Flash Back Friday: MATT’S CHATS Webinar | The Connected Commerce Stack: How Modern Brands Build Seamless Operations
Welcome to Third Person’s Flash Back Friday series, where we take a look back at previous episodes of our webinar series, MATT’S CHATS.
MATT’S CHATS is a webinar series bringing together supply chain experts, e-commerce brands, and tech professionals for a dynamic panel discussion on the latest news in logistics, fulfillment, and beyond. Moderated by Matt Hertz, the founder and CEO of Third Person, each panel features one leader from a 3PL, brand, and tech company.
In this FBF webinar, Matt was joined by Kyle Thompson (Co-Founder, Encore Fulfillment), Dipti Desai (CEO & Co-Founder, Crstl), and Sean Agatep (Co-Founder & COO, Vincero). They discussed how modern brands build seamless operations.
Dive into the transcript below, or watch the episode on YouTube @ThirdPersonCo.
Matt Hertz: Thanks, everyone, for joining us. I'll maybe just give… the attendees, you know, 30 seconds or so to trickle in, to officially join the webinar. And then we will get started.
I was telling… the other panelists, so we might be a little bit lighter today on, participants, because there's a lot of, a lot of conferences going on right now. There's, you know, Bean… is it Bean Talk, or Bean… Beanstalk? Beanstalk, happening in New York, the last couple days, and, in Chicago, there's, you know, Parcel Forum, which I know has a lot of logistics folks at, obviously, and inevitably other conferences as well. So, you know, we do record these, and, share them on our YouTube and, you know, other social media after. So, we'll kind of go ahead and get started here in the interest of time.
We try to keep this to about 45 minutes, and yeah, really, really excited for September's Matt's Chat. So, for those who've participated on one of these before, or have attended, you sort of know the flow, but for anyone who's new, this is really a a webinar series where I like to bring together supply chain experts, e-commerce experts, and brands, as well as, you know, sort of logistics tech professionals for a conversation, kind of a panel, discussion on, the latest news in logistics and fulfillment and, all sorts of topical stuff. So, really excited for today's session. Three, good friends of mine, experts: We have Kyle Thompson, the co-founder of Encore Fulfillment. We have Dipti Desai, the CEO and co-founder of Crystal. And Sean… Sean, how do you pronounce your last name?
Sean Agatep: Agatub, I guess.
Matt Hertz: Okay, I could tell. Pretty close. The co-founder and CEO of Vincero Collective. So, I'll let each of the panelists also introduce themselves, share a little bit about who they are, what their businesses are focused on, what they're working on. And then maybe we can dig into a couple questions. So, maybe we'll go Kyle, Dipti, and Sean. Yeah, feel free to take a minute or so to share a little bit about who you are and what you're working on.
Kyle Thompson: Yeah, so, Kyle Thompson, located in Oklahoma City, which I like to call North Dallas, for all those around the country, and, founder of… co-founder of Encore Fulfillment, so we are, fast, flexible, very accurate 3PL for high-growth brands. Focus on D2C, wholesale, mass retail. And really, we want to be the operational engine of our partners to help them scale their business. And so we've been in business 14 years, have 300,000 square feet here in Oklahoma City, and are growing, doing a great job for our clients, so…
Dipti Desai: Cool. Matt, thanks, thanks for having me. Great to see some familiar faces as well in the attendees, or names, in any case. But my name is Dipti Desai, I'm the CEO, co-founder of Crystal. Crystal is a modern B2B commerce network, and we… connect buyers and suppliers, as well as integrate with their ERPs and WMSs. We focus today largely on EDI, API, etc, and yeah, we're very excited to be building in the space, and love, love working with, Matt, Kyle, and by extension, a lot of different, you know, brands, manufacturers, and logistics providers in the space, so… That's a little bit about Crystal.
Sean Agatep: Very cool. That leaves me. I'm Sean Agatep. I'm one of the founders of Vincero Collective. We're a men's accessories brand. We sell watches, eyewear, and jewelry, with a heavy emphasis on gifting and personalization. And I started the business with my best friends from college. We started in 2014 off Kickstarter, actually, so we've been running and scaling it ever since. That's… that's about it.
Matt Hertz: Awesome. Yeah, really, really, really fun backgrounds. I think most of you know me, but… My marketing team always gets upset when I don't introduce myself, because they remind me that, some of, you know, between the three of you, you've also brought in guests, who may not know who I am. So, Matt Hertz, the founder and CEO of Third Person. Third Person is an AI-powered platform that helps connect e-commerce brands with 3PL providers. So we work with folks like Kyle and his team at Encore Fulfillment, a really great partner of ours, as well as a couple hundred or several hundred other 3PL partners.
So, really excited to bring together these three guests and, you know, talk about different things going on in the world of e-commerce and fulfillment, and, certainly there are, there, there is a lot going on right now. So, maybe we'll start with, kind of the first question on my mind, you know, something that's, you know, very topical, you know, maybe I'll… I'll kind of guide this initial question to, you know, either Sean or Kyle, but really, you know, we'll, you know, Dipti weigh in as well, but, obviously, we can't have a podcast or a podcast, a webinar talking about, you know, logistics and e-commerce without talking about tariffs.
And, gosh, I think yesterday, you know, while I was flying, there was, you know, news out that, the Supreme Court, will be weighing the potential tariff decision, I think in November is the latest I heard. You know, it might take them a month or two to actually come to a decision, but, you know, I posted something over the weekend on LinkedIn from Polymarket, which is like a betting site, for lack of a better word. And I can post the link to it in the chat here, but I'm looking at it right now, and the probability that the Supreme Court overturns or, you know, overturned, Trump's tariffs is now at 54% chance. So it's basically a coin flip. Which is remarkable, and there's, you know, literally millions of dollars being bet on this outcome, so it's, you know, rather statistically significant.
So, without digging too deep too quickly, curious, you know, maybe start with Sean. You know, given you have an e-commerce brand, and, you know, I'm not sure where your currently producing your stuff, maybe it's all made in the US, and, you know, tariffs are a little less relevant to you, but, you know, if you're like most other brands, there's at least a part of your business that's sourced from overseas, so… curious what you're seeing, you know, how big of an impact have tariffs played a role in your business? You know, maybe what are some things that you've done to, you know, circumvent that? Yeah, I'll kind of give it to you to weigh in on that.
Sean Agatep: Yeah, well, we have a little bit of a unique perspective. I actually lived out in China for 5 years, so the story behind Vincero is we had moved out after we graduated college, started doing product development, sourcing, and manufacturing, and started their own brand. So, we have a little bit of a unique footprint in China, we've got sort of a local presence out there. So, the stuff with tariffs, honestly, at this point, from the brand side, it's… kind of feels like the weather, right? Like, you can't control it, like, it's just gonna happen. Like, you kind of have to go with the ebbs and flows with it. And the more you try to plan for it, the more it's gonna change.
So, for us, we've put more of an emphasis on simplifying our SKU catalog, really focusing on the best sellers and where we have the best margin, so we can eat prices as they influx and change. That's been the biggest strategy for us, and from the ops and logistics and demand planning side, it's the thing I've loved the best, because for years I've been shouting that we have too many SKUs, that we should… we only need a handful. And there's the conservative play now to where it's like, okay, maybe we should refine the catalog. And it's also changed a little bit on our strategy and how we're launching new products. We're in a fortunate position for us where jewelry is growing very aggressively for us, and margins and… and as you're opening up new product categories, you kind of built in more of a margin expectation, as opposed to, like, trying to salvage an existing margin profile for existing product categories.
Matt Hertz: Have you, have you seen any change, Kyle, maybe from, sort of inbound leads you've gotten, or, you know, any current customers who have, shifted fulfillment from… a non-U.S. country, you know, the UK or Australia or a market like that, you know, where they were shipping into the U.S. to a customer, have you seen, sort of a rise in leads, you know, in your business, you know, to the, you know. from these brands who are looking to move fulfillment to the U.S. in lieu of shipping, you know, via de minimis from overseas?
Kyle Thompson: Yeah, we have seen more demand for that, because, you know, the 3-2-1 is no longer really a viable option. There are some workarounds, that people are deploying. I don't know how long those loopholes are gonna be out there, and it's still a very long, window when it comes from fulfillment from another country into the U.S, and then, you know, it's a coin flip on whether that stuff will get through customs with all the changes that USPS is making. And so, we have seen quite a few inbound leads with people that just, you know, the safest, best bet for a brand right now is to be fulfilling in the U.S, with where the current administration is at, so… We've been able to help a handful of brands come on board and have a, you know, presence here in the U.S.
Matt Hertz: Yeah, I agree with that, and Sean would love to kind of hear about your sort of fulfillment setup, but, yeah, Matt's opinion here is that, yeah, I'd echo that sentiment, Kyle. I think, given the changes to de minimis, which, you know, whether we call it a loophole or whether we call it, you know, just a arbitrage opportunity, you know, six of one, half a dozen of another, but now that that has gone away. It, it, it's diff… the reasons to ship to U.S. customers from a place outside the U.S. makes a lot less sense. A lot less. And given where the current administration, you know, the Trump administration's, feelings are towards sort of this, you know, made-in-the-s, you know, onshore, etc, and frankly, like, having profit live in the U.S. versus another country is… definitely the safest bet.
So, yeah, it's, it's great to see that, you know, you've… you've had some demand there. You know, Dipti, I know… I know you're not, you know, directly focused on, you know, the fulfillment side of the house, but you certainly work with a lot of brands that are, selling, or, you know, your customers are selling through, you know, all sorts of channels, you know, both direct-to-consumer. you know, the Shopify's and the Amazons, as well as, you know, the biggest of the big box retailers, right? You know, the Walmarts, the Targets, you know, the Best Buys, and others. So, curious if you've seen, you know, as a function of, you know, changes to, like, tariff policies. and de minimis and all that, if you've seen, kind of, shifts in how your clients are shipping, right? Are there certain channels that have become more popular, yeah, what are you… what are you seeing, you know, in the, in, in your, ecosystem of… of clients?
Dipti Desai: Yeah, yeah, definitely. Very much echo, sort of, what Kyle, you said, and Matt, what you were pointing out in terms of some of those patterns. And then broadly. more focus on lowering total cost of ownership for any system, any service, you know, has been a big, big focus. And also, what you said, Matt, earlier is, an emphasis on operational excellence and being more numbers-driven. So I think those are, just broadly speaking, those are some of the shifts that we're seeing.
Matt Hertz: That's great. Yeah, and you know, Sean, I, I'm actually just poking… poking around on your… on your… on your website now, and yeah, I didn't… I didn't know that you, had sort of bracelets and necklaces. I… I know your watches, right? That's kind of what you guys were famous for, and, you know, probably your hero product today, but, you know, I'm curious from your… you know, obviously feel free to share what you're comfortable with, but, curious to kind of understand, like, what your fulfillment network looks like today. Is it… mostly in the U.S, are you fulfilling yourself? Do you work with a third party, a 3PL? Yeah, we'd love to kind of, learn about that.
Sean Agatep: Yeah, we, so, we've been through the gambit. At one point in time, we had, like, 4 fulfillment centers across the world, and did everything like that. In the past few years, we've just simplified everything. We've got one 3PL. out of New Jersey, we do a lot of personalization and engraving, so we need laser engraving and the ability to be able to customize everything we do, because gifting is such a large presence. So, in a way, I don't know, I think it's a tough time for brands that are… trying to aggressively scale despite the headwinds. We're at a life cycle of the brand to where we're comfortable with the stage of growth it's in, we're comfortable with the rate of growth, and we're comfortable with just everything being simpler.
So the brands that were kind of over their skis a little bit, that I've been talking with, with trying to take advantage of all these different things to try to be able to grow and scale and, you know, all these hacks, it's… it's more challenging for them, we're just… from the Vincero side, it's just a simpler… simpler shipping profile, right? Like, we air freight everything in. We have watches and jewelry are very easy to ship. They're small parcels, so, yeah, it's pretty simple, simple profile.
Matt Hertz: That is interesting that you're using your freight. I mean, I guess it makes sense, just given that you can put a lot, you know, stack a lot on a pallet or in a container. Right. And I think from a cash flow perspective, you know, while air freight obviously is more expensive than container shipping, you're getting product, you know, to the U.S. four weeks faster. And that… and that sort of helps with your speed to market.
Sean Agatep: Right.
Matt Hertz: Yeah, that's great. I just put in a chat here to those listening. Well, I've posted each of their LinkedIn profiles, so you can link to them and connect with them. Offline. But also, if you have any questions, for the group, feel free to… well, I guess you can put them in the chat, or, there's a… there's a Q&A tab on the bottom, which you can put them in, and we can answer them in real time or answer them at the end. But I guess. We do have a question here, so we will get to that. The question is for Sean. Was there a cost simplicity trade-off, especially when it comes to last mile shipping?
Sean Agatep: Yeah, that's a good question. We started to just have to charge more for shipping, and instead of having a few different, shipping classes and trying to… trying to game the best… best way to deliver to customers in all these different areas. we just have… we simplified our shipping classes and, started charging more for shipping, because it just costs more. There's no… there's no complexity there, it's just, you know, instead of having 3 or 4 different rates, we've got, like, 2 that we run with.
Matt Hertz: Yeah, I like the simplicity approach, and I mean, gosh, like. I think you said you were working with 4 different fulfillment centers, that's a lot. That's a lot to manage. Yeah, yeah.
Sean Agatep: And we were… we weren't big enough to justify that. Right? That was the other thing, too, is, understanding our size and the scale that we needed, it was like, okay, we could… if we simplified all this, we would have way better control, to… to Kyle's point as well, just better control of our numbers, better control of all these variables, less to… less that could go wrong.
Matt Hertz: Yeah. Kyle, I know you mentioned at the top in your intro that you, you're in a… do you say suburb of Dallas, or North Dallas, in, Oklahoma City? You know, I get the question a lot of, like, you know, optimizing or, you know, picking… picking the best, the best part in the country to fulfill out of. You know, Sean is fulfilling out of, I think you said New Jersey, you know, the Northeast. Obviously, there's a lot of population there. That makes a lot of sense. You know, you're… you're in the more kind of central region of the country, and you know, we work with a handful of 3PLs that are kind of in that Missouri, Oklahoma, you know, even Dallas. area, and it makes a lot of sense because of its sort of central proximity to a lot of the population.
So, you know, as you, as you're kind of educating, maybe, prospects or, you know, potential clients on you know, Oklahoma City, which is… maybe I'm stereotyping a little bit, but it's probably a place that many have not been to. Right? Versus, you know, a New Jersey, or a Chicago, or a Dallas, or a Southern California, you know, using air quotes here, a more traditional market for fulfillment, but, you know, given that I… I understand why your region is a really attractive region to fulfill out of. So, maybe, like, what are… what are one or two, or, you know, a couple points that you're sort of telling, you know, prospects and clients about, you know, the, optimization and kind of fulfilling out of, you know, your region of the country.
Kyle Thompson: Yeah, so, you know, it all starts with shipping profile. So, one, we look at, you know, order mix and see where the order mix is. And so, if a client has 50% of their orders that are going to the Northeast, then we're probably not a great fit for them, and they should probably be fulfilling out of, like, New Jersey. But a lot of clients are fulfilling nationwide, and usually the top states are New York, Texas, and California, if you're looking at, like, the order mix. And so, what stands out if you're shipping from a central state like Oklahoma, Missouri, Texas, is that our zones are very competitive in that we don't get the… a lot of the higher zones. Like, when we look at our order mix and where we're shipping for our clients, I think only… like, maybe 5 or 6% is above Zone 6.
And when you start getting into those higher zones with the carriers, that's when the time… the cost really starts to go up with the carrier, and then also the time in transit. Now this is especially, like, important when it comes to, like, the regional carriers, because that's the main… like, with some of these new discount carriers or regional carriers that are in this space, is that… the main complaint with those carriers is that when you get a really long zone, like, if you're shipping from New Jersey to California, it's like zone 9, you could look at, like, a 7 or 8 day delivery time. But if you're centrally located, you don't necessarily have those really high zones, and so the transit time is much more reasonable in line with what the consumer is expecting.
So if you're looking at just, like, a simplified approach, which I'd argue makes a lot of sense, a lot more sense for a larger portion of brands than people think. Like, everybody thinks you have to be multi-node, like Sean was talking about, but then if you really look at the benefits of simplifying the operation and not having to carry extra inventory to have multi-node, like, the central U.S. is a great place, depending on the order mix, to do the fulfillment from.
Matt Hertz: Yeah.
Kyle Thompson: Go.
Matt Hertz: Yeah, no, for sure. no, that's great, and, and, yeah, it's, it is interesting, right? Because when you think about the U.S. population, unless things have changed in the last couple years since I've been kind of seeing the sound bite. you know, about two-thirds of the U.S. population is kind of east of the Mississippi, right? So, like, almost, you know, directly down the center of the country, two-thirds of the population would be on the eastern half of that. So, you know, that's why, to your point, Kyle, you know, being in that corridor where you are does make a lot of sense.
Obviously, if you're selling, you know, swimsuits or surfboards, it might make sense to be in a location that's, you know, more coastal-centric, right, in, you know, Southern California or whatnot, but if you're a a typical… or servicing a typical e-commerce brand, and, you know, I don't mean typical to sound like a pejorative, but a brand whose distribution kind of follows the population, pockets in the U.S, which, you know, maybe, Sean, you know, your brand might look more similar to that. You know, it certainly makes sense to, you know, be in that central region.
Dipti, I want to go back to you, because, you're working on something that is, in my eyes, very, very complicated. Almost, almost, almost very scary, right? Like, EDI. So… and, you know, I love your approach is, you know, you are, you know, this probably doesn't do it justice, but, you know, you are a modern EDI company, right? You're, you're not one of these kind of old-school, you know, again, I… I get scared when I think of EDI, and the number of 3PLs I've worked with, you know, way back when, that were using EDI, and it was a really difficult integration, process.
So… I'm curious, like, from… from Crystal's perspective, like, what does… what does good communication look like between an EDI, company, or, you know, Crystal specifically. and, you know, a 3PL and a brand, right? Like, it… it is sort of that… that three-way… communication, and, you know, I love that there's a stakeholder from, you know, a brand and a 3PL on the call. So, I mean, I'm… I guess I'm just curious, like, what… what has made Crystal so successful and, you know, able to pick up, you know, such great traction among, brands, you know, in your first few years here?
Dipti Desai: Yeah, still, yeah, definitely relatively early days, even though, you know, startup is dog years, too, so… so definitely feel a bit of… bit of both. But… but I think, fundamentally. the approach we've taken is, first and foremost, before we even started building, before I even architected kind of that first version of what became the crystal product in the Crystal platform.
Obviously, I think you know this, Matt, but for the broader audience, my background is in building data products, right? Data software products. And with EDI, it was like any other data problem where I first studied you know, obviously I knew about it, and had worked with some parts of it in the past, but really sort of took a fresh look of first principles kind of approach in terms of what is it, why is it that you know, not been… Why has it been brittle for so long? What's changing in the world that… makes it more relevant or less relevant, right? Like, so there was… it was just… I gave myself a lot of homework, if you will, at first, and really, sort of, jotting down the questions and then searching the answers, right?
So I think there was a lot of, kind of, that thought of… that sort of thought and work that… that went into it first, and obviously, you know, didn't do it sort of holed up in a room, spoke to a lot of very sort of smart practitioners and people who had a lot of scars and insights and wisdom to share, right? Really had my perspective, but also really sort of developed it and honed it by talking to a lot of people on the ground. And I think some of that, or a lot of that, you know, shows… hopefully shows up in the product, and in terms of how we build things, and the things we chose to add to the product, and the things we've chosen to not add to the product and the platform just yet, and so on and so forth.
So… so it's… it's a little bit of a cliche, but it's really… deeply understanding the workflows and the pain points before getting too excited by any particular feature, or AI, or API, or any sort of bias of that sort, if that makes sense. And so, from a connectivity mechanism, I think it's just… Really important for everybody to internalize that you know, in 2025, and now almost 2026, sort of digitization is not optional. It's an adapt or perish, sort of a timeline that we find ourselves in. And EDI, you know, for what it's worth, I always say it's… it's a language and it's a protocol. And it's sort of orthogonal to the connectivity, right? The connectivity is, you know, API, much like, you know, with APIs even, it's like, is it REST? Is it GraphQL, right? Like, there's many different flavors and philosophies that go into you know, building an API, even.
So it's the same thing with EDI, and whether you're connecting via ES2 or VAN, and you know, these are all sorts of, sort of the… the English language analogy is what I use the most often, which is. the English language gives you what? It gives you a bunch of rules for how you construct sentences and questions, right? It says nothing about once you've constructed a given sentence or question. Are you texting that question? Are you handwriting that question? Are you sending an email with that question or sentence? And so on and so forth, right? So I think for that reason, really understanding kind of the difference between what's a protocol and a format versus what's a connectivity and… and the importance of, up-leveling systems to really sort of adapt ourselves to this. again, cliched as it sounds, but the world's changing very, very fast, and so… and the best systems, the best businesses are going to be interoperable and hyper-connected. And so, just up-leveling all around is the name of the game, I think.
Matt Hertz: Love it. Kyle, what are some of the challenges that you see your brands facing the most? You know, I know we talked about tariffs, so maybe kind of leaving that one aside, like, is it a… is it… is it, like, technology? Like, is it, is it sort of, you know, EDI? Or, you know, connectivity broadly? Is it, is it trade compliance? I don't want to lead the witness, but yeah, like, what are… what are some of the other things that you're seeing your brands struggle with as it relates, or sort of intersects with, with your world and your responsibilities?
Kyle Thompson: Yeah, so, you know, I would say, especially when they get into the wholesale and are shipping to large retailers, like, it gets really complex. So, Dipti was talking about talking with people that have scars from working with EDI, and it can be daunting to… learn how to break into wholesale. Learn what that means for… you know, you're forecasting for inventory. It works different with different vendors, whether that's Target, Walmart, Dick's, you know, the gauntlet.
And so, really, when you're scaling that brand and you add that complexity of wholesale is, is where we see brands really take on a learning curve, where they have to get a lot of knowledge fast, and if they don't have the right information, it can really hurt them if they've over-ordered, or they misunderstood what, you know, the routing guidelines were, and that's where we try to come in and partner and help the brand understand what the requirements are going to be, depending on the vendor that they're shipping with, and hopefully we have a good EDI partner, like, and Crystal, like Dipti, that can help us along the way. But that's a… you know, outside of tariffs, I would say that is, the biggest one, is when the brands are trying to go wholesale, mass retail, really, and figure out what that means for their brand, is one of the biggest challenges that we see today.
Matt Hertz: Yeah. Sean, I'll ask this next one to you, but, Kyle, you might also want to chime in, but, yeah, Sean, like, how are… how are consumer expectations evolving around, you know, shipping and delivery? You know, we talk ad nauseum about, you know, kind of the Amazon effect and, you know, same day, one day, two day. You know, there's been a kind of a wave of, you know, modern carriers and couriers and, you know, there's companies out there who, you know, help, help, you know, 3PLs and brands kind of leverage, you know, alternative carriers and regional, carriers. So, like, are these, are these companies that, you're, you're using, you know, with your current 3PL? And I guess just broadly, like, how do you think of, you know, as the COO, you know, you're obviously responsible or you have a team that's responsible for, kind of, that delivery experience. So, like, what is your… what is your philosophy on, like, fast shipping or, you know, quick shipping to customers?
Sean Agatep: Yeah, authenticity. Like, I think that's what we try to communicate to customers. With our product, a third of our products are personalized and engraved, so there's already a lead time there to be able to engrave those, and build that out for customers. So… with shipping volatility and pricing and everything like that, that's one of the reasons why we simplified the shipping carriers and classes that we have, because then it's known, okay, this is the expectation that we have, and this is what we can deliver on. And being able to authentically communicate that to customers of just, listen, like, we're… we're trying our best, this is just what the expectation is. We are not an Amazon, we are not a product that can quick-ship, that you can get there the next day. If you want a product like that, like, we're just not you, and being able to effectively communicate that, allows just… just… I mean, authenticity leads to simplicity, right? Like, that's… that's kind of just, like, been the philosophy the past couple years with the team.
Matt Hertz: Yeah. Yeah, I love that. Kyle, what do you, like, what are… I mean, you work with dozens of brands, and they all have different shipping policies and expectations, so if you kind of, like, threw it all into the hopper, what would it kind of yield in terms of, like, you know, the average or the typical you know, delivery experience?
Kyle Thompson: Yeah, I think, you know, I think the authenticity point is a great point. Like, the consumer wants to know what the expectations are as far as how quickly something's going to arrive, but I think there's, you know, the Amazon effect of a couple years ago, where it had to be today. I think we're seeing a softening of that, where people as long as it's effectively communicated in cart, whether it's 3 days to 5 days, that's when, you know, the consumer… I don't think we really see that much of a conversion drop, from that happening.
And then… so I think if you looked at the brands that I'm working with today, and kind of what the sentiment of the market is, and the reason that there's a bunch of regional carriers and discount carriers that are coming to market is because that has soft… that two-day delivery expectation has softened to where if the consumer knows it's going to arrive, and they know the general time frame of when it's going to arrive, and it's with a carrier that they can trust, then, then it's a… it's a… it's a viable option. You know, I will say that this year for brands and for the consumer, I think it is the year that there's been the most downward pressure on pricing and competition in the carrier market that I can remember in, in this space. I mean, we have UPS and FedEx, and then USPS, who have been the major players this, you know, for as long as anybody can remember. But now we have Amazon entering the space. And then a bunch of regional discount carriers are entering the space, and they're all fighting for market share. And I think it's a really good thing for brands, and for 3PLs, and for the consumer, because I think it's going to drive down prices, and then also, create a better product.
Matt Hertz: Yeah, no, it's been great to see the competitive pressure, and, you know, UPS and FedEx still have significant market share, but it's changing quickly, right? And, you know, I remember as recently as, you know, 10 years ago when I was living in California, and, you know, OnTrack was kind of the California regional carrier. They were little known. And, you know, OnTrack has obviously done a lot over the last few years in acquiring the East Coast competitor, Lasership, and I think just yesterday or the day before, they announced that they're coming out with an Express product. And now they're no longer a regional carrier, they're basically a national carrier, right? They can service, I think, all but maybe 2 or 3 states, you know, within the lower 48. So maybe it's, you know, 5 or 6, but they can service most of the population. So they've come a long way, and as you said, Kyle, I mean, it's great for customers to you know, pay less, and get, you know, equal or better service in many cases.
Kyle Thompson: Right.
Matt Hertz: Dipti, a question for you, and I know we only have a few minutes left here, but, you know, I'm sure you can talk for, a long time on this one, but, you know, just in the last week, we've seen a couple… really big headlines of, you know, broadly AI companies in the logistics space raise a lot of money, you know, Augment, which was founded by, Deliver's, founder, Harish Abbott. I think they raised $85 million, $80 million, a lot of millions, and then, Happy Robot also raised a pretty big round. I think that was about $40 million, totaling about $130 million in total. So, you know, given, given you are, also in the sort of logistics tech space, like, clearly, there's been a huge push by, you know, investors and, frankly, entrepreneurs in building AI solutions and logistics.
So, like, what are your… what are your thoughts on what's happening? You know, we're all… we're all aware of AI, but you know, there's been a lot of interest, particularly in logistics, so… and, you know, I know you raised some money, earlier in the year, you know, in part from Shopify, which must have been super exciting for you and the team. So, yeah, what are you… what are you seeing as it relates to, kind of, investment in the logistics, you know, tech and AI space?
Dipti Desai: Yeah, great, great question. I mean, my view is rising tides left all boats, and so that's great, for the space, and I think, you know, logistics is probably, if I'm just sort of imagining myself in some of those rooms, it's probably also seen as sort of that last frontier where AI can really come and disrupt and make an impact, right? So I'm obviously excited for these companies, and more excited to, you know, raising money is really the start, not the end, and so excited to see, sort of how they allocate that capital and the products and the services that they bring to life in the coming months and years.
I think there's also, I was, you know, thinking about this a little bit, the other day before you know, before today's webinar, is… it's also interesting to potentially see a lot of these companies turning into robotics companies, if that makes sense. I mean, even when you look at what's a little bit topical right now with Elon's, you know, comp structure and things like that, obviously I don't know too much about it, but just from reading in the news, I think it's sort of hinging on and betting on Tesla becoming the robotics company in the future, right? So I think… so I think there's something just generally very interesting happening in the macro, so yeah. Definitely, exciting to see. I think it's long overdue, the recognition and the investments and the… and the backing, so yeah, I'm excited to… hopefully these companies go make a dent in the universe.
Matt Hertz: I love that. Yeah, huge, huge supporter of, the rising tide, lifts all boats. It's another JFK quote, I think. I think so, right? Or am I… it sounds like it's something that JFK would say, or Einstein, somewhere.
Sean Agatep: JFK or Abraham Lincoln, one of those two.
Matt Hertz: Yeah, yeah, exactly, right? But, yeah, just in the couple minutes we have left here, I do have, I do have one more question, maybe I'll kind of pose it to, to, to each of you, kind of in rapid fire, but, like, what is… what is the most, or one of the most underrated investments that a brand can make to avoid, supply chain headaches?
Sean Agatep: I'll go first. Investing in the infrastructure to understand your numbers. That's… that's been, I think, the biggest learning is when brands are scaling, and I think it's changed a little bit, when we were scaling Vincero aggressively, like, the last thing people thought about was ops and logistics, and now, because, like, there was just a whole lot more margin for error. But understanding your numbers, understanding the metrics, and everything like that will… is the most impactful thing for us, especially on the ops and logistics side.
Matt Hertz: Love that.
Kyle Thompson: I mean, selfishly, I want to say find a 3PL partner you can trust and can scale your business, but I will…
Matt Hertz: Great answer, right?
Kyle Thompson: I'll echo what Sean said, is that, I mean, that's a… that's a piece of it, but then you… you have to work with that 3PL and know the full… like, the full picture of your ops, and what your numbers truly are, so that you can, price and scale, effectively as you're growing the brand.
Dipti Desai: Yeah. Definitely, yeah, definitely echo that. I think just having a lot of discipline around numbers. And related to that, which is probably also related to what Kyle is describing, is actually also having folks on staff who understand operations. I can't tell you how many times we get a support ticket from a customer, from a user who says, I just started last week, and I am now been charged with filling out this shipment notice, and I don't understand anything. I've never done retail fulfillment before. Please don't do that. This is serious, you're serving your customers, please take it seriously, please make the investments. Yeah, that's what I will say.
Matt Hertz: All of that. Yeah, I, I would agree with all that. Yeah, the data, especially now with the… things changing so quickly, and you know, small changes can have big impact. It's, it's now more than ever important to really understand, you know, the economics of your business and, you know, all the… all the different assets of, of, of one's business. And certainly, finding a great 3PL partner is, an important decision, you know, as I say all the time, it's kind of like a marriage, you know, the relationship between a brand and a 3PL. So, just like you want to find, you know, the right person to… to marry, you know, as a brand, you want to find the right… the right 3PL to work with, so…
Thanks everyone for joining today. This has been a really fun conversation. Thank you, Sean and Kyle and Dipti for taking some time out of your days. We have recorded this, so we'll be sharing it afterwards over email. It'll also be on our YouTube channel, so for those who couldn't make it but registered, which is many of you, you will get a recording. But thanks, everyone, for joining, all the attendees, and thanks to the three of you, panelists for, contributing your insights today.
Kyle Thompson: Appreciate it. Thanks, Matt, appreciate it.
Sean Agatep: Take care, everyone. Thanks, Matt. Bye.
Matt Hertz: Thank you.
Kyle Thompson: Thanks, guys.
