Meet the Amazon of northern Michigan: EFulfillment expanding to Las Vegas, Tampa
When eFulfillment Service opened its doors in Grawn in 2001, the e-commerce industry was in its early days. The industry has since grown by leaps and bounds, and the same is true of eFulfillment, which moved to a larger facility in Traverse City less than a decade after its founding
Now another expansion is on deck. The company is eyeing facilities in Las Vegas and Tampa, and has brought on a new director of expansion to oversee the projects: Jason Lindberg, founder John Lindberg’s second son to join the business.
“We’re maxing out our space, in spite of how large it is,” said Jason of the company’s 200,000 square-foot facility on Airport Access Road. Brother Jordan Lindberg is the company’s executive vice president.
Jason’s job is big and complex, said John. “Jason is putting together the team that will design the biggest, most complex and most important transformation our company has undertaken since its inception,” he said.
Jason previously worked at McMaster-Carr Supply Company in Chicago, an industrial supplies and hardware fulfillment business.
Jason said that experience helped him get a leg up when joining the family business. “I spent about a decade in Chicago in industrial fulfillment. Here we don’t own [the products], but it’s been a good fit,” he said.
Jason said the company is looking at two developments to help it maintain its place in the e-commerce fulfillment industry. In addition to acquiring two additional locations, he is heading efforts to maximize its current space.
“We’re doing two things simultaneously: new warehouse management software and expansion to Las Vegas and Tampa,” he said.
The former is what Jason calls “a 21st Century platform recognizing multiple sites.”
The company is currently working on integration, on schedule for late 2019 deployment. Jason added that the company will spend the first few months testing it before it becomes fully operational in the first quarter of next year.
Its current web-based system allows e-commerce professionals to manage their business from anywhere, including viewing inventory, sending orders and checking shipment status. The new system will provide even more benefits for all concerned, Jason said.
“The new software has many reporting tools. We can do velocity analysis, see which SKUs are going to where,” he said. It will also recognize multiple sites.
Another issue besides the lack of space that is driving the expansion into other locations is shipping, both inbound and outbound. Having facilities close to transportation hubs will make it easier while decreasing costs.
“We wanted places close to airports, rail, seaports,” Jason said. That hearkens back to his previous experience.
From its location in Chicago, McMaster-Carr was able to deliver products to its customers in one or two days without incurring additional shipping costs. In Traverse City, that doesn’t happen.
Jordan said that immediacy is a key, as consumers have become used to seeing a product they want, clicking on a screen and having it in their hands just a couple days later. “Amazon sets expectations,” he said.
Of course, with 75 fulfillment centers scattered across the continent, it’s much easier for the giant retailer to service its Amazon Prime customers with two-day service than it is for eFulfillment. From Traverse City, delivering in two days means spending money – a lot of money.
“We live in a very large country,” Jordan said. “Our customers are telling us we have to move like Amazon. So to get packages in hubs in two days, you’ve got to pay to do that.”
While creating two more fulfillment centers will be expensive, those costs will be offset by the reduction in shipping costs. Jason said the velocity analysis is key, as it will help the company determine where to best house the products it is shipping by seeing where the majority of them are being shipped. By storing those products in the facility nearest where the majority of them are being sent, the company will save money on transportation, both into and out of its fulfillment centers.
For example, if eFulfillment determines product X is being purchased primarily by persons on the West Coast, it will be cheaper to store them all in Las Vegas.
It isn’t just the delivery to customers that’s pushing eFulfillment to look at Tampa and Las Vegas. Logistics work on the inbound side as well, said John.
“Logistics is also inbound. Our products are coming in from ports – New Jersey, Miami, Los Angeles, Long Beach,” said Jordan. “We have to be in California or near it. California is hard … [because of] taxes and regulations.”
While Amazon may drive the business, in large part it also makes it. So eFulfillment sees the mega-retailer as a partner as well as a competitor.
“Most of our clients are or want to sell on Amazon. So we prep pallets to go Amazon centers. We use Amazon web services,” Jordan said.
The company is planning to tour potential facilities in November. “The goal is to have at least one operational by the end of 2020, and both by the end of 2021,” said Jason.
While excited about expansion, there is no plan to abandon Traverse City. Jason only moved here a few months ago and is excited to be back in his hometown. “We’re happy to be out of Chicago. I was born and raised here,” he said.
Like many, he left Traverse City for school and work. “A lot of us flee. Now to be able to come back … my wife and I recently had our first child and thought, ‘Where do we want him to grow up?’ It’s a great fit.”
And it’s a fit that’s working for the family.
Jordan Lindberg said his brother’s experience at McMaster-Carr is providing benefits at eFulfillment. “He has a perspective I don’t have. He worked in logistics. I came from a corporate, business environment,” Jordan said.
He also noted that his brother had been involved in a business with bigger budgets and a bigger environment in Chicago. “So that’s been a great asset to us,” Jordan said.
Jordan said bringing in Jason made sense in a number of other ways. “There’s a 20-year gap between us. He’s in his 30s and I’m in my 50s. He’s younger; more fluid with technology,” Jordan said. “He’s got fresh eyes.”