Archive for the ‘fulfillment centers’ tag
If Amazon hesitates to admit that it’s possible, even as they rush to open new fulfillment centers, it can’t be easy. Of course, in the meantime, one startup wants to pick up Amazon’s slack and offer not just same-day delivery, but one-hour delivery. And naturally, it’s a product of one of their own.
Founded in early June, Instacart is the brainchild of Apoorva Mehta, an ex-Amazon Supply Chain engineer, who is leveraging his experience building Amazon’s own complex backend logistical system in the hopes of creating a more efficient back and front-end grocery delivery experience at Instacart.
So what does that mean for the user? Right now, Instacart is purely a mobile experience and is just available for the iPhone. Plus, as it’s still in the early stages, downloading is invite-only at present. (More on that below.)
While Instacart eventually wants to be Amazon.com with one-hour delivery for anything and everything, the startup is currently focusing on groceries. This means that users can tap-to-order from tens of thousands of items, ranging from produce and booze to deli food, snacks and toiletries. Inventory is sourced from local grocery stores, and Mehta has put together a fleet of trained delivery personnel, who are paid by the hour to pick up the items from local stores and deliver them directly to you — at your home or office.
The service is currently live in San Francisco, Mountain View and Palo Alto and is available between 10am and 9pm. As for the pricing? Users pay a competitive amount for items as they would were they to buy at their local grocery store, plus $9.99 for one-hour delivery and $3.99 for three-hour delivery. Obviously, this is Instacart’s main revenue stream for now, but you can imagine a whole bunch of supplementary revenue streams coming from deals, partnerships with brick and mortar stores, loyalty plans, etc.
As of right now, Mehta says that Instacart is listing prices based on several factors, including quality of store (especially for produce), proximity of store, and prices. In other words, Instacart is listing items right now based on a combination of factors, but eventually the founder says that he wants users to be able to break down the selection into categories, so that users might be able to choose their shaving cream or toilet paper based on brand, proximity of store (quicker delivery) and price.
Users can connect their credit card to the app, browse through listings, and click to add items to their shopping cart. Once users are ready to check out, they select from the startup’s two delivery options and purchase. The items are billed directly to your credit card, and when the delivery arrives, there’s no need to tip. In fact, drivers will not accept tips.
Obviously, Instacart is still in the early phases, so it’s a little too early to say whether this business can truly become Amazon.com with one-hour delivery. But groceries are a great place to start, and provide an easy way for Instacart to test out its model. The startup’s ability to have real impact will start to show as it begins to scale, though I can say from my early experience that, for those busy people living in San Francisco, it already has plenty of value.
In a business like Instacart’s, trust is obviously the big “X factor,” and the founder says that Instacart’s policy for successful orders will be those that are “complete, correct and on time,” so if an order ends up being late or incomplete, Instacart will refund it. Having this policy established from the get-go is important, as customer service will play a big role in successful development.
In the next month, Mehta plans to launch an Android version of Instacart, and bring the service to the web over the next two. As for the present, Instacart is offering free delivery on new users’ first order, and the startup will be making its app available to the first 1,000 readers. You can sign up to receive the app on the Instacart’s homepage here.
Ok guys, admit it: You hate shopping, but you know what you really hate? Shopping for underwear.
Well there’s a new brand of men’s apparel, called Mack Weldon, that is designed not just to provide a better fit for men’s underthings, but also to provide a better customer experience online. With its recent launch, Mack Weldon offers a choice of underwear between trunks and boxer briefs, as well as undershirts and t-shirts, both available in crew- and v-neck options. It specializes in basic, classic colors, and a unique fit that’s meant to ensure maximum comfort.
When I first heard about the startup, I thought it was an interesting business, sort of along the lines of Bonobos or Warby Parker or other apparel brands that have cropped up online. But the thing that really got my attention is founder and CEO Brian Berger, who previously worked at Comcast as part of its Silicon Valley-based CIM product group, as well as stints at Excite and WebMD. So what’s a Silicon Valley product guy doing peddling T-shirts and underthings for men?
When thinking about what he wanted to do next, Berger thought to himself, “What is a product I’m constantly unsatisfied with? What is an experience I’m constantly unsatisfied with?” And, well, underwear was that thing. Berger said he saw an opportunity to innovate on the product, while also creating a better customer experience. So he teamed up with co-founder Michael Isaacman, who previously worked for apparel brands like Ralph Lauren, Tommy Hilfiger, and Rocawear. And they began looking to source high-quality materials and find the best factories and fulfillment centers to create and ship its product.
So there are a few things that make Mack Weldon different, according to Berger. The founding team worked with a couple of apparel consultants who were former Nike and Adidas executives to determine the best type of fit and prototype new products. And what it came up with is actually pretty good. To start, Mack Weldon clothes are made with a signature blend of cotton, Lycra, and Lenzing Modal fabric, a super-soft, anti-microbial fabric.
It’s also put a lot of effort into ensuring the right fit and comfort for its apparel. Mack Weldon underwear is designed with waistbands and elastic in the legs that are made to be comfortable while also staying put. It’s also designed with “mesh cool zones” to breathe in places where dudes tend to sweat. (No more swamp butt!) T-shirts have rotated seams — so that they’re not cut under the arm — and undershirts are cut long and run thinner, so that they stay tucked in your pants and don’t bunch up under your clothes.
On the customer service side, Mack Weldon has a few things going for it that differentiate it’s buying experience from other brands. While its shirts and underwear might be a tad more expensive than your run-of-the-mill underthings — though maybe not from a designer perspective — the brand gives discounts for bulk purchasing. Users get 15 percent off when they spend $100, 20 percent off when they spend $150, and 25 percent off when they spend $200 or more.
It also has an auto-replenish feature that will let users sign up to have more product automatically sent when they need it. But it’s not about tricking users into signing up for a subscription service for a product they don’t know they like yet — it’s about getting people who like the product to decide they want more of it. “Our philosophy around auto-replenishment is that we want to make things easier for guys,” Berger told me. “We want to earn customer loyalty.”
So I’ve tried out some of its products and have to say that from a quality perspective, I really like what Mack Weldon has done. Shirts and underwear are extra-comfortable, although I personally found sizing in shirts to run slightly big (it suggests you go up a size if you’re unsure). The good news is that after running through the laundry, shirts and underwear didn’t shrink much, although it’s too early for me to tell how they’ll hold up over time. The other good news — if you’re not satisfied or something doesn’t fit, Mack Weldon will issue a full refund for clothes returned within 30 days.
Same-day shipping has been reported as a key part of Amazon.com’s current strategy, but CFO Tom Szkutak offered a sort-of denial of those rumors during today’s conference call discussing the company’s second quarter earnings.
“We don’t really see a way to do same-day delivery on a broad scale economically,” Szkutak said.
He did note that Amazon is aggressively opening new fulfillment centers with the goal of reducing shipping times, saying, “We’ll continue to work on behalf of customers to serve them even better.” But he repeated that it’s not feasible to do same-day shipping “on a broad scale.”
Now, that doesn’t mean Amazon won’t do more same-day shipping in the future, just that if it did, the availability would be limited. Nor does Szkutak’s statement clash entirely with the story earlier this month in the Financial Times (the link requires FT registration), which claimed that Amazon has shifted its focus from avoiding sales taxes (effectively giving shoppers a lower price) to an emphasis on speed so that it can “offer same-day delivery to more consumers.” Szkutak’s comments do suggest that focusing primarily on the same-day aspect of Amazon’s plans, which is how several bloggers responded to the FT story, may be a little misguided.
Speaking of taxes, Szkutak downplayed the effect that sales taxes would have on Amazon’s bottom line. He said the company favors a nationwide policy rather than state-by-state taxes, and that’s what it’s lobbying for. But in the meantime, he says Amazon is already paying sales tax or value-added tax in a number of geographies, and when it does, it sets prices without taking the tax into account. Yet Szkutak says “customers are coming to us because we have value irrespective” of whether or not they have to pay sales tax.
Two years ago, WhiteyBoard founders Saachi Cywinski, Sherwin Kim and Jason Wilk set out to re-think those clunky, inflexible whiteboards found in classrooms and offices around the country. They developed a portable, flexible alternative: An inexpensive, “instant” plastic board that weighs less than two pounds and adheres to any surface without screws.
The idea, and the fact that co-founder Jason Wilk was (at the time) hard at work on a Y Combinator backed startup, quickly attracted $500K in seed funding from serial entrepreneur and founder of popular European professional network Xing.com, Bill Liao. The startup used the funding not only to to continue developing their whiteboards, but to develop a new product, called WhiteyPaint, which they launched late last year.
Wilk tells us that WhiteyPaint has since found an eager audience, leading to the fortunate problem of demand quickly outpacing supply. Struggling to finance demand on a bootstrapped budget, the founders reached out to Dallas Mavericks owner, Shark Tank investor, and HDNet Co-founder Mark Cuban. Seeing a billion-dollar market dominated by a few bloated players, Wilk said, Cuban believed WhiteyBoard was onto something.
So, today, the startup is officially announcing that it has raised an undisclosed round of seed financing from the billionaire entrepreneur. Wilk tells us that WhiteyBoard has already sold to over 10K businesses, and smaller versions of the product are currently in stores at retailers like Urban Outfitters and ThinkGeek as well as at fulfillment centers around the world. (What’s more, its products are now made exclusively in the U.S. of A.)
Since last November, he says, sales for both its whiteboard and paint have quadrupled, and with the new funding from Cuban, the team is this week launching version 2 of its WhiteyBoard paint, which the founders say not only has better performance and more durability, but is “the best dry-erase product the world has ever seen.
That remains to be seen, but it certainly helps in the validation department to have Cuban on your side. For now, WhitePaint is for sale on the startup’s website here.
Kiva Systems’ interconnected hardware and software package is designed to streamline the process of picking, packing and shipping e-commerce products for delivery. The company uses hundreds of autonomous mobile robots and a sophisticated control software, to provide a fulfillment system for retailers.
Utilizing this system, robots scurry about the floor locating individual items before transporting them to workers who pack and ship. As founder Mick Mountz told us recently, Kiva accounts for “two-to-four times as many orders per hour as they have done the old way”. The company has been growing at over 100% a year. And the average price per system? $5 million.
“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Amazon’s VP of global customer fulfillment Dave Clark in a release. “Kiva shares our passion for invention, and we look forward to supporting their continued growth.”
So, it looks like Amazon will be adding Kiva’s Robot coordinated system to its own fulfillment operations. Amazon has its own booming fulfillment operations, which the company and third-party merchants utilize to store inventory and fulfill orders. Amazon has been ramping up the development of its fulfillment centers over the past year, opening 15 new centers in 2011 worldwide. As of last July, Amazon had roughly 65 centers worldwide. And this year, the company opened new centers in India and South Carolina and has plans for a massive center in Delaware.
Kiva Systems is backed by Bain Capital Ventures.
SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ:AMZN) today announced that it has reached an agreement to acquire Kiva Systems, Inc., a leading innovator of material handling technology.
“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” said Dave Clark, vice president, global customer fulfillment, Amazon.com. “Kiva shares our passion for invention, and we look forward to supporting their continued growth.”
“For the past ten years, the Kiva team has been focused on creating innovative material handling technologies,” said Mick Mountz, CEO and founder of Kiva Systems. “I’m delighted that Amazon is supporting our growth so that we can provide even more valuable solutions in the coming years.”
Following the acquisition, Kiva Systems’ headquarters will remain in North Reading, Massachusetts.
Under the terms of the agreement, which has been approved by Kiva’s stockholders, Amazon will acquire all of the outstanding shares of Kiva for approximately $775 million in cash, as adjusted for the assumption of options and other items. Subject to various closing conditions, the acquisition is expected to close in the second quarter of 2012.
Amazon is opening a 1 million-square-foot fulfillment center in Middletown, Delaware, which is the e-commerce giant’s second facility in the state. Amazon says that the new center will create 850 full-time jobs, and will cost $90 million.
Amazon’s fulfillment centers enables the company and third-party merchants to store inventory and fulfill orders. The Middletown center joins Amazon’s New Castle fulfillment facility, which was opened in 1997. Amazon says that the New Castle center currently employs “hundreds of full-time workers,” but it sounds like the new facility will be larger. The Middletown facility is expected to be complete this fall.
In December, the Delaware Economic Development Office awarded the company $3.47 million from the Delaware Strategic Fund to support the expansion, of which $2.12 million will help create new jobs at the site. The fund will also contribute to the company’s infrastructure investment, equal to 3 percent of the total capital expenditures, or a maximum of $1.35 million. A separate grant for up to $4 million from the Delaware New Jobs Infrastructure Fund will be used to build extensions of public roads to serve the project, improve traffic flow and provide access to additional properties for future economic development. Amazon will also benefit from a real estate tax abatement from the town of Middletown for the next 10 years.
Amazon has been ramping up the development of its fulfillment centers over the past year. In 2011, the e-commerce company opened 15 new centers worldwide. As of last July, Amazon had roughly 65 centers worldwide. And this year, the company opened a new center in India and in South Carolina.
Investors seem pretty disappointed with Amazon’s fourth quarter results (as of 3pm Pacific, the company’s stock is down 8.6 percent in after-hours training), yet for most of this afternoon’s analyst conference call, that disappointment was largely hidden in the normal stream of numbers and financial terminology. Finally, a few minutes before the call ended, one analyst asked CFO Tom Szkutak to directly address the concern that earlier questions had hinted at — namely, that the company seems to be seeing “diminishing return” on its spending.
Szutak’s initial response? “I’m not sure how to answer that.” Yes, he said Amazon is investing heavily (for example, he said Amazon had opened 17 fulfillment centers during the quarter, bringing the total to 69), but that’s because the company is seeing so much growth — in its own retail business, in fulfillment for third-party retailers, in Amazon Web Services, and so on. As evidence, he pointed to Amazon’s 46 percent growth in overall unit sales. (He talked in more detail about media sales earlier in the call.)
At the same time, he acknowledged that there have been some challenges this quarter, including the economic crisis in Europe and supply issues caused by flooding in Thailand.
“We’re incredibly excited about the opportunity that we have and that’s why we have invested as we have and why we’re continuing to invest,” Szutak said. Asked if Amazon will be changing its strategy at all, he said, “We’re continuing to look as we always do. We learn every week and every month and every quarter.”
Flashpoint, a startup accelerator program based at Georgia Tech in Atlanta, Georgia, just had its first Demo Day at the Georgia Tech Research Institute. The newly launched incubator follows the typical format for programs like this, offering seed funding, mentorship, support, shared workspace and more, in return for a 6% share of the startup.
This accelerator is especially interested in investing in early stage startups in the technology, medical device and biotech industries. With its $1 million fund, the organization typically provides between $15,000 and $25,000 in funding to the companies accepted into the program. The first Demo Day saw over a dozen in the graduating class, including one which already received funding from Andreessen Horowitz pre-launch.
The complete list of new companies presenting today includes the following:
- Badgy: provides a Social SEO platform for digital marketers and consumer brands that increases the ROI of social media marketing.
- Billfold: Billing system for web hosts. Its SaaS offering combines drastically improved security, extensive automation, and a powerful user interface to save customers time, money and stress.
- BISmark: Provides business intelligence software for home routers.
- CodeGuard: A Time Machine for websites that backs them up to the cloud, and lets users roll back to previous versions.
- CollectorDash: Delivers integrated community marketplace and commerce platform.
- eCommHub: Web-based fulfillment platform for online stores that don’t keep their own inventory, but rely on third-party vendors, distributors, suppliers, or fulfillment centers.
- IdeaString: Offers social business software to increase the speed and reduce the cost of innovation and business optimization by transforming the expertise, passion and knowledge of internal and external networks into actionable opportunities.
- Lucena Research: Provides hedge fund technology to retail investors. Its web-based decision support software enables traders to find market opportunities and reduce risk in their portfolios.
- N4MD: Provides a content aggregation publishing platform that empowers corporate communicators to “automagically” blend local news, social media and corporate content into e-books and Flipboard-like e-magazines for niche audiences within their organization.
- Pindrop Security has developed technology that hopes to stem the growing problem of phone fraud. Its patent-pending solution identifies key attributes of any phone call including the device used, call path and geographic point-of-origin to create a unique “phone fingerprint” that helps banks and financial institutions identify and isolate fraudulent calls and authenticate legitimate user phones. (This company recently received investment from Andreessen Horowitz).
- SavingGrace: A Groupon for church fundraising, the company offers new methods of fund-raising to churches at no cost, by bringing together merchants and congregations for everyday purchases.
- Simmer: Uses technology to help parents and teens ease conflicts at home.
- Social Fortress: Enables enterprises with sensitive data to leverage the cloud by eliminating traditional cloud security risks.
- Soket: A SaaS-based, customer engagement platform for local businesses that struggle to manage customer relationships online. Soket’s command center provides a single content management system to orchestrate their entire online presence – from various social networks to their own websites..
- SportsCrunch: (No association with TechCrunch!) Gives athletes and coaches control of their online presence.
- Trimensional: Brings 3D scanning technology to smartphones, giving consumers the easiest, fastest, and most affordable way to create 3D models of their faces and other objects. Trimensional has already been the iPhone’s #1 paid photography app in 25 countries.
Online retail giant Amazon this morning announced that it will open four new distribution centers, two in Virginia and two in Tennessee, and that it will invest a total of $270 million to get the new facilities completed by next fall – just in time for next year’s holiday season.
In Virginia, Amazon says it will create about 1,350 jobs, while the new distribution centers in Tennessee will create 1,300 jobs. Amazon operates such facilities, which it calls fulfillment centers, to warehouse and shop items customers have ordered on Amazon.com.
The new sites will be able to fullfil orders across the United States, the company said.
Together with the Governor of Virginia, Bob McDonnell, Amazon announced that it will invest $85 million in Chesterfield County, and invest another $50 million in Dinwiddie County.
Governor McDonnell approved a total of $3.5 million in grants from the ‘Governor’s Opportunity Fund’ to assist Chesterfield County and Dinwiddie County with the project.
In conjunction with the Governor of Tennessee, Bill Haslam, the company announced that it will invest $135 million in two new fulfillment centers to complement exisiting facilities in Wilson, Hamilton and Bradley Counties.
In total, Amazon says, the company will be creating more than 3,300 jobs and more than $270 million in investment in Tennessee.