. But they were the only one that can actually support it from the SKU count. So, you know, if you're going to be have it 1000s of skews, it makes a lot of it makes a lot of sense. In order to do that, and it's also because it's still set up in the same roller rack structure, right? Let's say 15 1500 SKUs, for us in that model is still only going to be down 120 feet of rack, double sided, and maybe an additional U turn right. So it's like 250 feet that you might be walking. I'm not walking miles in a warehouse. Right, right. So you know, it has to really fit the model that you're trying to do. And for us it does. But for a long time it did it even though I looked at it every year. Yeah, I still still didn't make any sense every year. Yeah. Then if I need to go on
Mark Hiddleson 49:40
to prove that with you. And it was probably five, five or six or six years ago because it's pretty much coming up in a few weeks. So I got one final question. And I love to ask people this and that was his I remembered you. You told me what a GIF was. I didn't know how to remember he said He adjust. And then I shared it was unable to respond. And I was like, how do us do that? And you're like, ask your 11 year old kid. And I actually ended up doing it by accident one time. And then I remember,
Matt Burke 50:12
you just hit the plus just hit that plus button.
Mark Hiddleson 50:16
But what are some technologies that that you're using? If if you have any, or things you're doing, they kind of might be new, or podcasts that.
Matt Burke 50:28
So technologies for life for technologies for work?
Mark Hiddleson 50:31
Yeah, just anything. I'm always curious. Like, we started using slack, you know? Oh, yeah, really great. So, like, for me, personally,
Matt Burke 50:41
I've started to use a personal budgeting app called Mint. And it allows you to track everything, right? Because, you know, when you're so focused on your work, right, it's sometimes your personal life and expenses become on the backburner, right, which for you, for you, personally, me, personally, is probably not the right way to do it. Right. So you have to manage it. And it creates a very simple platform, you can always see where you are, you can set personal budgets for yourself, have everything mapped out. And you know, if you're doing a good job or not, because you know, money doesn't define happiness. But if you don't have any, right, it can be very uncomfortable, very fast. And it's the world is a very easy place to overspend, and do all that kind of stuff, right. So that always keeps me in check. That keeps me in and in line and sequence and all that kind of stuff. So it kind of takes the pressure off of me. When I have to do it on my own. Right now all of a sudden, I have like, kind of an accountant. But I have a reference that may lead us. So that definitely helps. It makes it a lot easier. You don't have to worry all the time. It's all right there for you.
Mark Hiddleson 51:57
Yeah, you're right. That's great. Yeah. And I do focus all this time that they're on the business, like you said, and crunching the numbers and making sure in the financials and everything like that. And then it home. It's like, well, I just, I want to take a break. Right? So Mint is called Mint, and it's an app. And that's cool. Yeah, I've read that people are selling I think we talked about this selling spreadsheets on Etsy. Because same kind of thing, like you can have you can plug things into a spreadsheet, but this meant is not. So we're running out of time. What is the best way for people to get a hold of you if they have a question about warehousing or packaging, installation? Anything we've talked about? What's the best way to get in touch with you?
Matt Burke 52:44
I, I answer my phone all the time. I talk on my phone all the time. So phone number, phone call or text message is always is always easiest for me. If not, I'd say I get to my personal email, it's kind of towards the end of the day. And I have, I have a very clear habit of making sure that I always clear my inbox is at the end of each day. You gotta go through and figure out which ones are important, which ones aren't. But I never want to leave anything on unread. That is like a personal goal of mine. So I communicate probably too much and all that stuff. As my wife will tell me, but I'm pretty I'm pretty easy to get. I'm pretty easy
Mark Hiddleson 53:28
to get a hold of. Yeah. So we'll put your it's okay to put your phone number in the show notes. And then we'll put your email. And this is and if
Matt Burke 53:39
if somebody reaches out to me that I don't like I'll just block them. Like it's not a big deal. Not a big deal to me. Yeah. You blocked me before but have a table too. That was on accident. That was an accident.
Mark Hiddleson 53:51
Yeah. So folks we've been visiting with Matt Burke, warehousing, professional direct to consumer fulfillment extraordinaire, Matt, this has been I've been looking forward to this as a lot of fun. A lot of information educational. Can't wait for my guys to watch this and can't wait to send it out. Thank you for joining us.
Matt Burke 54:13
You bet Mark.
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