We Built A $6M 3PL Company In 3 Years

$500K
revenue/mo
3
Founders
15
Employees
MyFBAPrep
from Coral Springs, FL, USA
started August 2018
$500,000
revenue/mo
3
Founders
15
Employees
489K
alexa rank
1.57K
followers
market size
$4.19B
avg revenue (monthly)
$500K
starting costs
$17.2K
gross margin
40%
time to build
7 months
growth channels
Direct sales
best tools
Airtable, Instagram, Google Webmasters
time investment
Side project
pros & cons
35 Pros & Cons
tips
3 Tips
Discover what tools Tom reccommends to grow your business!
Discover what books Tom reccommends to grow your business!
Start An Amazon Fba Business

Hello! Who are you and what business did you start?

I’m Tom Wicky, Co-Founder of MyFBAPrep, a nationwide network of 3PL (third-party logistics) warehouses, along with my partners Bart Boughton and Taylor Smits.

Founded in 2018, MyFBAPrep is an asset-light eCommerce network with over 40 warehouses and 2 million square feet of warehouse space. We help eCommerce companies sell on Amazon and fulfill their omnichannel orders to customers.

Our network is powered by Preptopia™ — a proprietary SaaS-based platform that enables sellers to manage orders, inventory, and billing and have complete visibility of their products across all nodes in our network.

We have two main services:

  1. Amazon Prep — We help Amazon sellers get products into Amazon quickly and efficiently, which includes standard FBA Prep (barcode labeling, polybag or shrink-wrap), as well as kitting (variety packs), bunding (multipacks), etc.
  2. DTC Fulfillment & eCommerce Services — We integrate with major shopping carts to help them with their omnichannel direct-to-consumer fulfillment from all major channels including the customer’s websites, Shopify, Walmart, Etsy, etc. Other services include subscription boxes, returns management, and B2B/retail services.

Our business is completely self-funded/bootstrapped and we’ve grown 1000%+ annually year/year since inception. We’ve grown revenues from zero to a $5 million+ run rate annually, with no outside capital investment. Since inception, we’ve processed over 4 million products through the network with a Gross Merchandise Value (GMV) of over $1 billion.

we-built-a-6m-3pl-company-in-3-years

What's your backstory and how did you come up with the idea?

Early Ecommerce Experience

I spent a large part of my career (10+ years) working and living abroad in Europe and Australia managing digital businesses for private equity firms. I’ve been in eCommerce since 1999 when I first opened my eBay account (which is still active today).

In 2013, I got an early start in the Amazon space with a few German programmers and launched a very early dropship model in the apparel industry. We licensed a catalog of 350,000 trademarked designs with images ranging from comics like Batman and Superman to pop culture icons, movies, and TV shows. The strategy included printing the designs on t-shirts, hoodies, tank tops, baby onesies, etc. We partnered with a firm that had acquired novel print-on-demand printing presses for clothing. That allowed us to sell the items online before printing them -- thus eliminating the need to carry the inventory cost burden and maximize cash flow.

The team used sophisticated ETL data transformation and quickly got very good at programmatically generating product listings, managing listings, and listings optimization. We pushed over 1 million listings with variations into Amazon, ranking them in organic search. The first month we did $30K in sales and the businesses grew from there.

Ultimately we decided to shut down the business due to Amazon’s heavy-handed tactics that had us spending more time documenting seller case appeals, eating customer returns, and fighting for our revenues being held in purgatory by Amazon, rather than building the business.

Launching MyFBAPrep

Bart and I met working together on an ad-tech startup years ago and had discussed starting something together and jumping back into eCommerce. Bart knew Taylor from his days in New York. Taylor was building an eCommerce business and was excited to join in. We thought about selling products ourselves and quickly realized there was nobody that could do FBA Prep at scale and handle the DTC fulfillment in parallel. So we set off to build it.

The asset-light business model solved the scale problem for us and kick-started MyFBAPrep. By partnering for scale versus buying/owning the warehouse asset we could have virtually unlimited square footage and a larger product (capabilities) portfolio by bringing multiple partners together. Much like Airbnb is the largest hotel operator in the world without owning a single hotel, we wanted MyFBAPrep to be the largest network of warehouses without owning a single warehouse ourselves.

With our collective 20+ years of eCommerce, management, and product development experience we had everything we needed to get MyFBAPrep off the ground.

Take us through the process of getting the business off the ground.

We knew we needed a software asset to manage the complexity of multiple customers with millions of products across multiple warehouse nodes. We also knew there would be no “off-the-shelf” products to do this. We had to build a proprietary cloud-based technology that could virtually connect sellers and warehouses and provide real-time analytics, tracking, messaging, inventory visibility, and unified billing. That’s how Preptopia™ was born.

we-built-a-6m-3pl-company-in-3-years
Early days of the MyFBAPrep business in an Austin AirBnB doing some Preptopia prototyping

Looking at the resources we had at the time, the decision was made to outsource the development of the platform. Choosing the right vendor from the start was critical. We were blown away by the references for our current dev partner. One reference went so far as to say: “What do I think of them? I think they’re like that little private island you find when on vacation that is so beautiful, so exceptional that you don’t want to tell anyone about it for fear that it will be everyone’s next travel hotspot and ruin it. You know, kind of like Tulum? Well, that’s these guys”. We were sold from there. It’s been an incredible partnership thus far. (That’s a 404 - you didn’t think I was going to share the name did you?).

we-built-a-6m-3pl-company-in-3-years
Preptopia dashboard view

The team knew we needed to sell something quickly to prove market fit, so we built out a quick and dirty marketing website and began to rank it organically, for what was then a still very niche “Amazon FBA Prep” set of keywords. To help here, we engaged a small, scrappy web development shop, onshore this time, with expertise in lead generation. Together, we were able to get MyFBAPrep.com to rank on the first page, above the fold, for many of our top keywords which were critical in driving early revenue.

Describe the process of launching the business.

Like a lot of businesses, MyFBAPrep was started as a side hustle. We all had other commitments and income requirements, so we needed to push it along in our downtime and try to prove market fit first and foremost.

In the beginning, our “product” was our warehouses and the delivery of our products to Amazon was essential. Our Co-Founder, Taylor, and others have onboarded and launched warehouses from scratch building workstations, creating workflow processes, and everything in between. Early on we had to train 3PL teams on Amazon Seller Central and the massive prep handbook of how items needed to be prepared to send into FBA. Anything needed by any warehouse to be successful was what we solved to get traction. We had people on the team slapping stickers and helping push orders out the door, scanning inventory, troubleshooting computer issues, buying workstations (on Amazon for a bit of irony), etc.

We started with one local warehouse in South Florida, tested the model, and dug out the friction points for sellers using this test node. We also had no minimum number of units or dollars back in the day to get started. Only when we got better at pushing products through the system could we start to focus on volume or profit margins.

we-built-a-6m-3pl-company-in-3-years

we-built-a-6m-3pl-company-in-3-years
Early prep stations at a warehouse doing a large kitting job for artistic prints

We had guys renting trucks and buying shelving and racks off eBay, then picking them up at 11 pm and setting up warehouse space (thanks Paul!). In the early days, before we had buying power, we worked on razor-thin margins and did anything and everything to help our warehouses get products out the door.

It wasn’t always easy. Just as we were learning our side of things, our warehouses were also learning how to scale their businesses to handle the Amazon demand on the fly. Before the Preptopia platform was fully functional, we spent the majority of our days wrangling warehouses for performance.

Over the years, we’ve had to resort to some creative tactics to drive performance including the time we shipped a seven-foot teddy bear to the executive team of a 3PL with a note begging them to finalize some orders. Hey, whatever it takes for our customers, right?

we-built-a-6m-3pl-company-in-3-years
A 7-foot teddy bear we sent to a warehouse exec team looking for an uplift in performance

Since launch, what has worked to attract and retain customers?

Our Customer Success Team deserves a ton of credit. They’re incredible and a powerhouse when it comes to handling our account management, customer onboarding, warehouse onboarding, Preptopia training, inbound customer service requests, and more. Customer service is one of the major ways we differentiate ourselves and keep winning. Our clients are extremely important to us.

A good portion of our growth has come from referrals from existing customers and warehouses. If you take care of your constituents, good things happen.

From the lead-gen side, we have been blessed to build this business organically with little to no marketing spend. We created the category and chose a keyword-rich domain which helped us rank well on the SERPs. We have made very few above-the-line marketing investments.

Some of our best practices include:

  • Email -- Targeted, personal emails sound ridiculous but it works. How do you start your workday? Probably in your inbox, right? You’re not alone. You need to be smart and responsible with it, but it works.
  • LinkedIn -- With more than 774 million users across 200 countries, chances are there are several new business opportunities out there just waiting for you to reach out to them. We built a multistage funnel with some pretty sophisticated tech behind it to continuously mine LinkedIn for opportunities and meet people in our space.
  • Referrals -- A good portion of our growth has come from referrals from existing customers and warehouses. If you take care of your constituents, good things happen.

How are you doing today and what does the future look like?

We are continuing to expand our role in the 3PL world. Currently, we are building out Preptopia capabilities and are working to integrate the technology with things like EDI (Electronic Data Interchange) and other common WMS platforms (Warehouse Management Systems), which will allow us to push and pull data between partners for additional advanced inventory tracking and order management. We’ve also added real-time chat with all warehouses by PO#, which has proven to be very valuable for us as it allows customers visibility on the warehouse floor as their products are being prepped, packaged, and shipped. We have built logic into Preptopia to facilitate this. Shift from own warehouse to a nationwide network.

In addition to Preptopia, we are expanding internationally. We have recently launched three nodes in Canada as well as one in the UK. Germany and Australia are on the roadmap for later this year and in 2022.

Sell something FAST. In my eyes, you don’t have a business until you generate revenue.

We are also looking to offer an Amazon Prime-like service on the DTC fulfillment side of the business. Amazon is setting the standard and the customer expectations for eCommerce with 1-2 day shipping and free returns. Our customers, to be relevant long-term, need to offer the same. To make this a reality for them we are opening up new programs including:

  • Aggregated postage rates - This leverages our favorable postage rates across our network so customers can trust they have the most cost-effective solution out there.
  • Cross-docking between nodes - We will ingest inventory in one warehouse and cross-dock it for our customers to the relevant facilities.
  • Multi-node DTC 3PLs - We are working on expanding 3PL partnerships with multi-node networks themselves that allow us to colocate and track inventory across two or more facilities on the same WMS for a Prime-like experience.

Through starting the business, have you learned anything particularly helpful or advantageous?

The eCommerce market as a whole has been massively accelerated online due to the COVID-19 pandemic and right now, everyone is shopping, playing musical chairs, and looking for a partner before the music stops.

If you want to start something, read EVERYTHING you can on the topic. There are no excuses for the lack of information today.

Upstart DTC brands that place a premium on customer data and satisfaction are slowly chipping away at the traditional conglomerate-and-distributor model by building relationships with the end-consumer. Companies like WarbyParker, Casper, Dollar Shave Club are leading the way along with tons of others that focus on the customer and that 1:1 relationship. For our customers, we become their value-added consultant to help them define, refine and accelerate their path navigating this new landscape.

Speed and customer service are the most important things in our space and are closely related. Moving customer’s products in and out of our facilities to Amazon is the number one metric we are valued on in performance. If you treat a customer well and move their products through the system quickly and correctly, they will not churn. Take care of the customer is Rule#1.

Hiring , retention, and culture are mission-critical. The early days of a startup are challenging and it’s not for everyone. You need to be very good at spotting talent quickly and able to tell your story in a way that makes people want to join you on the journey. Learn how to screen for factors that tip-off whether the person can handle the stress and pressures of the fast-paced startup life. Once they are on the team, invest in them. Allow them to create an environment for themselves to thrive.

What platform/tools do you use for your business?

Our team is fully remote, so having strong internal tools to drive daily business and streamline communications is a must to ensure everyone stays on the same page when it comes to priorities, company values, milestones, upcoming launches, etc.

Some of our most-used tools include:

  • Slack: Everyone in our network has access to the Slack channel where we can chat with each employee individually, by department, or as an entire team (cue the ridiculous gifs and book club conversations).
  • Asana: Each team (i.e. marking, sales, bizdev, etc) all have their Asana boards where we can track the progress of the tasks they’re working on, be notified when something is ready to review, and provide in-the-moment feedback on all assets. It’s a game-changer for organization and productivity.
  • Airtable: This is one of those tools where its versatility proves to be a necessity in our business. We use this platform for everything from our media and VIP lists to KPI dashboards and idea generation.
  • Trello: another great project management tool we use that is inexpensive and can be used as a Kanban Board, etc.
  • WhatsApp: There are no better customer sales and retention tools out there. I mean, 2 billion people can’t be wrong.

What have been the most influential books, podcasts, or other resources?

Podcasts to me are one of the best things to come out of the internet. Like YouTube, there is long-tail content on absolutely anything that you can consume hands-free while doing almost anything. Give me a long car ride and a good podcast -- that’s a happy place for me.

I also love mining the Twitter universe and I’ve found that it’s very easy to strike gold on this platform. Building a solid list of people to follow is key. By following people in and around your niche, you can screen for noise and stay updated on the latest and greatest industry news. Plus, the curation of your feed will allow you to go down many rabbit holes daily for you to come back up a smarter individual (or have plenty of random tidbits to chew on).

Advice for other entrepreneurs who want to get started or are just starting?

If you’re thinking about a career path as an entrepreneur and have weighed the pros and cons to see if that career and lifestyle is one you can handle...just do it. Get started today.

That said, I bring you my:

Top 11 Startup Tips in the Garden of Bezos.

  1. Go deep. If you want to start something, read EVERYTHING you can on the topic. There are no excuses for the lack of information today. You have to be educated on the niche/space so you can speak to prospects, mentors, vendors, and colleagues with authority. There is nothing worse than a half-ass entrepreneur looking for a free handout. Do your research, as all of the information you need, is out there - and if it’s not, that’s probably a clue in one direction or another as well. Put the time in. No days off.
  2. Be honest, trust yourself. You always have to trust your instincts. Don’t get fooled by confirmation bias. If it’s not this idea, it will be the next one, but be honest with yourself. Bootstrap and hustle. From there be resourceful as hell and don’t take no for an answer. Laser focuses on the problem you are trying to solve. Once you identify that filter, use it and let it guide every decision throughout your business day. Try off-peak hours, weekends, or nights when people have less noise. You’ll be surprised at what you will get back off-peak. And don’t forget to say thank you.
  3. Sell something FAST. In my eyes, you don’t have a business until you generate revenue. That confirmation of the market paying for your product or service makes it real and makes you accountable. That first monetary exchange part is not easy - but that’s the switch. That’s when you have a business. The rest is smoke. Don’t get bogged down in the fancy business plans and MBA speak, focus groups, and people trying to take your money. Do your thing. Tell ‘em I said so.
  4. Find your tipping point. What do you need to go all-in? When can you commit and go full-time? Identify those metrics upfront. What do you need to see to prove to yourself that the business has legs? The business won’t fly unless you’re in it full-time. Jack Dorsey and Elon Musk can run multiple companies though, right? Yeah, sure, but they’re Jack and Elon. You’re not. Play the odds.
  5. Don’t be cheap. Take care of the people you meet along the way on this journey - internally and externally. Let employees share in the upside with equity. This is your company but you don’t/won’t/can't do it by yourself. Take care of the people that are helping you drive towards your vision, goals, exit, etc.
  6. Be data-driven. As sure as you are about your idea - listen to the data. Test, test, test. Rinse and repeat. Test again. Data doesn’t need to be dashboards with graphs, click rates, or ROAS numbers...it is also market trends, customer feedback, competition movements, etc.
  7. Fail Fast. No shame or harm in starting again. Just get on with it. I’m not going out via 1000 paper cuts. Neither should you.
  8. Invest in and grow your network. Find a mentor or industry influencer and learn how to add value while asking for their time or help. Give your time and expertise first to get the same in return. No free lunch. Offer to buy. Always.
  9. Find and learn the tools. There are so many tools and services out there today that can get you to your MVP and help you appear like a big company to the external world. The tools are cheap or FREE. When I started my first company we spent $500K of a $1.5M seed round on server racks, servers, routers, and a raid storage system, all to power a *website*. Yeah, it was THAT long ago (and that was actually the norm and accepted back then). NONE of that is required today. The barriers to starting are so low now...and the tools are readily available. No excuses. Go hard.
  10. Be ungodly fast and deliver killer customer service. This may be the most important one on the list. If you take care of your customer and give them a sterling experience they won’t churn. Ever. Over-index on customer satisfaction. Any. Way. Possible.
  11. Bonus Ball. Start at the top and reread these. You’re welcome.

Are you looking to hire for certain positions right now?

MyFBAPrep is always on the lookout for rockstar customer service reps and account managers. For us, customer service is mission-critical in our company as having that “white glove service” layer of insulation makes us stand out from the pack of other 3PLs that may not focus on service as sharply as we do.

We are also always on the hunt for experienced warehouse professionals with Amazon Seller Central and DTC experience. Be sure to keep an eye on our social media and LinkedIn pages for the latest hiring updates.

Where can we go to learn more?

-  
Tom Wicky,   Founder of MyFBAPrep
Pat Walls,  Founder of Starter Story

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