Downsizing your business is not as fun as expanding it. The problems may be similar, but the processes are different.
The past two years have been tough for my direct-to-consumer men’s grooming company, Beardbrand. I’ve explained our challenges repeatedly on this podcast in hopes of helping other sellers. covered our conclusions ada lawsuit, We are persevering even in the face of declining sales., reset your businessetc.
This week’s episode covers Beard Brands’ recent experience changing 3PLs (third-party logistics providers). Full review with embedded audio below. The transcript has been edited for clarity and length.
low volume
Our fulfillment partner was a great fit when it came to offering Target. But we No longer works with Target and its large wholesale demand. We needed a small, low-cost partner.
Switching warehouses was inevitably cumbersome. There was excess inventory and it was not working. Many of them did not sell. Unlike scaling up, where there is a clear path forward, scaling down means figuring out what’s left. We had hundreds of pallets of products that we didn’t want to get rid of at discount stores because of expiration dates. While looking to reduce inventory, they wanted to control the customer experience and ensure customers only received the best products. Ultimately, it was not practical to continue storing these items, so we disposed of a large portion of them: approximately $200,000 in 2024 alone and approximately $500,000 last year.
The next step was to find a new fulfillment partner. After considering several options, we finally settled on a warehouse in Milwaukee. It had more space and offered a reasonable price. It seemed like a good fit, so they offered to cover some of the shipping costs for the move from Texas. We followed our standard practice of sending half of our inventory to our new warehouse while continuing to fulfill orders from our old warehouse.
new 3PL
However, things quickly deteriorated with the arrival of new 3PLs. Everything seemed fine at first, but once shipping began, problems arose. Customers complained about delivery delays, which was unusual for us. Then the bill came. Based on estimates, we expected average shipping costs to be reduced to approximately $10 per order. We were paying $13. We figured we could save a few bucks by moving. Instead, the cost jumped to $14.50. After digging into the details, we discovered that our 3PL had started charging additional fees and markup shipping fees. They also used oversized boxes, which increased shipping costs for small items.
Although the packaging issue was addressed, the invoice did not match the original estimate. It turned out that the 3PL had been editing quotes in Google Sheets without telling us. Thankfully, the operations manager had printed out the original quote, and comparing it to the updated quote revealed that there had been changes. The warehouse staff ignored our concerns and we ended up looking for another option.
return to texas
Moving the warehouse again wasn’t ideal, but we had no other choice. Luckily, we had a friend with a warehouse in Texas who took us in. As a result, we were able to move back closer to the manufacturer and work with someone who understands our brand. We again phased in the transition, moving half of our inventory to Texas, with the remainder remaining in Wisconsin until the switchover was complete. However, issues with the Wisconsin partner remained unresolved, and orders and deliveries continued to be improperly processed.
The final package from Wisconsin was a mess and very little care was taken in its packaging. We learned from that experience, and now our operations manager frequently visits our Texas warehouse to oversee setup and work with staff on packaging and shipping methods. It’s been a few weeks since we entered into the partnership and things are going more smoothly. The cost is now less than the original estimate of $10, and customer feedback has been positive.
The new Texas setup is going well. We now have control over the shipping experience, packaging, and customer satisfaction. My operations manager is invaluable in helping us deliver a high-quality experience while controlling costs. This move to Texas ultimately put them on the path to profitability and allowed them to transform Beardbrand from a break-even business to a sustainable one.
lessons learned
Our experience with a Wisconsin 3PL taught us valuable lessons about practices during vetting and onboarding new partners. We should have spent more time onsite during the migration to catch potential issues early. I can’t expect my fulfillment partners to care about Beardbrand as much as I do. You need to set clear standards and ensure they are met.
We learned that moving to a new warehouse isn’t just about saving money, it’s about finding a partner who aligns with our values. Beard Brand values freedom, hunger, and trust. The new Texas provider shares that ethos in a different way than the previous one.
My bookkeeper and I agree that this shift in operations could protect our future. Get more bang for your buck by reducing costs and improving customer experience. There are always unforeseen challenges, such as product damage, but the path to profitability and growth is already paved.
nothing is permanent In business. Stay in the moment and make the most of each day. The Wisconsin chapter has had a tough time, but we are moving forward. We all have the power to make change happen. If something isn’t working, take steps to fix it. Aim for a stronger business while learning.
