Case Study: Popl CEO Jason Alvarez-Cohen Discusses How His Startup Handled Product Logistics As Their Growth Exploded

Learn from Alvarez-Cohen how to manage logistics at scale.

Sep 10, 2020

In many scenarios, exchanging social media and contact info can be slow or awkward, such as the situation is too loud to orally exchange information, too ephemeral to type on a smartphone, or too casual for business cards. Popl addresses those situations and creates opportunities for more in-depth and instant sharing of any type of digital information.

Popl is changing the way that people interact. Our focus is to make connecting fast, reliable (no more missed connections), and fun using near field communications (NFC) technology that is now becoming universal.

Executive Summary:

The Problem - Decreasing Time Spent On Product Logistics

Popl faced the unexpected challenge of having to mail larger and larger quantities of Popls (NFC tags) to their customers. They were spending increasing amounts of time on organizing shipping & packing logistics of Popls.

Action Item: Success comes with its own new challenges, therefore you must prepare to handle those challenges cost-effectively as you scale.
The Solution - Outsourcing Popl’s Logistic Needs To A 3PL

After a combination of research and trial and error, Jason and Popl found that working with third-party logistics (3PL) companies was the way to go as the startup scaled.

Action Item: It’s best to outsource behind-the-scenes tasks to maintain focus on the core business of your startup.
The Takeaway - The More Logistical Nodes, The More Communication

The more nodes in your logistics network, the more communication you will need to ensure your products are packaged right and delivered on time.
Action Item: The more parties involved in any kind of work, the more you need to communicate to make sure everyone is on the same page; don’t assume otherwise.

Founder File: Finding the Right 3PL

Jason Alvarez-Cohen, cofounder and CEO of Popl.

The Problem: Decreasing Time Spent On Product Logistics

What was the toughest problem you've solved recently?

When we launched Popl, we fulfilled every single order out of our apartment, which took up an immense amount of our time each day. To scale our business, we needed to find a faster and more reliable way to get our product to our customers. The solution: researching, testing, and eventually partnering with a third-party logistics company (3PL) to handle all order fulfillment at scale.

Describe the nature of the problem. What are the critical constraints?

At one point, we were spending many hours each night packaging orders to drop off at the post office the next day. To save on costs, we shipped all orders in envelopes and used postage stamps for shipping. While saving a ton on shipping, we didn’t offer tracking and had many cases of orders being sent back to us or lost in the mail. As a result, we were spending too much time fulfilling orders that often didn’t make it to the customer. A lose-lose scenario. The customers are the most important part of any business, so we had to improve this.

What was your initial thought process in solving the problem?

We actually didn’t know what a 3PL was before Popl! But as we spent more hours fulfilling orders, the scaling problem became bigger, and solving it became the highest priority for us. So we researched methods that e-commerce businesses use to ship orders and we came across the concept of a 3PL. This was very exciting because a 3PL would handle all Popl order fulfillment and would provide tracking to customers, freeing up several hours to focus on other parts of the company. A 3PL, however, would make our shipping costs increase significantly. There were tradeoffs, but we ultimately saw this as a necessary step to taking our company to the next level.

The Solution: Outsourcing Popl’s Logistic Needs To A 3PL

How did you evaluate your initial solution(s) before trying to implement them?

How could we know if picking a 3PL was an excellent choice before making the decision? We compared multiple 3PL options and looked at the service level agreement of each. Factors like turnaround time, number of warehouses, and customer support are of high priority to us, so we picked a 3PL that matched our preferences. We saw this as the best solution to our problem and therefore, worth the extra cost.

When you were working to implement them, what else did you discover that either confirmed you were on the right track or opened your eyes to a new facet of the problem?

As we were building new systems to move from the apartment to a scalable 3PL, we encountered further problems with the 3PL that we had not foreseen. We could take the extra time for personal care, proper fulfillment methods, and attention to detail with fulfillment in our apartment. With a significant 3PL that has multiple clients, this is not always the case. It took us time, but we had to train staff at each touchpoint. How to stick each Popl to the instruction cards, pack multiple Popl orders into one mailer, program the Popl accordingly, etc.

We also have a relatively high number of different products (form factors, colors, styles) compared to our 3PLs average client, so there were issues with inventory management to start. This led to incorrect deliveries to customers early on.

When did you realize that you arrived at the right solution of third-party logistics?

When we finally had everything running smoothly, it was an incredible triumph for the entire team. Each order had reliable tracking, proper care with each touchpoint and was being shipped in 1-2 days or less. This new, smooth fulfillment process allowed our time to be freed up to work on other tasks to grow the business in different important ways. This extra time to focus on other company priorities confirmed that we had found the right solution.

The Takeaway: The More Logistical Nodes, The More Communication

Did that solution come with its caveats or tradeoffs? If so, what are they?

The most significant tradeoff we have seen thus far is the extra node of communication that the 3PL creates. We have direct contact with the carriers with fulfilling in house, had an easy (and exact) method for keeping inventory of each product, and made sure each order was up to the Popl standard. With a 3PL, all this became a phone call, email, or another communication line away.

Any additional communication step will make a process less efficient, but the overall benefits of the switch to a 3PL outweigh this tradeoff.

What is your general advice for founders on how to face the challenges related to third-party logistics?

When the time is right, scaling up so that fulfillment processes can be delegated is a must for any e-commerce business that wants to scale. But doing so at the right time is critical. Make sure you put the time in to find the right fulfillment partner. Finding one that doesn’t prioritize you or doesn’t have good client customer service will hurt your growth.

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