In this video, Rachel Go chats with Steven J. Edelstein, Vice President, Strategy and Partnerships, at Fulfillment IQ. Rachel and Steve talk about his background, where merchants and 3PLs need more alignment, keys to smooth eCommerce logistics, and his predictions for the future of 3PLs.
Rachel Andrea Go: Can you share a little bit more about your background and how it led to where you are today?
Steven Edelstein: Sure, sure. It’s interesting, my history. As you can see to some extent in the answer I gave you, I’m quite an anomaly in this business. And the reason I say that is because I spent quite a bit of time on the merger acquisition and leveraged-buyouts side in private equity, which gave me my, I guess, entrèe into health and beauty and logistics as a general rule. Subsequent to that, [I] started acquiring, building, and selling very niche, very scientifically formulated skin care companies. So, I’ve done seven indirectly and directly over the last 20-plus years (knock on whatever).
They have been very successful but, again, because they were so dedicated to the science and knowing exactly who the demographic market is and was and needed to be, it had a very good opportunity for success because of that go-to-market strategy. With that said, everything I did as a CEO, president, [and] owner — interestingly enough, although I spent some time on the marketing strategy side of the business, most of my interest and attention was paid to the back-end logistics because, the way I saw things, I had very smart people handling the packaging, the messaging, the content, the story, the formulation — all of the above.
But in considering that and doing all that right, you must be able to execute on the back end. So, I learned everything I needed to learn about technology, about operations, but more importantly, process and procedures and methodologies and steps and things that you need to take in order to be hopefully, reasonably proficient at what you’re doing. Everybody makes mistakes, everybody has issues. But (and I mean this sincerely) the most important thing you can do in any business segment (and I’ve said this several times throughout the document) is listen, communicate, say what you know, and be true to yourself. And so, coming full circle, the irony is, you’re coming out of the brands, working with a number of notable 3PLs over the years, being involved with brand business obviously, being involved with different types of consulting opportunities — this particular situation was presented to me or vice versa (I think it was a collaborative) and it made perfect sense for me to be part of the commercial team and running strategy and partnerships for this company because it is my personality.
Rachel Andrea Go: So, you found Fulfillment IQ through a partnership of one of your own companies?
Steven Edelstein: I did not, actually. Fulfillment IQ was unearthed to me because of my relationship with Dan Cole. Dan and I have known each other for many years; we tend to laugh and say we’ve run parallel lives. When he got involved with Fulfillment IQ, I was interested because, interestingly enough, I was in the process of starting another company with a very similar business model called the Logic Train.
Rachel Andrea Go: I love it.
Steven Edelstein: So, when I put two and two together and I realized that Logic Train was not going to be leaving the station, okay, and with no passengers, I said, “Let me explore the Fulfillment IQ angle,” and, as it turns out, it was a good fit. It’s become a better fit as time’s gone on. I’ve been here a little less than two years and hopefully contributing to the success of the company.
Rachel Andrea Go: Amazing. Well, from your background, I’ve seen that you’ve seen our industry — so, eCommerce — from both the brand side and the logistics side. What are a few places that you’ve noticed that brands merchants, you know, and 3pls need more alignment or should have more alignment.
Steven Edelstein: I think, first of all, as I pointed out, cultural assimilation has been critical, and there are people that will disagree with me. But I do believe in subject matter orientation. I do believe that, if you’re going to survive long term in the logistics of Industry, you need to learn how to coexist with your brands. You need to understand what they do on a day-to-day basis. You need to understand their internal workings, both from a marketing but more so from a technology and operations perspective, really aligning yourself in such a way that you don’t create a lot of obstacles.
Okay, secondarily, as I said, not only cultural assimilation but also terminology. You have to have basically a somewhat of an understanding—you don’t have to be an expert but somewhat of an understanding of the words, of the language, of the terminology, of the phraseology of what these people go through on a day-to-day basis because it just makes it easier to have that communication with your provider. If they understand what you do — let’s say 90% — and you understand their day-to-day issues, both pro and con, and you understand technologically what they have in place and can work with that in terms of not only data integration but pure transactional flow, and operationally you align philosophically and otherwise, then you have a good relationship.
I will tell you that the biggest problem that I’ve seen unilaterally with most of the 3PLs, logistics companies, supply chain companies, distribution companies, etc., fulfillment companies all under the same—they do all the same thing — is that they don’t make an effort to get an understanding of what that client goes through. They don’t make an effort to understand the industry in which they live and breathe. And they’re, in some cases, quite arrogant about it. In simple language, if you don’t fit into (and no pun intended) the box that we have, then quite honestly, we don’t want to work with you, which I will tell you more later. But the short answer is also that, as we move into ‘24, ‘25, and ‘26, as I said (and we’ll talk about this a little more as you get that question), they better be careful, because the industry is consolidating.
There are going to be less and less companies out there that are servicing that need. So, if you take a subject matter orientation and you take that niche approach and you understand the ICPs, the clients that you’re working with, and you have an appreciation for their day-to-day and, generally, their philosophical view on business, trust me, not only will you do very well financially otherwise, but you will also have a relationship for a very long time.
Rachel Andrea Go: So, it sounds like the companies that will last through this consolidation are the ones that will actually put in the time to get to know each individual client and so does that mean having a wider kind of menu of services doesn’t mean customizing down to a tee? What does that look like?
Steven Edelstein: I think that’s—first of all, yes, you’re correct. Having an understanding of the client business, their brand, their intention, their go-to-market strategy, all the things that are critical to their lifeline, but I think even more important is, you know, as we have this supposed consolidation — and by the way, it’s gonna happen over the next few years; it’s not gonna be a 12-month event. It’ll be 24, 36, maybe 48 months. But my point is that it’s also a matter of taking a look at your infrastructure. Take a look at your technology. What does your order management system look like? What does your warehouse platform look like? Are you functionally aligned with the clients that you serve each and every day. So, a lot of that “shoring up,” if you will, is more about making sure that you are secure and protected for some of the ups and downs that are going to potentially occur as the consolidation unfolds and make sure that everything that you have in place from an academic perspective is fluid.
Rachel Andrea Go: Perfect, thank you. And I think that’s a good transition into Fulfillment IQ, because I think they’re, you know, a really good partner and solution for all of this. So, can you tell me a little bit more about Fulfillment IQ? And what’s your main focus there?
Steven Edelstein: Sure. As I pointed out in my document, we segment but also integrate. They’re all integrated practices. Commercial starts with a good level of analytics. Deciphering, understanding, listening, communicating what the problem might be. We are practitioners. We provide solutions. We are not typical consultants.
And I mean that sincerely. We are actionable in what we provide and we handle the work that needs to be done. So, when we provide a solution, we don’t stop at the solution and say, “Okay client A, it’s time for you to do the work.” We roll up our sleeves. We build the resources. We handle the program.
So, commercial is one aspect. And, again, commercial is everything from business development from a design perspective; it is looking at business modeling; it is looking at research analytics; it is looking at deciphering different types of processes and procedural issues. But it also involves looking at your operations infrastructure, your technology infrastructure, and also, in many cases, your go-to-market strategy. So it’s very consultative but very collaborative in terms of how we work with our client partners.
Second to that but also equal, as I pointed out: product development, software development, middleware development, algorithms, applications — simply put, everything rolled up into technology. But product dev can be done as a licensed product, it can be done as a standalone custom developed product, it could also be done as an augmentation to existing products. We do a lot of WMS developments, both augmentation as well as design and builds, and it is comprehensive — everything from tier one products, whether it be I can say names like Manhattan, Corber, Blue Yonder, etc., to tier two’s like the Deposco, Eulogia, Osa Commerce, or Snap Fulfill, or any of the notables out there, and some you’ve never heard of.
But our responsibility is not only to know who these companies are but, because we handle the lion’s share of integrations on behalf of these clients, surprise, surprise, we have to know how they work.
So, a lot of that is in product, a lot of that is in software, and much of what we do, again, is wrapped with a lot of operations advice, a lot of operations influence, a lot of technology advice and influence. But in some cases, on the private equity side of things, we do get involved with some investments — smaller, specific, very strategic investments. And that practice is ever growing. So, FIQ in a nutshell, is a commercially developed company that is an inch-wide, mile-deep supply chain consultancy.
Rachel Andrea Go: I love the execution aspect because, for busy founders, busy companies, that is really the deal maker, I think.
Steven Edelstein: I, selfishly, Rach, I mean, it really is, I mean, for us. And it also puts us into a very unique position primarily because we can see things through to the final actual execution, which is a nice place to be.
Rachel Andrea Go: Yes, absolutely. There are a lot of consultancies where they will tell you what to do and then it’ll never get done and then the company or the client has ended up, you know, wasting their money a little bit for something that they don’t have the resources or time or, you know, manpower to execute on, basically.
Steven Edelstein: Spot on. You hit the nail on the head. The expense is always that albatross that is looming and, if the company can’t realize some kind of return on investment (and that was something also that you might have noted in the document), large focus on ROI, large focus on measurability, large focus on accountability — really important. And it is a mantra, it is a mantra for this company to make sure that, when we do X, we realize X plus something. And that’s a requirement and that is a philosophical approach, honestly, that we have with our clients as well, not just for our own needs but for our clients. To make sure that when they do something, when we do something with them, that there is that return on investment that is part of that process.
Rachel Andrea Go: Got it, and when you mentioned clients, so, this kind of leads to my next question, but your role is focused on both strategy and partnerships…
Steven Edelstein: Correct.
Rachel Andrea Go: So, can you go into a little bit about how do partnerships play into Fulfillment IQ’s overall, like, growth acquisition and strategy?
Steven Edelstein: As I pointed out, they’re very strategic. We do not have tiers, as I also pointed out. We don’t have levels like platinum, gold, silver, and bronze. We’re not vying to be in the Olympics, kids, we’re a supply chain company and we’re helping brands understand and generate solutions to their problems. Okay. So, with that said, everyone is equal. Everyone is equal. We don’t segment it even in the industry segments. So, for instance, our partners don’t get segmented into operations versus technology versus finance versus this. This is not the case.
And, as I said earlier, it started very selective and the reason why we’re selective vice versa is that we want to make sure that there’s revenue generated through that relationship. We don’t want to be that company that reaches out to three, four, five, six, seven, 10 different companies on behalf of a specific opportunity and have them all competing against each other and creating dissension and, most importantly, good, bad, or indifferent, creating a stigma that tells them that it’s just a fishing expedition. So, rather than do that, we have a very selective process that we go through to make sure that, if we have a partner or two or three in place, not only are they gonna achieve results but they’re gonna make money along the way. Because ultimately, at the end of the day, I don’t care what anybody says: Life, business, unfortunately, is about revenue. And therefore, at least make the revenue achievable is what I’m saying.
So, partners are very important to our ecosystem. Partners are very important to the organic growth of our opportunities, and I’m very blunt: This business, for all better purposes, is about three things: timing, trust, and relationship.
It’s not a commodity business nor should it be. Sometimes it is, unfortunately, but it shouldn’t be. It should be about value, it should be about solutionizing, and it should be about the relationship that you developed, which creates reciprocal trust and mutual respect. And I know those sound like very lofty words and very esoteric, very emotional, but the simple truth is, when all things are equal, that’s why a client chooses FIQ for instance — because of the personality, because of the relationship, and because we are people that understand that they are people that need some support.
Rachel Andrea Go: Having spoken about all of your experience with—between 3PLs and seeing different sizes every partnership, what are some of the steps of the supply chain that you’ve seen most either brands or 3PLs or both make mistakes?
Steven Edelstein: First and foremost, the project plan is the Holy Bible as far as I’m concerned and I say that very, very agnostically in terms of, you know, that religious implication. But seriously, the project plan is that Bible. It is the Taskmaster, it is the operational and organizational chart that holds accountable for everything. I can tell you, unfortunately, most companies don’t—either they start out with a project plan and they don’t continue to use it, or they don’t have one at all. And I think it’s a big mistake, because, in my opinion, in our opinion and the industry’s opinion, this world is a collaborative environment. Nobody has all the answers, but we’re gonna try as hard as we can to find those answers.
So, we’ve got a good project plan that illustrates start and end dates, accountability, milestones, benchmark reviews — all the things that are critical to the process. Very important but, like I said, coming full circle, very underutilized, if it exists at all. That’s A. B: Listen, communicate, talk to each other. Don’t hide behind your email.
I love Slack, I love texting, I love emails, but when I need to get something done, call them. Pick up the phone, talk. Maybe it’s old school, maybe not, but in today’s inconsistent communication world, [it’s] better to speak direct than try to interpret something that can’t be interpreted.
The other is, the last thing I’m gonna say, is know what you know and know what you don’t know. You have a problem? It’s almost like a 12-step situation. First thing to do, you have to admit you have a problem. Once you admit you have a problem, you go through a process and you go through a step-by-step methodology to get to the end result. But you’re always going to be better off knowing that you’ve admitted—acknowledged that you have an issue rather than trying to work around it because, at the end of the day, the problem is still going to be there, okay?
So, those are some of the problems, some of the pros that people are paying attention to their technology to some extent. People are—companies are starting to pay more attention to their operational processes and their procedures. They’re getting better, they’re getting better.
Remember, this industry has been around for a long time and it hasn’t changed; it’s still stuck in 1972, okay? And I’m gonna tell you what I tell my colleague friends all the time: There is not one warehouse in this country that is any different than the other. They are populated by the same people, they have the same racks. Some have better technology, some have worse; some have better operations processes, some have worse. But, at the end of the day, the personalities within that warehouse are all the same, and I can take one person from Hebron, Kentucky and put them into a facility in Ontario, California in the same job and within five minutes, they’ll be up to speed doing what they’re doing and probably complaining about the same things that they complained about in Hebron, Kentucky.
So, my point is: Pay attention to your brand. And I’m not talking about the brand itself, I’m talking about the supply chain, about the logistics company. Pay attention to who you are, what your personality is, philosophically what you represent, and, for God sakes, stay in your lane.
Rachel Andrea Go: You mentioned kind of like a project plan earlier, like it’s really important to have a project plan in place.
Steven Edelstein: Correct.
Rachel Andrea Go: Is each one variably different, or do they all take roughly the same three or four meetings to put together? Can you tell me a little bit more about the process of getting those project plans together?
Steven Edelstein: Sure. Project plans are unique to each engagement, and they should be because every task for each engagement is different. So, therefore, we have, obviously, as a corporation, as a company that does this, obviously, on a repeated basis, we have a very good template to work from in terms of format. But, in terms of content, content is crafted, drafted for each individual project plan and, as far as timing is concerned, typically takes no more than three to five days to complete.
Rachel Andrea Go: So, essentially, it’s just a few days for the health of your entire project.
Steven Edelstein: Indeed, because most of the legwork, most of the data gathering that we’ve achieved has done well in advance of the project plan being drafted. So, it’s really more about—I’m simplifying, but it’s more about execution at that point, seriously.
Steven Edelstein: So, it’s very, you know—once we have all the information in place, we know what the steps are, and we’ve had many conversations prior, again, that project plan, in terms of development, is pretty straightforward.
Rachel Andrea Go: So, the project plan is one, but can you suggest three other very important things that brands and merchants need to get right when it comes to their logistics?
Steven Edelstein: First and foremost, make sure, above and beyond again, what we just discussed in terms of project plan. Let’s talk about tech for a minute.
The technology, the functionality of their technology, for all practical purposes, should align with the types of clients that they’re working with. Different SKUs, different bundles, different kitting are going to require different levels of functionality.
You also have to take a look at your complete technology ecosystem. What does that look like? If you centralize your warehouse management platform, is their middleware that’s involved? Is there an order management component? Is there a transportation management system? Are there applications that coexist with the system? And, most importantly, make sure again that the functional behavior is consistent with the types of clients you’re working with because, ultimately, it’s going to affect not only the operational fortitude but also the reporting aspect and the analytics of your business, which, in my opinion, is probably more critical and more important than any other aspect of the business. So, tech is one part.
Kind of parallel is having that communications process in place in terms of meetings, milestone meetings, QBR’s, that kind of cadence, but also having the operational processes that coexist with the communication that takes place. So, in simple language, having that ability to have insight to the steps and the activity — better word — of what’s going on operationally and being able to have easy access to information, which will be communicated to the end user.
Rachel Andrea Go: So, my next one is about last year. What are some of the things that happened last year that you’re really excited about or that will, you know, basically impact us far into the future?
Steven Edelstein: Well, you’re asking a question that is pretty easy to answer for Fulfillment IQ, because the way we look at things, the more the supply chain is broken, the better off it is for us. So, with that premise in place, what I’m excited to see in the future is A) the understanding that companies are going to get much more focused on who they are and what they do and how they do it, and, most importantly, be respectful of their approach to the market.
Clients are getting much more intelligent about how they operate their businesses from a back-end, logistical perspective. They’re much more in tune with how to operate the business, logistically versus from a go-to-market strategy perspective. I think that, because of the supposed consolidation that is going to take place, I think most companies, both brands, retailers, fulfillment groups, 3PLs, whatever you want to call them, are all going to have to prepare for the long term and make sure that they are structurally set up to have incremental not only growth but incremental functionality as the market continues to change.
Rachel Andrea Go: Thank you. And my last question, just to wrap up, kind of, the consolidation that we’ve just been talking about this whole call: Would you advise brands need to go for one of the big guys when it comes to fulfillment? So, like, if I was a brand, do I need to go with someone who will for sure be there and not be acquired in the next three or four years?
Steven Edelstein: I mean, you make a very good point, and it’s an excellent question. Not to dilute the question, but I think it really is a case by case situation. I think there are some smaller entities that, again, have an understanding of the environment in which they live and breathe as well as the clients live and breathe and can coexist very nicely without having the size and long—legacy and longevity that they might have. So, I think that’s a good thing. I think that you need to be aware of who they are as a business, who supports them financially. Are they independent owners and operators? Are they private equity venture capital supported? Are they institutionally supported?
You need to understand that structure, that’s important. And does that align with your business? Structurally, from a corporate perspective, and administratively. So, I think you need to take a look at that. But, again, it’s a case-by-case situation, but generally speaking, size has nothing to do with anything, it really doesn’t, doesn’t have anything to do—it has more to do with ability, understanding of the market, experience with products and businesses that are similar, and can they speak the language correctly?