[Update] How This Fulfilment Company Survived To Fires, Floods And Forced Relocations

Philip Karageorgis

•

Published: October 18th, 2022

save

Philip Karageorgis

Founder, Honest FulPhilment

$2M

revenue/mo

Founders

Employees

Honest FulPhilment

honestfulphilment.com

from Xinxiang, Henan, China

started February 2019

$2,000,000

revenue/mo

Founders

Employees

Discover what tools Philip recommends to grow your business!

Discover what books Philip recommends to grow your business!

Atomic Habits: An Easy & Proven Way to Build Good Habits ... James Clear

Rich Dad Poor Dad: What the Rich Teach Their Kids About M... Robert T. Kiyosaki

Want more updates on Honest FulPhilment? Check out these stories:

1. I Built A $24M/Year Branding And Fulfillment Company [Based In China] (2021) ➜

This is a follow up story for Honest FulPhilment. If you're interested in reading how they got started, published over 2 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

Hello again! This is the 2nd article I’m writing at Start Story!

For those who didn’t read the first interview, I’m Philip Karageorgis and created a fulfillment company in China.

The main service we offer is product sourcing and fulfillment of orders for e-commerce brand owners and drop shippers internationally.

Currently, we are well behind in comparison to last time, and if numbers persist, we will likely turn over $300k for 2022. It’s a good thing as it shows it’s no positives and ups in a successful business. Anything can happen, and it can happen very quickly!

Hopefully, I can write another post in a year or two, telling all you readers how 2024 is on track to turn over $10m+!

Shit happens and there’s nothing you can do about it!

Tell us about what you’ve been up to. Has the business been growing?

The business has generally and consistently declined since the last article. Very shortly after writing it up, we had some pretty bad luck.

First, there was a fire in the neighboring warehouse, which forced the whole complex to be shut down for a few days

Following this, there were freak floods in our province exceeding the amount Henan has not seen for 1000s of years.

We were out of action for almost a month as the city was waterlogged. 80% of our client inventory was damaged and we had to refund or replace pretty much everything.

This hit us extremely hard as such flooding wasn’t covered under our insurance.

Not only did this stop us from generating any revenue, but we were also out of pocket by hundreds of thousands of $ due to reimbursements and replacements.

We also lost a few clients to no fault of our own, as understandably, they had to find alternative suppliers and fulfillment companies to send their orders to. Once they settled, most who left never returned as they had their setup established elsewhere on permanently occurred in the summer of 2021, and took us a while to get back on our feet.

Peak season helped to lift us, it was far from the numbers we were used to.

2022 saw multiple city-wide lockdowns across China, causing havoc, and adding to the already high shipping rates, shipping prices continued to skyrocket, with delays, backlogs, and shortages of shipping containers taking months to leave ports

We have witnessed ecom and fulfillment companies close one after the other in China, with fierce competition and a downturn in the economy, it’s been cutthroat. Some of the largest eCommerce services providers in China have gone into liquidation and many other businesses, in general, are shutting down. One of the contributing factors was the Ukrain/Russia war which has put even more stress on the ever-dire situation

Mid 2022, we had to relocate warehouses and moved into a new complex. The old warehouse had to be demolished. As land in China is government-owned, there is no say or choice in the matter.

Some businesses in the old complex only just finished renovating, spending well into 5 digits, to then be completely knocked down.

Although we were planning on moving, it was another unnecessary, unexpected, and early expense that could have otherwise been delayed and better planned.

Enough with the doom and gloom!

Now for some positive energy!

So, here we are, in our new warehouse, with pretty much the same stuff that has stuck with us through thick and thin.

We launched our in-house developed ERP and migrated all customers over.

This was a huge milestone for us as it was in development for over 2 years (and still is, it never ends!).

Many of the previous manual systems have now been automated and we’re adding more and more features to automate and help our userbase in every way possible.

We cleaned up our client list, and now have a smaller, but much higher quality and loyal customer base.

We moved over to Discord from Slack for our dedicated support and did away with Slack. We’re looking at creating more of a community with our clients and Discord was the best solution, plus it’s free!

At one point we were spending close to $5,000/pm for Slack and it didn’t make sense.

We started investing in marketing and outsourced the majority. We completely revamped our ManyChat bot as most of our leads come from FB via the Messenger channel.

We are very happy with the new bot system and it more than serves its purpose, it also gives us the flexibility to integrate into our app.honestfulphilment.com platform via API to assist in automating lead generation and sign-ups, among many other things.

We tried some paid ads, which didn’t perform well, mainly because it was a test and the creative we used was pretty poor. It was mainly to test traffic to our new bot setup and to make sure it did its job.

Until I’m physically present in China, no more paid ads will be run as I like to do things properly, I want to shoot MANY different creatives while I’m with the team and on the ground there. Fingers crossed, I’m expected to finally fly and arrive by Q1 2023 if there aren’t any other COVID developments or changes in international travel regulations from the Chinese government!

Our website was completely revamped and we hired an SEO agency from Q1 2022, although they have recently been given the boot as we’ve brought it in-house. Results were way too slow and it didn’t provide great value.

Ever since creating our ent and managing it in-house, we’ve seen our keyword ranking increase quickly, together with views.

Our customers are generally very satisfied and although some didn’t like the idea of change and moving over to app.honestfulphilment.com, it had to be done, and now they are set up with auto-fulfill, they couldn’t be happier!

Our customer retention and loyalty are well above industry standards, simply because we are the most transparent company in China, and treat them with courtesy and respect with nothing to hide.

Most of our current clients have been with us for 2 years on average, and unless for any reason their brands or stores completely fail, there has been no reason why they would find a competitor.

It all comes down to great customer service, if any staff member makes a mistake that results in any problem for our client, we own up to it, correct it and compensate if necessary. We truly value all of our customers, big or small, short-term or long-term.

This directly correlates to our staff retention and satisfaction, if they are happy, our customers are happy, which is the reason why a very, very small % decide to move on from HF.

You need to first and foremost understand every cog in the business. Do not outsource anything until you fully understand what’s involved with the operation at every level.

What have been your biggest lessons learned in the last year?

What have I learned? Shit happens and there’s nothing you can do about it!

You have to diversify as a result. I’ve personally started taking property investment seriously, mainly not to have my eggs all in one basket, and it’s always been on my to-do list (I also enjoy it for some reason).

Although it’s highly unlikely HF will go into administration (we’ve invested far too much money and time into it for that to happen and continue to do so), having a second, consistent and predictable income stream, while being a time-proven investment is a no-brainer.

Looking back, I can’t really of any good or bad decisions that have been made. It’s more the case of going with the flow and dodging the unavoidable 💩 that flies your way.

I wouldn’t change anything as of now, our team is awesome and so are our systems.

We need to concentrate more on marketing really and getting customers through the door, which is what we’re doing, but it takes time.

I created all social media accounts where we had no presence and started to record and upload content. I’ve been trying to do this at least once a day, but with everything else, it’s difficult. It was outsourced previously, but the agency did nothing that we couldn’t do ourselves and was useless, so I decided to do it myself.

Once I get to China, we will bring this in-house too, and hire a social media manager.

Aside from this, I’ve also started looking after my health and taking it seriously. Been going to the gym regularly for over a year now. I’ve slowed down a hell of a lot, not working so many hours and taking it much more manageable. I feel as though I’m becoming wiser and more mellow as I mature (old age is hitting me early!). I’m not so concerned about income and/or chasing anything, quite simply because I don’t have the desire.

When I was younger and even up to about 35, I wanted to conquer the world, create a huge organization, earn millions and even billions of dollars, to finally become a philanthropist.

Now? I couldn’t care less. I don’t want a fast, expensive car, a mansion, a private jet, and other materialistic possessions. Not that I ever did, but it’s more and more meaningless as I get older.

I’m happy and content as I am, I’m more like a Zuckerberg (minus the billions and banning people’s FB accounts), I have a very small wardrobe, a modest car, very low-key, and get by on the basics day to day.

Those who know me call me tight, but I say I’m a minimalist and that’s the way I enjoy living my life. But I agree, I can be tight. Give me $50 a day and I can easily live on it.

What’s in the plans for the upcoming year, and the next 5 years?

It’s all about automation. Although there isn’t much I need to do even now, and I can get by some days working only 2 hours a day - there is still so much more that needs to be done if I want to make the company the way I envisioned it, to be industry leading and innovative.

Specialize in that to offer expert advice and be an authority. You do not need to offer a multitude of services to stand out or be in demand. Do one thing, and do it right.

Our software developers are working nonstop on adding a long list of features. I expect the majority of these completed by Q2 next year

But before that, marketing is key. Customer acquisition is an issue at the moment that we need to concentrate on. Until we have a steady flow of new customers signing up, then everything else is pointless.

We are currently investing heavily in SEO as our long-term marketing strategy and will be in other, immediate result-based channels in Q1 next 2023.

What’s the best thing you read in the last year?

To be honest, I hardly ever read, I’m more into audiobooks while I’m driving. I’d say Atomic Habits was a good one, obvch Dad Poor Dad](https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194?ie=UTF8&language=en_US&tag=starterstory-20) is a must.

Those who struggle with committing to projects or tasks and lack discipline will benefit from Atomic Habits, it helps you to fight your temptations and improve your mindset.

Rich Dad Poor Dad on the other hand changes the way you think about money and income. To escape and realize the 9-5 career path is not what you should be striving for unless it’s something you are not cut out for entrepreneurship.

Advice for other entrepreneurs who might be struggling to grow their businesses?

It’s difficult to advise on these things as everyone is different. Most businesses are unique and there could be many reasons why a business owner is struggling to get grow.

Usually, however, keeping things simple is the way to go. Regardless of your business or background, you need to first and foremost understand every cog in the business. Do not outsource anything until you fully understand what’s involved with the operation at every level.

For example, you cannot outsource email marketing if you’ve never done it before. How would you know they are writing in the context your clients will understand? What’s stopping them from spamming your list with low-quality or repetitive content etc?

You have to at some point personally operate or manage at least 90% of your business, because if you don’t, how can you expect someone else to?

You’ll have no idea if they’re going a good job or not.

Go back to basics. Concentrate on a single service that you excel in and are very knowledgeable about. Specialize in that to offer expert advice and be an authority. You do not need to offer a multitude of services to stand out or be in demand. Do one thing, and do it right. Advertise that one thing, be present on social media, and get on TikTok even if you hate it (I know I sure as hell do!).

I can’t stand social media, but you cannot deny the power and leads it can bring to a business.

Finally, write down 1-3 things that you believe are causing your business to bottleneck. Concentrate on tackling them 1 at a time. Put all of your efforts into doing this, and don’t get distracted by other tasks or issues elsewhere, as this/these are the main problems preventing you from growing.

Don’t be afraid to have others look at these bottlenecks, friends, family, and even social media groups in your niche. Ask the questions, and don’t be afraid.

Are you looking to hire for certain positions right now?

We’re still looking to hire talented and very capable social media managers, so if there are any out there who are looking for a full-time position to create long-term plans, put together content, and post regularly across all of our social media platforms, get in contact! [email protected].

Where can we go to learn more?

If you have any questions or comments, drop a comment below!